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The current situation and problems of the listed company's internal control attestation

Author: NiuFu From: www.yourpaper.net Posted: 2010-04-04 18:28:42 Read:
[Abstract] In this paper, the internal control system of the listed companies in China, analysis of the United States and China, the system of internal control attestation background, the analysis focused on the internal the control attestation of the status quo of China's listed companies, points out the problems, and put forward the environment of the current economic crisis How to improve the internal control attestation recommendations.
[Key words] internal control attestation; problems; countermeasures


In recent years, the enterprise internal control is increasingly important, June 28, 2008, the Ministry of Finance, Securities and Futures Commission, the Audit Commission, the China Banking Regulatory Commission, China Insurance Regulatory Commission jointly issued the enterprise internal control basic norms. Listed companies, the implementation of this specification shall be conducted on the effectiveness of the Company's internal control self-assessment, to disclose annual self-evaluation report can hire accounting firms audit the effectiveness of internal control with the securities and futures business qualifications. The film by experts known as the Chinese version of Safari enacted, means that China's internal control specification system will make significant progress. Enterprises in the internal control design level, the implementation level, there are some problems, and internal control attestation not only can help enterprises to improve their internal control construction of its internal control oversight from outside the enterprise, but also conducive to the regulatory authorities, which regulate the capital The operation of the market, and to protect the interests of investors. With the development of the capital market, stakeholders demand will show a widening of the internal control attestation business.
Five ministries on a number of supporting guidelines to the public comments, which registered 'Association to develop the internal control attestation guidelines (draft) "(hereinafter referred to as" forensic guidelines "). Since the guidelines still in the exposure draft stage, some issues are still differences, enterprises and units to carry out the work of the internal control attestation, there are still many obstacles.

Two, the development of the system of internal control attestation background

(A) internal control attestation development in the United States
The beginning of the 21st century, such as Enron, WorldCom fraud incidents, greatly shaken investor confidence in the capital markets. To strengthen the responsibility of listed companies, the U.S. Congress released in July 2002, 302 and 404 of the Sarbanes - Oxley Act provisions, the CEO, CFO or similar functions must be a written statement on internal control design and responsible for the validity of the execution and management's evaluation of internal control report requirements together with periodic reports disclosed the report need to be a registered accountant forensic. This indicates that the U.S. company's management internal control report by the previous voluntary disclosure to mandatory disclosure.
The U.S. Public Company Accounting Oversight Board (PCAOB) Auditing Standards No. 2, "and the combined financial statement audit released in March 2004 conducted financial audit report on internal control" (AS2), the forensic financial reporting, internal control evaluation report gave a detailed provisions, and two integrated forensic concept. At this point, the modern audit also fully into the new era of the Financial Reporting forensic and internal control attestation and try. Since AS2 implementation, PCAOB has been concerned about its progress closely, concerned about the results show, part of the terms of AS2 problems, PCAOB Auditing Standards No. 5, "with the audit of financial statements integrated financial reporting internal control audit 2007" ( AS5) replace AS2. The main objective of AS5 requires the auditor to audit resources to focus on investment in high-risk areas, while striving for the internal control significant deficiencies in the statements of material misstatement before.
(B) the internal control attestation development
In Chinese
Internal control to carry out forensic originally from the Commission may require. In 2001, the internal control attestation business needs major limitations in the proposed public offering of securities of commercial banks, insurance companies and securities firms in the financial sector, then the SFC to the disclosure of information in the form of content and format requirements, will the internal control Kam permit expanded to apply for the initial public offering and listing of the Company in the territory as well as the range of application for the issue of new shares listed companies.
From the late 1990s, China's securities and financial regulatory requirements to hire an accounting firm to conduct independent forensic or evaluation of related internal control. In February 2002, in order to standardize the certified public accountant to perform internal control audit business, clear job requirements to ensure that practicing quality, issued by the Chinese Institute of Certified internal control audit guidance. Theorists and practitioners, as well as regulatory authorities in the nature of the internal control attestation defined evaluation criteria, evaluation, and time range covered by the evaluation, there is considerable controversy. "Guidance" at the technical level of the internal control attestation given guidance, but from regulators, investors essence of the internal control attestation demand is still lagging behind.
Since 2002, China's securities and financial regulatory rules have been big changes in internal control specifications building also made significant progress, especially promulgated by the internal control attestation Guidelines (draft), Certified Public Accountant, internal control attestation, higher demands, but also for the internal control attestation Guide to the specification of the operational level. The current situation and problems of the listed company's internal control attestation

(A) listed on the company's internal control attestation disclosure of the status quo
Internal control attestation of the public listed company with a strong demand, internal control attestation of the listed companies contribute to help the intended users make economic decisions; contribute to the supervision and management of the securities regulatory authorities; reliable help to strengthen the financial report and prevent major corporate corruption.
At present, China regulators require listed companies to disclose internal control information, internal control attestation report is not mandatory disclosure requirements the except (IPO), that the areas of internal control attestation report of China's listed companies is still a voluntary disclosure. According to Lin Bin, RAO Jing (2009), in 2007, the Shanghai and Shenzhen 186 A-share listed companies to voluntarily disclose the internal control attestation report, and the evaluation of the internal control audit opinion issued by the auditors are unqualified opinion that is the trial units with the financial statements related to internal control is effective, in all material respects; find the better the quality of the company at the same time more power to give the market the quality of the signal by the foreign disclosure forensic report.
(B) to carry out the internal control attestation problem
Strengthen internal control building and developing the internal control attestation process in China, there are many problems and obstacles, contribute to a correct understanding of these issues related to the implementation of improvements and improve the internal control attestation, it better to play a role in safeguarding , and thus to avoid the occurrence of financial fraud. The ongoing problem of the internal control attestation is mainly manifested in the following aspects:
An internal control attestation standard legal level low times. "Company Law" and "Securities Act" does not explicitly require the company to establish an effective internal control and its forensic system. SFC largely by normative documents in the form of requirements for internal control evaluation, such as the "Public Offering of Securities Company Information Disclosure Rule" and "public offering of securities of the company information disclosure content and format guidelines", Shanghai and Shenzhen in 2006 Stock Exchange, respectively, released internal control guidelines for listed companies, require disclosure from the 2006 annual report from management on internal control self-assessment report, published by the accounting firm evaluations.
Lack of internal control attestation standards. From the late 1990s, China began to implement the system of internal control. Compartmentalization and trade restrictions, the different regulatory authorities introduced various internal control regulatory rules, the definition of internal control and content requirements also vary. Until July 15, 2006, the Ministry of Finance, the SASAC, the Securities and Futures Commission, the Audit Commission, the China Banking Regulatory Commission, China Insurance Regulatory Commission jointly initiated the establishment of the internal control standards committee, and began to develop a standardized and unified internal control standards system. I believe that "internal control attestation guidelines only general guidance, the widespread implementation of the internal control attestation business practice guidelines listed companies as a CPA also open to question. Internal control attestation first need a set of evaluation criteria, up to now, China has not yet formed a standard system of internal control attestation, seriously restricting the development of China's internal control attestation.
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