Influence And Enlightenment Of Sarbanes-Oxley Act To The Enterprise Internal Control

The internal control is the product of social economy, which is an important method of the modern business management. The effective internal control has the positive effect to company's development.The publication of Sarbanes-Oxley Act in 2002 aimed to enhance the accuracy of financial information and protect the investors. The Act would be observed by every company if it listed in America.Choosing Sichuan Telecom Company Limited as a sample, this paper demonstrates the internal control framework of Sichuan Telecom Company Limited after the publication of Sarbanes-Oxley Act and summarizes the suggestions to other enterprise.This paper contains five chapters:Chapter One: A prefaceThis chapter introduces the research background, research goal, innovation and insufficiency of the paper.Chapter Two: The summary of internal controlFirstly, this chapter discusses concept evolution, implication and movement process of internal control. Secondly, the paper explains the primary coverage of COSO Internal Control Framework and analyzes the influence to the internal control development. Thirdly, the chapter analyzes the internal control present situation and insufficiency in our country.Chapter Three: Framework of Sarbanes-Oxley ActThis chapter explains the background and important part of Sarbanes-Oxley Act, and then analyzes important provisions such as 103rd provision, 404th provision and 302nd provision. These Acts request company use documents finance policy and summit the financial report quickly. The regulatory authority must be responsible for the internal control validity and for the reliability of financial report. Finally, the chapter evaluates the important influence of Sarbanes-Oxley Act to our companies.Chapter Four: Analysis and evaluate internal control of Sichuan Telecom CompanyThis chapter is the key chapter of this paper. This chapter introduces the changes of Sichuan Telecom Company Limited internal control under the Sarbanes-Oxley Act's influence, demonstrates the internal control framework of Sichuan Telecom Company Limited and puts forward the improvement proposal.Before the publication of Sarbanes-Oxley Act, Sichuan Telecom Company Limited had not a set of internal control systems and the leaders had not realized the importance of internal control. The company faced with latent risk. Therefore, Sichuan Telecom Company Limited must speed up the internal control construction.After the publication of Sarbanes-Oxley Act, Sichuan Telecom Company Limited establishes the internal control system from three aspects. First aspect, I analyze targets and standards of assessment on internal control system, according to five factors of COSO. Second aspect, I analyze targets and standards of assessment on internal control links. Third aspect, I analyze targets and standards of IT internal control.Sichuan Telecom Company Limited began internal control work in 2006. On the one hand, they emphasis self-assessment;on the other hand, they invited the accounting firm to carry on the appraisal work independently.Implementing Sarbanes-Oxley Act has had the enormous influence to Sichuan Telecom Company Limited. For example, business process, financial information public and risk consciousness. On the one hand, internal control has remarkable effect;on the other hand, internal control has some insufficiencies needing to improve. We suggest the internal control should avoid risk and emphasis efficiency. Improving the enterprise internal control environment, enhancing the management level and the staff controls consciousness, and so on.Chapter Five: Enlightenment and Suggestion This is the important part of paper, which contains five chapters. First part analyzes the Sarbanes-Oxley Act's effect and makes the appraisal. Second part proposes the enlightenment and the suggestion with the implementation internal control. Third part analyzes the enlightenment and the suggestion with the inside the system construction and the capital market supervising and managing. Our country controls from the system construction and capital market supervising and managing should not direct copy Sarbanes-Oxley Act. We should study the model essence. Trusting government and forming an accountability .the culture is very important to Chinese Enterprise.Making a general survey of this paper, the characteristics of the paper are as follows:First, this paper uses research technique which the standard research and the case analysis.Second, choosing Sichuan Telecom Company Limited as a sample, this paper demonstrates the internal control framework of Sichuan Telecom Company Limited after the publication of Sarbanes-Oxley Act. The paper summarizes the suggestions to other enterprise.Third, the topic of the paper has the feasibility and the reality guiding sense to other enterprise.Because of the limit of experience and research level, the paper needs further perfection. I would appreciate very much if teachers and classmates give me suggestions. I would get on my research further in this filed.