A Study On The Application Of Corporate Internal Control Theory In The Cash Stream Management

As the most important new progress of corporate financial theory, corporate internal control theory is the core part of company internal management system. The dominant goal of internal control is to reduce illusory accounting information, protect asset integrity and security, and guarantee to reach the firm's target as well. In the time of "cash is king", how to strengthen cash stream management and control has been the focus in every firm. Only in the environment of perfect corporate financial internal control does the cash stream management system bring into full play, promote company operation efficiency and effectiveness, and protect the truthfulness of information disclosure. Now that the most content of cash stream management vests in internal control, we apply the thoughts of internal control theory to cash stream management after analyzing the theoretical framework of internal control theory. Firstly, we analyze the development history of corporate internal control theory and its basic factors, and compare different controlling pattern, so that we establish the primary framework of internal control theory. Secondly, we study the influence of the current criterion and mechanism of internal control to cash stream management, and we conclude that internal control mechanism will affect the corporate value through affecting the direction and size of cash flow in the end. We disclose how to promote the ability to manage cash stream by both strategic and tactic ways of internal control establishment to enhance corporate value. Thirdly, we analyze fully and deeply a model firm's cash stream management system, including organization framework, behavior standard and internal institution. At the base of the positive and negative points of traditional cash stream management system, we obtain the orientation of system improvement. Finally, we integrate the internal control theory up to date and cash stream management systemto table proposals of improving cash stream management from five aspects such as goal fixing, controlling environment, risk management, controlling pattern and information system.