The Research On Internal Control Of Cash In Company A

Internal Control System (ICS) is the product of the development of social economy. With the evolution of enterprise, ownership separates from operation. Shareholders of enterprise delegate daily operations to the professional managers. And today, corporation is the most common form of business enterprises. However, due to the conflict of interests between the owners and the mangers, and due to the problem of information asymmetry, the resulting so called "Moral risk" and " converse choice" inevitably hampers the interests of shareholders. Hence it is critical to establish effective internal control mechanism to ensure that managers behave to maximize the benefit of owners, to consummate internal control, to prevent embezzlement and to ensure mutual benefit of the shareholder and the operator.Cash attracts the embezzlement easily due to its liquidity. The amount and status of cash determines the quality of the firm's income, the solidity of the firm (or put in other words, the ability to repay debts) as well as the future prospects of the firm. Therefore, how to strengthen internal control of cash has become an urgent issue and drawn a lot of attention. And at the same time, it has been used as an important tool to improve the management and hence the competitiveness of the firm.Based on the theoretic framework of internal control, the author selects company A, one of the Fortune 500 companies, to conduct a case study. According to COSO, internal control includes five aspects; Control environment, Risk management, Control activities , Information and communication , Monitoring. In order to expatiate the important role of internal control in the enterprise, the authorfirst analyses the configuration and related characteristics of the internal control system of cash in the target company. And then the author tries to identify the bottleneck of the system and make some suggestions, it set up internal audit to develop the system. Finally, considering that the efficiency and effectiveness of internal control is based on the localization of this solution, the author prospect the foreground of it in combination with advanced theory and working experience of foreign countries.