Research on the most popular goal oriented interna

Research on objective oriented internal control index

since the promulgation of SOX act in the United States in 2002, the practice and theoretical research of internal control have made considerable progress. The Ministry of Finance and other five ministries and commissions have successively promulgated the basic norms of enterprise internal control (hereinafter referred to as the basic norms) and the supporting guidelines of enterprise internal control (hereinafter referred to as the supporting guidelines) on the basis of learning from foreign experience and based on China's reality, forming the standard system of enterprise internal control in China. Since January 1st, 2011, China's listed companies have begun to implement the enterprise internal control standard system in batches. At present, the main board listed companies in China have fully implemented the enterprise internal control standard system, and the small and medium-sized board and GEM listed companies voluntarily disclose internal control evaluation reports and internal control audit reports. With the gradual strengthening of the implementation of internal control in China's enterprises and the continuous expansion of the scale, the theoretical and practical circles are eager to understand the effect of the implementation of internal control and its influencing factors, which inevitably involves the evaluation of internal control. However, at present, there are many defects in the evaluation technology and methods of internal control in China, and the theoretical and practical circles urgently need a scientific and comprehensive method to evaluate the quality of internal control. Based on the review and theoretical analysis, this paper builds a goal oriented internal control index based on the institutional background of our country, in order to scientifically and comprehensively evaluate the effectiveness of internal control of listed companies, provide a basis for listed companies to improve the construction of internal control, provide a basis for regulators to evaluate the level of internal control of listed companies, and provide a quantitative basis for empirical research on internal control. （1） Internal control defect index SOX Act requires the management of listed companies to evaluate the effectiveness of internal control, disclose internal control defects, and hire certified public accountants to conduct internal control audit. Based on this institutional background, some scholars, when evaluating the efficiency of internal control, have included in detail the data of internal control defects and internal control audit reports disclosed by Listed Companies in accordance with sox302 and SOX404 by whether to disclose internal control defects, or by dividing internal control defects into major, important and general defects, or internal control databases at the company level and accounting level ①. In China, Li Wanfu et al. (2011) obtained information on internal control defects from self-examination reports and rectification reports, and built an internal control defect index. Tian Gaoliang et al. (2010) used the method of geandmcvy (2005) to construct the internal control defect index. Zhou Shouhua et al. (2013) studied the current situation of internal control of Listed Companies in 2012 and found that among 2223 listed companies that disclosed internal control self-evaluation reports, only 8 companies disclosed major defects. Shenzhen Dibo Enterprise Risk Management Technology Co., Ltd. (hereinafter referred to as "Shenzhen Dibo" has constructed the internal control and risk management database ②, which contains the internal control defect data disclosed by listed companies since 2007. The construction of the internal control defect index provides a quantity for scientific research on internal control * this paper is the key project of the National Natural Science Foundation of China, "Research on the effectiveness of enterprise internal control based on Chinese context" () The phased research results of the National Natural Science Foundation Project (,), the Guangdong provincial key research base project of Humanities and Social Sciences (11jdxm79004), the humanities and social sciences research youth fund project of the Ministry of Education (14yjc790097) and the Guchuan excellent youth Scholarship Fund Project (2013). It has promoted the development of empirical research on internal control. However, there are also some problems in the existing internal control defect index research, which are mainly reflected in: * *, there is a certain subjectivity in the disclosure and division of internal control defects in the United States, and American listed companies only disclose internal control defects in financial reports; Second, the identification and disclosure of internal control defects is still in its infancy in China (Yang Youhong and Li Yuli, 2011), and the definition and classification standards of internal control defects are not unified. For example, Li Wanfu et al. (2011) defined major internal control defects according to internal control audit standards, and Tian Gaoliang et al. (2010) limited internal control defects to account level defects; Third, at present, the disclosure of internal control defects in China is not standardized. It is common for listed companies to avoid the important and take the light when disclosing internal control defects, classify some major defects as important defects or general defects (Ding Yougang and Wang Yongchao, 2013), and it is also common to omit or conceal disclosure ③, making it difficult for the existing internal control defect index to truly and objectively reflect the internal control quality of listed companies. （2） Process oriented internal control index some scholars build an evaluation index system to evaluate the internal control information disclosed by listed companies, forming a process oriented internal control index. Botosan (1997) constructed the company disclosure index based on the information voluntarily disclosed by 122 manufacturing enterprises. Moerland (2007) from the disclosure of the scope of internal control, the description of the internal control system, the disclosure of the improvement or significant change of the internal control system, the evaluation of the effectiveness of the internal control system, the management's evaluation of internal control, the functions of the board of supervisors and the Audit Committee in the internal control system, whether to establish internal control guidelines with an international perspective, the disclosure of external audit Whether to disclose the internal auditors' internal control functions in the company to build the internal control information disclosure index. In China, some scholars measure the quality of internal control of listed companies by whether to disclose internal control self-evaluation reports or internal control audit reports (such as Fang Hongxing et al., 2009; Xiao Hua and Zhang Guoqing, 2013; Tong Yan et al., 2012; Lu Rui et al., 2011). Some scholars build internal control information disclosure index based on the internal control information disclosed by listed companies, such as