Research On The Impact Of Internal Control Audit On Earnings Quality

As an information product of an enterprise,earnings information has quality and quantity characteristics.As an important indicator of external disclosure,both internal and external enterprises pay close attention to earnings.Therefore,many managers choose to use earnings management methods to change the earnings status of enterprises,so as to realize their own interests,which also leads to external concerns about the quality of enterprise accounting information,especially financial fraud events such as World Com,Parmalat,Wanfu Shengke,etc.,which shows that listed companies need corresponding regulatory measures to ensure the effectiveness of their accounting information.Therefore,countries have successively promulgated new policies and regulations to regulate the internal control system of listed companies,standardize the process of enterprise information disclosure,and reduce the risk of commercial fraud.The Symbian Act of the United States,the Financial Commodities Trading Act of Japan,and the European Union’s international auditing standards are all relevant acts issued by foreign governments to supervise the internal control system of listed companies,including the establishment and evaluation of the internal control system by the enterprise itself,and the external audit force’s audit opinion on the effectiveness of internal control.In China,the internal control system was gradually built in 2006,and the internal control audit was fully implemented in2014.Therefore,more and more scholars focus on the internal control audit and earnings quality,and the relationship between the two has received more attention.In order to explore the above relationship in depth,this thesis analyzes the direct impact of internal control audit on earnings quality by combing the literature research related to internal control audit and earnings quality.In order to enrich the research results,the adjustment variable of the nature of enterprise ownership is introduced,so as to analyze its adjustment effect on the relationship between the two.Based on the principal-agent theory,stakeholder theory,information asymmetry theory and public pressure theory,this thesis theoretically analyzes the research direction of this thesis,determines four hypotheses of this thesis,defines relevant variables and establishes a research model,obtains corresponding data and relevant information of listed companies from Cathay Pacific Data Bank(CSMAR),and takes the data of Listed Companies in Shanghai and Shenzhen stock exchanges from 2010 to 2020 as the research sample,After the corresponding empirical analysis,the final empirical results show that there is a positive and significant positive relationship between internal control audit and earnings quality.Among state-owned enterprises and private enterprises,private enterprises play a stronger role in regulating the positive impact between internal control audit and earnings quality.Similarly,central state-owned enterprises among state-owned enterprises and non family enterprises among private enterprises play a stronger role in regulating the positive impact between internal control audit and earnings quality.Therefore,according to the conclusions,this thesis puts forward the following recommendations: first,for audit units,it is necessary to ensure audit independence,improve the professional ability and moral level of certified public accountants,and maintain the balance between audit results and audit costs.Secondly,enterprises need to build a scientific internal control system,improve the quality of internal control,optimize the internal governance environment,and ensure the implementation of internal control audit.Finally,the government regulatory department needs to strengthen supervision and reduce government intervention in the market,so as to improve the earnings quality of enterprises.