Internal Control And Corporate Governance Research

This thesis studies internal control and corporate governance adopting normativeresearch as its major methodology. First of all, the thesis conducts innovativedescription of such basic concepts as enterprise, enterprise objectives, internal, control,internal control, objectives of internal control, governance, corporate governance andessential elements influencing internal control with the use of theories related toeconomics, management, modern business and accounting. This lays down theconceptual and theoretical foundation for subsequent analysis and inference.Secondly, focusing on internal control evolution in China and the USA, the thesisreviews the various stages we have experienced in understanding and applyinginternal control, covering internal check, internal accounting control and internalmanagement control, internal control structure and the internal control梚ntegratedframework of COSO. Detailed description and objective comments on COSO areincluded in the thesis. Thirdly, the author defines the internal characteristics andexternal expressions of effective internal control as well as major means to achievesuch effective internal control. This is done on the basis of theoretical study (as ispresented in the first part) and summary of practices (as is seen in the second part) andfrom the perspective of an enterprise operator and manager rather than an externalauditor or evaluatorThe thesis consists of 6 chapters. Chapter 1 is an overview of the concepts of internal control and corporate governance. The author uses relevant theories of economics, management, modern business and accounting to narrate and infer the basic concepts of internal control and corporate governance. Chapter 2 introduces the evolution of enterprise internal control with a detailed review of such evolution in China and the USA. Reference is made to understand the definition of internal control in Britain and Canada and by the Institute of Internal Auditors (IIA). The author also analyzes how people change their understanding and application of internal control in real practice. Chapter 3 concentrates on COSO reports and the author's comments, constituting a focus of this thesis. The author begins with a4clarification of the research methodology and process adopted by COSO reports followed by a detailed introduction about the major contents of COSO reports, the 1994 Additional Provisions for External Reporting and the 1996 suggestions on the use of internal control in financial derivatives. Afterward, the chapter introduces other internationally popular criteria for assessment of business performance, including "fortune" criteria, USA Malcolm Baldrige National Quality Award (MBNQA) and ISO 9000, etc. In the final part, the author comments on COSO reports, pointing out their obvious defects while holding an affirmative attitude towards such reports. Chapter 4 describes the objectives and features of effective internal control. Based on the concepts and basic objectives of internal control, the author puts forth the internal and external features of effective internal control. Chapter 5 focuses on 8 major means to realize effective internal control, covering effective corporate governance, internal organizational structure, process management, comprehensive asset management, risk management system, accounting and financial reporting, supervisory review and contingency mechanism and corporate culture. Chapter 6 concludes the thesis along with some useful revelations. The thesis covers the following major points:1. An enterprise is the combination of various contractual relations, the collection of various processes and the premise where human groups concentrate.2. In terms of enterprise internal control, "internal" starts from the incorporation of an enterprise and the establishment of a legal person governance structure and stretches to after-sale service and market research after the products are marketed or sometim...