Internal Control Research Based On The Value Chain Management

Internal control is a historical and young topic. From ancient time to now, internal control impenetrate social activity of every aspect. The organization implements when fully use the each kind of resource to increase the management efficiency to achieve the pre-set managing target. The various kinds of restrictions and organization, planning, methods and procedure form internal control of enterprises. Internal control is an impersonal request and credible guarantee for modern management of any cooperation. The establishment, administration, examination, testing and evaluation of internal control's system are a concerned question for modern management and modern audit. Thus, internal control plays an important part in theoretic research and economy development. Comparing with internal control, the idea of value chain management is produced latter, but it developed fast. Nowadays, the value chain management has become a new management method, orienting market and clients, aims at improving ability of competition, market occupation, resource utilization and economizing cost in order to get the maximal value, uses the modern management thoughts, methods and information technology to control and layout the information quantity, capital fluid, logistic and value fluid effectively. With doing these, it can strengthen the advantage of core competition of any enterprise.From the aspects of the value chain management, this article tries to mix this thought into the enterprise internal control in order to promote the enterprise's internal function and the core competence. The goal of the enterprise internal control that based on the value chain management is to achieve the maximum of the enterprise value. However, Economic Value Added (EVA) can truly measure the enterprise value creativity and the managing system and the urging structure as well. The core of the value chain management is to reduce the cost so as to achieve the maximum of the EVA. The paper uses Activity-Based Costing (ABC) as the tool of the enterprise internal control and connects with the EVA to create the value for the enterprise. Therefore, based on the environment control, treating EVA as the main line ABC as the principles, and taking the environment control, activity control, information and communication, supervision and urge and enterprise culture as the establishing elements, this article follows the internal control goal when processingthe internal control design that based on the value chain management. Referring to the report from the COSO of the Tredway Committee, it gives the enterprise internal control the new meaning. It is anticipated that it can make the maximum function of the internal control restriction and urge, and raises a brand new thought and some reasonable suggestions for the enterprise internal control of our country.