Research On University Internal Accounting Control

With the constant expansion of university education, the economic behaviors of universities are becoming more and more complicated. With the increasing of multi-channel fund raising, infrastructure construction and bulk procurement, various financing behaviors appeared such as bank loan and finance lease. Faced with the new situation, university administrators did not take timely and appropriate control measures, which caused certain loss to the universities and gave rise to corruption. The primary reason lies in the imperfection of university internal accounting control system.This Paper deals with the theoretical basis of internal accounting control from three aspects of system theory, control theory and principles-agent theory. It describes the origin and development of internal accounting control, the origin and development of internal accounting control in foreign universities, and the research status at home and abroad. The Paper points out that university internal accounting control is a complete system that covers traditional internal control. Drawing on the complete frame theory raised by COSO Report, the most authoritative in international accounting control field, is the current research trends in university internal accounting control.In accordance with the five elements in COSO Report, this Paper analyzes in details the existing status and problems of university internal accounting control in our country. In terms of control environment, the professional level of administrators is low and the attention is not enough; there is a lack of external supervision, and the enforcement and effects of external audit are inconspicuous; the organizations are inadequate and the authorization and division of labor are ambiguous; the quality of employees is not high and the professional level is low, as a result the campus culture of credibility and morality has yet been formed. In terms of specific control system, universities in our country have the problems of imperfect control system; there is a lack of control measures in important fields such as engineering construction, supplies purchasing, budget control and the management of university-run enterprises. In terms of risk identification, analysis and response measures, the universities did not take timely and effective control measures. Universities in our country did not establish a mechanism for internal accounting control to operate on information and communication aspects, which is of no advantage for the university'to obtain external and internal information in an all-round and effective way, or for the perfection and development of the internal accounting control system. Universities in our country did not establish an effective supervision and evaluation system or form a virtuous circle of internal accounting control. This Paper presents concrete measures to build university internal accounting control systems in our country from five aspects:Strengthening environment construction for university internal accounting control. It is proposed that a chief accountant shall be added to the leading group of universities to strengthen professional level of leaders and the awareness of administrators on internal accounting control. Institutional framework shall be set up scientifically for rational division of labor and authorization, and to define responsibilities clearly. It is emphasized that a strong contingent of personnel shall be built and the management level of employees shall be enhanced. The education of credibility and moral consciousness shall be strengthened among staff and workers so as to form a favorable campus culture for internal accounting control.Strengthening risk control, building university risk assessment system and risk early-warning mechanism. Universities shall formulate an organization for risk identification and early-warning, and implement institutionally the responsibilities of risk identification, risk analysis and risk response. It is proposed that the"Leading Group of Internal Accounting Control"shall take the responsibility of risk control. Universities shall improve financial analysis and build an index system for risk assessment. This Paper comes up with a solution of analyzing financial risk from the angles of cash flow and balance of payments, and presents the concepts and the evaluation indexes of"residual cash flow"and"cover of interest on debt". Meanwhile, universities shall formulate a collective decision-making mechanism on major issues to guard against potential risks.Improving the contents and measures of university internal accounting control, This Paper proposes to perfect the budget control of universities so as to ensure that the budgeting process to be legal, the contents to be comprehensive and specific, the budget enforcement to be strict and effective, and the seriousness of budget to be maintained. Control of construction projects shall be improved and the quality shall be guaranteed, moreover, corrupt practices during the construction process shall be prevented and the engineering expenses shall be controlled firmly. Procurement and payment control shall be improved so that all procurement shall be handled reasonably and economically by needs, articles and appliances that meet the conditions and requirements shall be procured with minimum investment, safety and completeness of procured articles shall be ensured and corrupt practices during the procurement process shall be kept away. Internal control on financing shall be improved by strengthening authorization and examination, by separation of incompatible duties, by strengthening supervision and inspection system so as to prevent financial risks practically. International control system of university-run enterprises shall be perfected, and to strengthen the actual control on university-run enterprises, an accounting delegation system shall be implemented in university-run enterprises.Building an information communication mechanism for university internal accounting control system. Universities shall publicize information on university management in a timely manner and establish a report-feedback system so that the staff and workers can get enough information for better implementation of their responsibilities. A highly efficient, open and uniform information communication system shall be built, which will benefit the perfection and development of internal accounting control system.Formulating a monitoring and evaluating system for university internal accounting control, and highlighting the rationality and effectiveness of internal accounting control system. Universities shall intensify organization construction and emphasize the independence and authority of the monitoring and evaluating organization. The evaluating organization shall adopt a qualitative assessment method to evaluate the internal accounting control, and the idea of multiple monitoring and evaluating body shall be highlighted. Universities shall engage certified public accountants from accounting firms to evaluate the internal accounting control system and issue a special audit report.To sum up, this Paper researches university internal accounting control, analyzes in depth the existing status and problems in university internal accounting control, draws on the complete frame theory of COSO Committee, proposes concrete measures on formulating university internal accounting control system, which has strong maneuverability and a model function on the construction of university internal accounting control.