How To Perfect Enterprises' Internal Control

The internal controls is to form a series of methods, measures, procedures that has a controlling function, given standardization and systematization, and to make a close and entire system. According to different purposes, the internal control can be classified as accounting control and management control. The accounting control is a controlling that protect the property safety, accounting information and legitimacy; management control is a controlling that ensuring the implementing of management principles, and the realization of operations objectives. The accounting control and management control are not mutual repulsion, and some measures are able to be used for both of the accounting control and management control.The internal control system is the outcome of society economic growth arrives at certain stage, and it is an important modern business administration means. The target of the internal controls is to ensure assets security, reliability of economic information and the financial reports, efficiency and effect of business operations. Nowadays, in the society with developed IT industry, the unceasingly improvement of the internal controls system has an active significance to the regeneration of capital, preventing fraudulent practices and cutting down loss. It's main effect: firstly, to help realizing management principles and the targets; secondly, to protect various assets being safe and entire, and to prevent assets from running off;thirdly, to guarantee the authenticity and completeness of business information and financial accounting data, and to ensure the legitimacy of inner financing activities.Good internal control may achieve the aforementioned objectives, however, it has no way to remove its inherent limitations. Also, these limitations must be clearly understood and to take precautions against. The main limitations are: (1) cost and benefit principle limitation; (2) there are clerks with different responsibilities who are ignoring the control procedures, making judgment mistakes, mutually ganging up, and even being in collusion with each other to cheat and so on. Sometimes this will lead to the internal control dysfunction; (3) the management abuses self's position, goes beyond the control and so on. This paper analyzes the above situations, and hopes to improve the enterprises operation.There are 4 chapters besides the introduction in this paper.The first chapters: theoretic research on internal control. This chapter sets forth the fundamental theory of internal control. First, the author has looked back the developing course of internal control theory abroad, including the developing process of internal control system, internal control structure and so on. Then carries out the definition and concept of the internal controls on the basis; afterwards, this paper discusses the development of internal control theory in China since the1990's. The government has promulgated and revised a series of laws and statutes, requiring that enterprise builds the corresponding internal managing and controlling system. These laws and statutes have driven the development of internal control in our country.Second chapter is about the significance and current problems of internal control, and introduces the motivation of writing. Through the analysis on the necessity of building the internal control system, this chapter points out that the internal control has various problem at present, according to these problems, and points out the necessity of reinforcing and the internal control in our country. Third chapter is the designing of internal control. This chapter introduces the principles and some difficult points of the internal control designing process. Based on the SOX act of USA, this chapter concludes some problems should be pay attention to, and establish a basis for the following chapters.Fourth chapter is about the countermeasures and suggestions to perfect the internal control in enterprises. The author believes that in order to change the weak situation of internal control in enterprises, we must persist in optimizing internal control environment; perfecting corporate governance structure; controlling the main behavior body "people"; building and perfecting the internal auditing system; implementing letter of authorization; reinforcing the basic accounting work standards and so on. The paper finally points out that we must insist on people-oriented improvement.