Internal Control Development Problems

All through the ages, internal control is of the great concern in the research of accounting and audit. Now, with the corporation governance being the heated topic generating the worldwide concern, internal control, as an important part of it's operating system is drawing high attention of academic field of economy, management and politics, sociology as well. However, there is no unanimous understanding to the basic issues of internal control. In the new issue of COSO report, internal control is defied as the core in the enterprise's risk management system, which has caused various guess on the developing direction of internal control. In our country, the new Accounting Law depicts it clearly that all the units should set up and perfect the internal accounting supervision system, which is one of the legal responsibilities of the principals. Following that, the Ministry of Finance successively issued a series of instructive documents called "internal accounting control", including "the basic principles", "monetary capital", "purchase and payment", "sales and reception" and "engineering project" to guide the internal accounting control in each unit all over the nation which leads to the highest concern on this matter nationally and thus the set-up and perfection of internal control has been viewed as the most important task of accounting and the overall economic management nowadays. However, the issued internal accounting control principles can't solve such problems as the implication of internal accounting control as well as its relation with internal control, and the proper mastery of its boundary in practice to assure each unit to take the certain legal responsibility, on which there's little theoretical exploration and research. Since there's urgent need for the study of this issue, titled with "the development of internal control", this dissertation discusses about the historic development of internal control, the theoretically and practically confronted critical challenge, and how to establish new internal control system incoherence with the development of the ages.Chapter 1, from the auditing perspective, thoroughly reviews the theoretical and practical development history of internal control and points out that it is objectively submitted to the theoretical and practical development of independent audit, and therefore, its basic content is existing as the objective base of independent audit, which explains why internal control is attached special importance in the scope of auditing research while not in other closely related field like management.Chapter 2, encircling the problem of management control, thoroughly summarizes various representative viewpoints on management control from both the aspects of theory and practice, digging deeply and systematically into the management control methods which can symbolizing the level and feature of different historic stage with the attempt to make up for the great deficiency of traditional internal control research.Chapter 3, makes a sound judgment for the trend of internal control development base on the complete comparison between "internal control from the perspective of audit" and "internal control from the perspective of management". The author believes that the notion of internal control should be redefied in view of the management control and argues the necessity of this transfer from the three aspects: the characteristic of control object, the shift of control points and the serious deficiency of traditional internal control's hypothesis.Chapter 4, invents the new theory of internal control applying the economic evolution theory and builds its general framework, which is the fundamental objective of the internal control development in the 21th century and hopefully to be the declaration of new century's construction of internal control system, including three interdependent and interactional levels: all-employee's self-learning control at the level of individual, business ecologic system control at the level of corporation as well as the enterprise influence cont...