A Study On Internal Control Of Financial Enterprise

Worldwide financial crisis happens frequently since 1970s, which has caused enormous social and economic damage. The fragility of financial system is the inherent inducement of the financial crisis. The reason that causes the crisis finally is very complicated. But improper management and internal control is always one of the most important causations. While integrating with the world, although there is no great obvious crisis taken place in China's financial industry, the risk contained among them is still self-evident for the non-performing assets of the high proportion in state-run commercial banks, security companies etc. It has been over two years since China's accession to the WTO, which has pushed its financial institutions into the frontier of competition. And it has become a realistic and urgent problem that how to take precautions against the operation risk and promote the key competitiveness through strengthening internal control construction. Although China consists on a separated operation policy, there are financial holding groups with different forms in reality, managing different financial business. These financial groups develop in an environment lack of legal supervision, as leads to a particularly weak internal control. Under this condition, there is undoubtedly a rich realistic meaning to study on internal control of financial enterprise and financial group.The study methods in the paper combine positive investigation approach and normative approach. The paper confirms its key point and direction in normative study under the basis of the information collected in positive investigation. The main achievements of the paper are as follows:1. Launch comprehensive questionnaire investigation to financial employees in China in the capacity of folk independent study. Obtain the firsthand materials of their cognition, appraisal and suggestion on internal control of China's financial enterprises. Investigation results show that China's financial employees learn internal control by a single and passive way, that the financial enterprise's governance structure and risk control method do not work effectively, and that need badly a framework of internal control to be guided which is suitable for the national conditions.2. Analyze the content and key point of its internal control under a framework of five elements in COSO report, combining the financial enterprise's concrete management characteristic.3. Synthesize functional perspective of financial intermediation and thought of the value chain. Put forward a preliminary suggestion of the control panel for financial enterprise.4. Expatiate the mixed operation trend of global financial institution and the rising of financial holding group. Analyze synthetically the special problems of internal control in the financial group that should be paid attention to, which including the internal control from a group's perspective, intra-group transaction and fire wall system of the financial group.