Design Of Financial Supervision And Control System For The Industrial Group Of C University

Enterprise group is a form of business organization in order to adapt to modern productivity and market economy's demand .It is an economic joint-organization made up of several legal persons which is mainly connected with property rights and based on modern business system. In the group, parent company, the investor and shareholder of subsidiary company, can only manage subsidiaries through corporate governance institutions such as the general meeting of shareholders, board of directors and board of supervisors.Inspired by the form of enterprise group, Chinese universities start to try to make managerial assets transfer to university assets corporations with the authorization of unified operation of managerial assets and the responsibility of value maintenance and increment. Universities undertake limited liability. within the limit of the investment of assets corporations. Establishment of university assets corporations through administrative transfer is an important exploration of the management system of school-run industry. In a group every member enterprise is an independent legal person legally and manages in respective business scope with a common goal. C university enterprise group is such a group that posseses a whole - capital holding enterprise.In practice there exist interests contradiction and information asymmetry owing to multi-level principal-agent relationship in the C enterprise group. Thus absence of financial supervision becomes the core factor influencing enterprise internal management. Financial supervision refers to the enterprise internal financial management system, which is in essence the financial supervision to subsidiary companies from the parent company in order to ensure the normal operation of economic activities. The financial supervision of enterprise group refers to controls on subsidiaries in value creation and critical management links such as financing, investment, distribution and capital management so as to reduce adverse selection of operation targets. And this is exactly the core and weak link of current management of university enterprise groups.This paper takes C university enterprise group as the research object , evaluates its financial supervision and constructs a strongly operational, scientific and timely financial monitoring system including budget management , financial supervision, personnel supervision and performance evaluation. This paper's research emphasis is the parent company's financial supervision on subsidiary companies. Using financial management theory and taking problems exposed in the financial supervision of C university enterprise group into consideration, this paper proposes a complete financial monitoring system composed of financial supervision mode, organization system, institutional system and financial supervision guarantee involving performance evaluation and incentive policy. This system not only strengthens external control over subsidiary companies, but also reduces agent costs in order to motivate managers of subsidiaries. This paper mainly aims at putting forward suggestions to management and provides practical reference and theoretical support for the financial supervision of university enterprise groups. Assisted by constraints the system can manange subsidiaries by means of financial supervision.In the first part, according to domestic theoretical results in recent years financial supervision of enterprise groups is defined that according to regulations, institutions and standards the parent company impels subsidiaries to comply with standards with the ownership of subsidiaries through probationary, examination, analysis and control over significant financial affairs(including financing, investment and distribution) and the behavior way. This part of the paper introduces the C university enterprise group financial supervision situation and analyzes its problems. It is an important measure to ensure the realization of the whole interest of the enterprise group. Its essence is to coordinate interests of different subsidiary companies and let financial supervision objects move to targets set under constraint of financial supervision mechanism. Meanwhile, the part analyzes subject and object, characteristics and basic principles of financial supervision.On the basis of the combination of theory and practice, the second part proposes an overall conception of financial supervision system from the angle of the group company. First, according to the actual situation, external environment and competitive needs the combination of centralization and decentralization transfers to a mode of more centralization with the development of group-company. Second, it defines the organization system of enterprise group financial system, including the board of directors, the board of supervisors, the audit department and CFO. Besides, it also clears each hierarchy's responsibility. Third, it designs the supervision institutional system of C university enterprise group in detail of the budget management system, the large value management system, the unified accounting system, the financial message reporting system, the audit system and the early warning system. The comprehensive budget and item budget of subsidiaries clarify authority and responsibility, refine financial goals and implement effective controls. The budget system made up of beforehand budget, supervision during the course and afterwards analysis realizes dynamic management. Through approval control, budget control, establishing finance companies, assisting subsidiaries in financing and investment, the strategic intention of the parent company runs through finance activities of subsidiaries. Thanks to these unified systems, finance operation standards can be clarified and the accuracy and comparability of financial statements can also be improved. With the effective information support and system guarantee, it is easy to avoid financial risk.The third part is about how to establish an efficient information system, a scientific performance evaluation and a reasonable incentive mechanism. As for financial supervision, an efficient information system is a foundation. The performance evaluation and the incentive mechanism are constraints on the management of subsidiaries. The headquarter turns the strategy, management strategy and competitive advantage into the performance index of the top subsidiary management thus realizing value maximization.Finally, this paper points out that the design of the financial supervision system of C university enterprise group aims at strengthening the parent company's control over subsidiary companies. Owing to different ownership characteristics, industrial backgrounds, scales and management requirements of each enterprise group.We will applicate the system from actual conditions with overall plan and implementation step by step. The sheme will promote the C university enterprise group's financial supervision to subsidarry companies and help realize its development strategy.