Research About The Internal Control Of Rural Credit Cooperative In China

Rural Credit Cooperative is the important part in China's finacial system, and also is the key organizational form of cooperative finance. Rural Credit Cooperative plays an active role in promoting the development of agriculture and rural economy, in increasing the revenue of farmers. But because of the inappropriate management, ambiguous property right and unsound corporative governing structure, the construction of the internal control system in Rural Credit Cooperative is far below the development of business growth, and brings great hidden hazards in the healthful development. The reasons that the Rural Credit Cooperative has encountered so many difficulties are vairous, but as for Rural Credit Cooperative itself, the relaxed internal control is one of the important reason.After ten years of development, the construction of the internal control system in Rural Credit Cooperative has progressed dramatically,but the internal control system in Rural Credit Cooperative is still far from perfect , and has obvious defeats in establishing and performing of the internal control regulation and can not control risk. effectively. In China, the research on Rural Credit Cooperative has once focused on the property, governing structure and bad credit, though some research concerning the internal control has been pursued , the discussion has not been assembly and deeply held .As a sort of self-discipline behavior relating to finiacial institution , internal control is defined as a series of methods, measures and procedures enacted and implemented by Rural Credit Cooperative and performed a function of control for the aim of completing the decided target of management, which covers various business activities and involves the internal organization of all levels, each function department and clerks. Establishing and improving the internal control of Rural Credit Cooperatives continuously is required as a part of the special management object and mode of Rural Credit Cooperatives , it is not only to guarantee the microeconomic unit and market system normally and orderly circulating, but also is the postulate that national economy keep on moderating to develop.Considering the actual situations, referring to the theory of financial industry internal control in China and that of the Barcel Banking Committee, in comparison with the occidental banking practice ,the dissertation analyses the theory and practice of the internal control in Rural Credit Cooperative deeply, puts forward some opinions and uggestions ,which can bring referential function on the research and construction of internal control in Rural Credit Cooperative. After implementing a systemic research on various problems , it comes to the conclusion that effective internal control system is both an indispensable part of banking management and a guarantee of banks' safety and well performance, which are helpful of making assurance of the realization of management targets. Based on the above understanding, this dissertation attempts to designate an integrated and effective internal control system of commercial banking after taking lessons of commercial banks in marketing economies, as well as the guidelines set by the People's Bank of China-the central bank of China, into consideration. The internal control framework presented in this paper is designed from the perspectives of control environment, risk assessment, control activity, information and communication, and supervision and evaluation, and is effective to react to changing conditions, and to approach the best target of internal control which enable the goal of management.