内部控制报告和财务报表的问题外文翻译.docx

内部控制报告和财务报表的问题外文翻译.docx

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内部控制报告和财务报表的问题外文翻译

外文文献翻译

原文：

INTERNALCONTROLREPORTSANDFINANCIALREPORTING

Authors:

McMullen,Dorothy,K．Ragahunandan

SYNOPSIS:

Theissueofinternalcontrolreportinghasrecentlybeenofconsiderableinteresttotheaccountingprofession,andhasgeneratedsignificantcontroversy.TheTreadwayCommission,thePublicOversightBoardandtheBoardofDirectorsoftheAICPA,amongothers,havesuggestedthatsuchreportingcanservetoenhanceinternalcontrols.Othershavequestionedtheusefulnessofsuchreports.

Thispaperprovidesempiricalevidencerelevanttothedebateaboutinternalcontrolreportingbyexaminingtheproportionsofcompanieswithtwotypesoffinancialreportingproblemswhichhadpriorinternalcontrolreports,andcomparessuchproportionstothepopulationproportions.Specifically,weexaminecompanieswhicheitherweresubjecttoanSECenforcementactionorcorrectedpreviouslyreportedearnings.ResultsindicatethatsmallercompanieswithafinancialreportingproblemweremuchlesslikelytohavehadamanagementreportoninternalcontrolthanthepopulationofsmallcompaniesintheNAARSdatabase.

KeyWords:

Internalcontrol,Financialreportingproblems,Managementreporting.

DataAvailability:

Contactthecorrespondingauthor.

Theobjectiveofthispaperistoexaminetheassociationbetweenfinancialreportingproblemsandmanagementreportsoninternalcontrols（MRIC）inauditedfinancialstatements.Motivationforthispapercomesfromtheconsiderablecontroversysurroundingtheissueofinternalcontrolreporting,asevidencedbyrecentactionsandcommentsofvariousprivatesectorcommissions,regulatorsandlegislators.ThemethodusedinthispaperistocompareasampleofcompanieswithfinancialreportingproblemswithasampleofcompanieswithoutsuchproblemsandexaminewhethertheproblemcompanieswerelesslikelytohavehadanMRICinpriorfinancialstatements.

Internalcontrolisabroadconcept,andwecandistinguishbetweeninternalcontrolsastheyrelatetofinancialreportingandothercontrols.AsnotedbytheTreadwayCommission（NCFFR1987）,theterm"internalcontrol"issometimesusedalsotodescribecontrolsoveroperationaltaskssuchasproductqualityassuranceandplantmaintenance.Suchoperationalandadministrativecontrolsdonotrelatetofinancialreporting.

Inthecontextofinternalcontrolsrelatedtofinancialreporting,wecandistinguishbetweeninternalaccountingcontrolsandotherinternalcontrols.Allpubliccompanies,inordertocomplywiththeForeignCorruptPracticesAct（FCPA）,musthaveadequateinternalaccountingcontrols.TheinternalaccountingcontrolsrequiredbytheFCPAdealwith

（1）authorizationoftransactions,

（2）recordingoftransactions,（3）safeguardingofassets,and（4）periodicphysicalverificationofrecordedassets.

TheTreadwayCommission（1987,34）notedthat"controlswhichaffectfinancialreportingdirectlyincludemorethaninternalaccountingcontrols.Theyalsoincludeelementsnotgenerallyconsideredpartofinternalaccountingcontrols,suchastheinternalauditfunctionandtheauditcommitteeoftheboardofdirectors."TheCommissionnotedthatthesecontrolelementsand"allothercomponentsoftheoverallcorporatecontrolenvironment,togetherwiththeinternalaccountingcontrols,comprisetheinternalcontrols"thatpreventproblemsinfinancialreporting.AllcompaniesalsomayhavevaryingdegreesofinternalcontrolsotherthantheinternalaccountingcontrolrequiredbytheFCPA.Theextentofattentiongiventointernalcontrolscanvaryacrosscompanies.

Specifically,therecanbesignificantdifferencesintheimportancegivenbytopmanagementtotheissueofinternalcontrols.Suchvariationsinthe"toneatthetop"inturncanhaveaninfluenceonthesignificanceattachedtointernalcontrolswithinthecompany,andconstituteanimportantelementofthecontrolenvironmentofthecompany.Thus,forexample,theTreadwayCommission（1987,32）notedthat"Thetonesetbytopmanagement--thecorporateenvironmentorculturewithinwhichfinancialreportingoccurs--isthemostimportantfactorcontributingtotheintegrityofthefinancialreportingprocess.Notwithstandinganimpressivesetofwrittenrulesandprocedures,ifthetonesetbymanagementislax,fraudulentfinancialreportingismorelikelytooccur."

Underthecurrentreportingenvironment,MRICsareissuedvoluntarilybysomecompanies.Asseenintable1,onlyaminorityofcompaniesincludeanMRICintheirannualfinancialstatements.Consistentwiththesuggestionthatinternalcontrolsarebroaderthaninternalaccountingcontrols,asubstantialproportionofMRICsdiscussissuesrelatedtoauditcommitteesandinternalauditing.Inaddition,manyMRICsdiscuss,invaryingdegreesofdetail,specificissuesrelatedtointernalcontrols（suchasacodeofconduct,personnel