Internal Control And The Application Of COSO Framework In The National Telecom Enterprises

Enterprises have been losing greatly by the ever-emerging of scandals of big corporations' feigned financial status and their losing control of managements. Thus the supervision authorities and investors have paid great attention to their managements, internal controls and authenticities of their financial reports and risks control of the come-into-the-market companies. They also issued many laws and rules to restrict them. These laws and rules put higher standards to their operation and management, obliging them to strengthen their internal managements and controls to avoid risks and lose. Under such circumstances, they will have to promote their businesses and win more profits under the competing environment as well.Our 4 main telecom enterprises have come into the international markets, like mentioned above, they also face the same problems. For their large scale, complex businesses and great influences, they are likely to become the focus of both the supervision authorities and investors. Therefore, they should pay much more attention to their internal managements and controls.Aiming at avoiding risks, ensuring the authenticities of financial reports, enhancing their running efficiency and effects, this article will study the mechanism, effect and function of internal control and the application of COSO Framework in China Telecom, trying to find a solution for our national telecom enterprises.This article consists of 4 parts. The first part is to illustrate the background and purpose of the argument; the second part is to discuss the theory of internal control, including analyzing the framework of internal control, expatiating the configuration of COSO Framework, and the establishing and running of internal control system; the third part is to analyze concretely the examples of China Telecom which has established its internal control system, combined with COSO Framework; the fourth part is a conclusion, emphasizing further the importance of internal control and its future prospect.