A Study On Internal Control System Of Telecommunications Enterprises In China

Internal control system has become an important part of the modern enterprise system. Effective internal controls can help companies achieve the set objective to improve the efficiency of resource, reduce the risks faced by business. However, internal control failure would be often devastating consequences for enterprises. This point has been confirmed by a large number of cases. At the same time, it promotes the research and practice of internal control Worldwide. In this promotion, internal control with sustainable development has been entering the stage of risk management.With the accelerated process of market-oriented and the deepening of reform of China’s telecom industry, the telecom business environment has undergone major changes. At present China’s telecom enterprises get more development opportunities as well as the increasing risks. In general, the development of China’s telecom enterprises shows the characteristics of the times of "rapid growth" and " rapid change".Therefore, we must establish risk prevention-oriented internal control system to prevent and resolve various risks faced by telecommunications companies, in order to achieve the sound operation of China’s telecom enterprises and the sound and rapid development of national economies.Based on the the characteristics of the times showed by China’s telecom enterprise "rapid growth" and "rapid change"and the problems of internal control for China’s telecom enterprises, the dissertation designs internal control system for China’s telecom enterprises by learning from foreign experience, and analyses the essential safeguard measures to help the system established run efficiently and steadily.Firstly, this dissertation reviews the latest literature of the theoretical community, and finds that the most research on the internal control system are rough relatively, and the system designed by those research mostly lacks of operability. Besides, the historical process of internal control is also discussed, as well as some relative theories, including the principal-agent theory, the system theory, the cybernetics, the information theory, the risk management theory and the value chain theory.Secondly, by using of the international comparative research methods, the research conducts a comprehensive comparison study on the internal control system of United States, Britain, Canada, Japan and Hong Kong, especially focusing on the subjective of internal control, the component elements and the assessment of the internal control system. At the basis of the international comparative research, the research discusses some similarities and differences about the design of the internal control system in the above mentioned counties, in order to get the experience and enlightenment for the internal control design of China’s telecom enterprises.On this basis, the dissertation discusses internal control status and problems of China’s telecom enterprises through questionnaire and fieldwork. According to these problems and reasons, this research, based on the characteristics of the times of "rapid growth" and " rapid change", hold that the principle" simple and clear process, outstanding and effective content, accurate and timely evaluation" should be insisted on in the design of China’s telecom enterprises. In the light of the basic principle, the dissertation divides the internal control system into eight subsystems, including the internal environment subsystem, the objective setting subsystem, the event identification subsystem, the risk assessment subsystem, the risk response subsystem, the control activities subsystem, information subsystem, the communication subsystem and the monitoring subsystem, and puts emphasis on key points in the establishment of each subsystem. At the same time, the research provides relative assessment method to assess the internal control system.What should to be point out is that, in order to make the system be up to the characteristics of the times and the establishment of China’s telecom enterprises, this research brings the case-based reasoning (CBR) into the risk assessment subsystem to take full advantage of CBR, such as easy operation, fast reaction, self-learning and low cost advantage, and then promote the efficiency of risk assessment.Finally, the dissertation discusses the essential safeguard measures of the internal control system of China’s telecom enterprises. The safeguard measures include at least the following four aspects, sound corporate governance, good internal control environment, solid foundation of enterprise management and effective internal control supervision mechanism.