Sun Ye and Lin bin (2008) and Shenzhen Dibo process oriented internal control index, which provides a new idea for measuring the quality of internal control and promotes the development of empirical research on internal control in China to a certain extent. However, the existing process oriented internal control index still has some problems: * *, there are too many subjective judgments when scoring the internal control information disclosed by listed companies; Second, whether the disclosure of internal control information can measure the quality of internal control remains to be discussed; Third, the process oriented internal control index is based on the voluntary disclosure of internal control information, but currently the main board listed companies enforce the implementation of the internal control standard system, and comply with the "rules for the compilation of information disclosure by companies publicly issuing securities No. 21 - General provisions of the annual internal control evaluation report" issued by the CSRC on January 3, 2014, while the small and medium-sized board and GEM listed companies voluntarily implement the internal control standard system, Voluntary disclosure of internal control information, changes in internal control regulations make the process oriented internal control index unable to adapt to the current development of internal control practice. （3） Objective oriented internal control index objective oriented internal control index is based on internal control objectives. Gordonetal. (2009) selected 112 U.S. listed companies that disclosed the implementation of enterprise risk management in 2005 as samples, and formed the enterpriseriskmanagementindex (ermindex) based on the "enterprise risk management - integrated framework" (hereinafter referred to as "goal following") issued by COSO in 2004. Zhang Ying and Zheng Hongtao designed the internal control index based on the realization degree of the four goals of coso-erm (2004) through a questionnaire survey. Zhang Xianzhi and Dai Wentao constructed a trinity internal control evaluation model of enterprises, certified public accountants and regulatory departments, and designed the corresponding internal control index system. The research group on internal control index of Chinese listed companies (2011) and Zhang Zhaoguo (2011) constructed the internal control index based on the degree of realization of the internal control objectives of the basic norms. The research on goal oriented internal control index is helpful to comprehensively evaluate the effectiveness of the implementation of internal control, but the main problems of the index research at present are: * *, the theoretical basis of index construction is weak; Second, the selection of indicators is not representative, which can not systematically and comprehensively reflect the effectiveness of internal control of listed companies. In view of many deficiencies in the current internal control index research, it is necessary to further explore the internal control index to scientifically and comprehensively reflect the real situation of internal control of listed companies. This paper will build a goal oriented internal control index from the perspective of internal control "results". 3、 Basis for the construction of objective oriented internal control index this section discusses the basis for the construction of objective oriented internal control index, Including physical construction framework "The foundation and premise of system theory. System theory emphasizes the use of system theory thinking to describe and understand the characteristics of complex systems. It requires that all parts and links within the system, as well as the internal environment and external environment of the system, be regarded as the dynamic relationship of mutual connection and mutual restriction, establish the viewpoint of dynamic development, and look for the optimal scheme that the system can achieve. As an index to quantify the level of internal control, we should start from the perspective of system thinking and fully Considering the dynamic interaction of various objectives and elements of internal control, the index construction should not only comprehensively reflect the internal control status of the enterprise, but also fully consider the internal relations of various objectives and elements, so as to be comprehensive, systematic, scientific and feasible. (2013) requires the management to implement the method of goal orientation and principle basis into internal control. When the five elements of internal control exist and play a role, and the reasonable assurance of the realization of internal control objectives is achieved, internal control can be considered effective. COSO framework is an internal control practice for hundreds of years ③ the average proportion of major defects disclosed in the three years (i.e. years) after the implementation of SOX404 in the United States is 12.81%, while the average proportion of major defects disclosed in the three years (i.e. years) after the implementation of enterprise internal control standard system in China is only 0.72%, with a difference of nearly 18 times. The crystallization of summary and refinement has been widely recognized by countries all over the world. COSO (2013) is a comprehensive and cutting-edge internal control framework. Based on it, the goal oriented internal control index can have a solid theoretical foundation ④. Based on coso-erm (2004), an enterprise risk management index is constructed to evaluate the effectiveness of internal control around the realization of strategic objectives, business objectives, reporting objectives and compliance objectives. Among them, market share and risk coefficient indicators are selected to measure strategic objectives, total asset turnover and labor productivity indicators are selected to measure business objectives, audit opinions, financial restatement and major defects, earnings management indicators are selected to measure reporting objectives, and audit fees and loss compensation indicators are selected to measure compliance objectives. According to the summary of this article, since the publication of SOX act, 84 empirical papers on internal control have been published (or have been accepted) in the top5 ⑤ Journal of international accounting. In recent years, China has only studied internal control, which provides a solid theoretical basis for this study. Based on the theory and, to build a goal oriented internal control index. With the rapid development of economy and capital market, our government began to pay more and more attention to the construction of internal control system of enterprises. The basic norms and supporting guidelines issued by the Ministry of Finance and other five ministries and commissions have basically formed a normative system of internal control in Chinese enterprises. This system is composed of two parts: the standard can't slip system and the evaluation system. The standard system is composed of the "basic norms" and 18 "guidelines for the application of enterprise internal control". The evaluation system is composed of the "guidelines for the evaluation of enterprise internal control" and