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On our internal control information disclosure of the development of the specification and its recommendations

Author: FangXiangDong From: www.yourpaper.net Posted: 2009-08-13 00:11:02 Read:
Paper Keywords: listed companies; internal control; specification
Abstract: internal control disclosure of information related to the interests of all parties have a very important significance. For the majority of investors, they tend to understand their business through access to financial statements of listed companies, and the excellent results of operations, financial reporting is reliable or not, to a large extent by the internal control. Sound internal control information disclosure for listed companies can not only improve the operational efficiency of enterprises, improve the operation and management of enterprises, but also to send a signal to the market: the management of the company's internal control is very important, and can ensure that its internal control effectiveness.


At present, China's economy is in a stage of rapid development, the rapidly changing capital market, therefore, is particularly important to strengthen the disclosure of internal control information. Accordance with the COSO report, internal control is implemented by the corporate board of directors, the managerial and other employees, to provide reasonable assurance that the process for the achievement of the goals of the efficiency and effectiveness of operations, reliability of financial reporting, the relevant Act compliance.

, Our internal control information disclosure norms

Promulgated by the Chinese Institute of Certified Public Accountants Association in 1996, "Independent Auditing Standards No. 9 - internal control and audit risk" first put forward the concept of internal control, specified internal control refers to the audited entity in order to ensure the efficient conduct of the business activities, protection the safety and integrity of the assets, prevent, and found, to correct errors and fraud to ensure that accounting information is true, legitimate and complete formulation and implementation of policies and procedures, internal control, including control environment, accounting system and control procedures. However, the internal control within the definition of small internal accounting controls and certified public accountant, just standing financial statement audit point of view. Since then, the definition of internal control has been in constant development and revision process.
Of the earliest involving the internal control information disclosure norms the main scattered Securities Regulatory Commission issued the public offering of securities of companies disclosed the content and format guidelines and specific requirements embodied in the prospectus, additional application materials and annual reports. : (1) issued by the end of 2000 by the China Securities Regulatory Commission, "the Public Offering of Securities Company Information Disclosure Rule No. 7, No. 8, to require commercial banks and securities issued by the Company in its annual report the effectiveness of internal control integrity and rationality of the self-assessment report, commissioned by the accounting firm hired its internal control system, risk management system integrity, rationality and effectiveness evaluation, suggestions for improvement, and issue an evaluation report . (2) issued in March 2001 by the China Securities Regulatory Commission, the public offering of securities of the company information disclosure content and format guidelines - prospectus provisions of the issuer should disclose the company's management of the integrity of the internal control system, the rationality and the effectiveness of self-assessments. Certified public accountant pointed out that more than "three" major defects, should disclose and explain the improvement measures. Public offering of securities of the company information disclosure content and format guidelines, issued in April 2001, No. 11 - listed companies to issue new shares prospectus, the issuer should disclose the integrity of the management of the internal control system, the rationality and effectiveness sexual self-assessments, Certified Public Accountant's concluding observations on the issuer's internal control evaluation report should disclose. (3) The Commission enacted in 2001, amended in 2004, the public offering of securities of the company information disclosure content and format guidelines No. 2 - Annual Report, the provisions in the annual report of the board of supervisors to deal with "company the legality of the decision-making process, whether to establish a sound internal control system, the company directors, managers and whether the performance of their duties in violation of the laws, regulations, articles of association or harm the interests of the company's behavior "an independent opinion. (4) The Commission released in May 2006 initial public offering and listing management approach ", provides that the issuer's internal control in all material respects, effective internal control attestation issued an unqualified conclusion by certified public accountants Report. " This is the first time that China put forward specific requirements of the internal control of the listed company.
In 2006, to strengthen the internal control of the listed company, to promote the standardized operation and healthy development of listed companies, to protect the legitimate rights and interests of investors, the Shanghai Stock Exchange, the Shenzhen Stock Exchange in June 2006, issued in September, respectively, in July of that year, in July the following year the implementation of the internal control guidelines for listed companies, both Euronext are clearly defined in its Exchange listed company should provide the internal control report self-assessment report. The guidelines were first introduced in China the guidance listed companies to establish a sound internal control system files.

Second, our internal control information disclosure norms flaws and shortcomings

(A) The internal control definition confusion
Whether it is at the same level of the Shanghai Stock Exchange (hereinafter referred to as the Shanghai Stock Exchange) and the Shenzhen Stock Exchange (hereinafter referred to as the Shenzhen Stock Exchange), or at different levels of the SFC and the Stock Exchange, has a different definition of internal control. The Shanghai Stock Exchange from the point of view of the company's long-term strategy to provide internal control in order to ensure the realization of the company's strategic goals and the risk of corporate strategy and operations to be managed institutional arrangements. The Shenzhen Stock Exchange on internal control defined by reference to the COSO Committee of the internal control provisions that internal control is required to meet the following objectives: (1) to comply with national laws, regulations, rules and other relevant provisions of; (2) improve business effectiveness and efficiency; (3) to protect the security of the company's assets; (4) to ensure that company information disclosed is true, accurate, complete and fair. SFC definition of internal control has not been a complete standard, there is no detailed regulations promulgated public offering of securities of the company information disclosure content and format guidelines. Different, largely on the concept of internal control is to not have a complete system of laws and regulations of its formalized, standardized, and current regulations also the lack of convergence between.
(B) the lack of internal control oversight body of unified regulations
SFC does not specify that the supervision of the main body, but simply pointed out that an independent opinion on whether the company establish a sound internal control by the Board of Supervisors. Provisions of the Shenzhen Stock Exchange, by the company's internal audit department is responsible for overseeing the implementation of the internal control system, and the inspection and supervision of the formation of the internal audit report submitted to the Board of Directors and to attend supervisors. And supervise the Shanghai Stock Exchange will be the internal control given the specialized functions, and provides the specialized functions of the department after the end of the annual and semi-annual oversight reports submitted to the Board on the internal control checks. Under this provision, the specialized functions of the department can audit department can also be set by each company based on the characteristics and organizational structure of the Company. By comparison, we can find that different supervisors of each oversight body of reference standards, the implementation of the program and the final conclusions formed are different, this is bound to affect investor comparative analysis of the internal control reports of listed companies.
(C) The provisions of the CPA audit of the same
The SFC control whether to take the CPA audit mandatory only for listed companies in specific industries and special purpose internal mainly in: requiring commercial banks, insurance companies, securities companies should be entrusted to the accounting firm of its internal control system and risk the integrity of the management system, the rationality and effectiveness of evaluation and recommend improvements, and proposed internal control evaluation report. The issuance of new shares of listed companies need to be disclosed in its refinancing application materials certified public accountant on the issuer's internal control evaluation report concluding observations. Annual audit of the company, the Shenzhen Stock Exchange requires all listed on the Main Board of the Company (excluding the SME board listed company) CPA should refer to the provisions of the relevant competent authorities, internal control evaluation opinion issued on the company's financial report. While the Shanghai Stock Exchange does not require the CPA to make the company's financial reporting internal control evaluations, the only reference to the provisions of the relevant competent authorities require accounting firms the verification opinion issued by the self-assessment report on internal control. And in the provisions of the two stock exchanges are not explicitly specified in the CPA should refer to the standards in the audit process, but merely "simple with a" reference to the relevant competent departments. Standards of practice of the registered accountants incomplete internal control audit opinion from the content to the format of the same lack of effective internal control information disclosure quality assurance, so that the information users are at a loss.
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