A Study Of State-owned Corporates' Internal Control On The Basis Of Corporate Governance

By analyzing the relation between corporate governance and internal control ,features of corporate governance and these features'effect on state-owned company's internal control, this paper puts forward material measures based on corporate governance.Corporate governance is a concept with excessive angles, in narrow sense, it is a supervision and restriction mechanism that shareholder throw on manager, in broad sense, it includes not only shareholder's restriction on manager, but also Stakeholders, including shareholders, creditors, providers, employees, government and community et.. Internal control's concept experiences five phases, which is internal diversion, internal control system, internal control structure, internal control frame and risk management frame.Internal control's genius is to build an effective control system, which aims to remedy contract's faultiness. Corporate governance and internal control also belong to system arrangement, which ensures company's function in gear, they not only have consanguineous relation, but also have qualitative difference, their final aim is consistent, namely, ensuring firm's goal.In state-owned companies, corporate governance have three problems, which are equity structure's inborn bug, function mechanism's postnatal badness and exterior circumstance's s curviness. Equity structure's inborn bug embodies two sides, first , equity structure's illogical, state-owned shareholders'excessive function and other shareholders'minuteness function; second, possessive's ambiguity of state-owned shareholders, client-agent relation's complexity. Function mechanism's postnatal badness embodies three sides: first, internal person's control, excessive duty consumption, information report's abnormity, short-eyes'action et al., second, incentive and restriction's soft; third, new sanhui's conflict with intrinsic sanhui. Exterior circumstance's s curviness embodies that corporate governance's incomplete legal system, exterior governance mechanism's agenesis and manager market's juvenility.Corporate governance's deficiency of state-owned companies brings three abuses to its internal control, namely, shortage of construction, low goal orientation and finity of internal control's coverage. Shortage of construction is attributed to shortage of exterior need, incentive and punish measures. Low goal orientation embodies that goal is excessively easy and risk control's shortage. So, it can be concluded that perfect corporate governance has important meaning to the construction of internal control and itself. From this point, corporate governance and internal control must be connected in theory, and corporate governance must be impended practically.The connection of corporate governance and internal control is not only the essential approach for improving internal control's effect, but also the instrument of improving internal control's efficiency. Indeed, reality makes it possible to realize the connection. Extending internal control's connotation, ulteriorly sorting internal control to governance control, management control and task control; at the point of governance control, combing corporate governance'design and internal control's mechanism can realize their connection in the abstract. From angle of reality, corporate governance can be consummated from aspects of state-owned company's equity structure, directorate, supervision , restriction mechanism et al. Reform of state-owned company's equity structure can be actualized through receding shareholder's equity and developing extensive investment institution. Directorate's core status should be established in internal control. In traditional opinion, internal control is CEO's duty. This paper agrees that governance control is the uppermost level of internal control, proving insurance for directorate's core status from the point of corporate governance mechanism is helpful for governance's effect. It is because that directorate is the bridge linking shareholder and manager, which provides rational guarantee for the contract between them. Establishing directorate's core status needs to impending its construction mechanism, mutilating shareholder's relation with manager, reinforcing professional committees, intensifying directorate's risk management duty, consummating independent director system. Exerting supervision committee's effect on internal control, it needs to impending its constitutes, innovating its duty, reinforcing its responsibility. Establishing reverse restriction system from top to bottom, is not only the inevitable choice of internal control, but also its original idea.The significance of this paper, by analyzing corporate governance's Problem and its effect on internalcontrol, is putting forward material measures so as to perfect corporate governance of Chinese company, its conclusion has definite directing value to corporate governance's reform and internal control's perfect in Chinese state-owned companies.