A Study On The Internal Control System Of Chinese Listed Company

With the gradual deepening of economic globalization, competition has become even more intensive. Risks what enterprises are facing become diversified and complex trend. In recent years, accounting fraud and out-of-control of the enterprise leads to bankruptcy, investors lose their confidence and social public begin to pay more attention to internal control. Internal control plays more and more important part in enterprise management. Internal control can improve viability of enterprises and competitive power. It is advantage to deal with risks and achieve business goals. The United States is the birthplace of modern internal control. Results of internal control are more advanced. Therefore, it is significant for us to perfect the internal control of China by analyzing and learning the results of internal control from the United States.The Ministry of Finance with the Securities and Futures Commission, the Audit Commission, the China Banking Regulatory Commission, China Insurance Regulatory Commission issued the "basic norms of internal control" on May 22, 2008. The specification will be carried out in listed companies on July 1, 2009. The framework is the basis of Chinese internal control.In this paper, recognizing the lack of internal control of Chinese enterprises, the article analyses the internal control framework of the United States, such as the COSO report, SOX Act, ERM reports, and compares the internal control of China with American's. Finally, the article sums up the enlightenment about building the internal control of listed companies in China. First, in the part of goal-setting aspects, we should be based on the shareholding structure of China's highly concentrated and a conflict of interest between the controlling shareholder and minority shareholders. We should add an important goal to protect the interests of minority shareholders; Second, in the part of the disclosure in internal control, the self-evaluation report of the internal control should be disclosed compulsively and the audit report of internal control self-evaluation that issued by the CPA should be combine with compulsory disclosure and voluntary disclosure; Third, in the part of evaluation of internal control, this paper describes the internal control self-assessment procedures and evaluation criteria, which changes the passive position, mobilizes the enthusiasm and enhances awareness of internal control. The method is a trend and have achieved remarkable in the West. The innovation of this article is that it compares the difference between the internal control framework of china and US. The article considers that the United States share is highly decentralized. In the case, the internal control of American is not suited to the feature that Chinese stake characteristics is concentrated. The article increases some elements of evaluation in the evaluation of standards which based on protecting the interests of minority shareholders, such as the existence of company rules and regulations embodied in the protection of the terms of the interests of minority shareholders, major shareholders or appointed as a senior management staff, the amount of remuneration for managers at the scale of the level of the industry, whether the dividend distribution plan takes into account the views of minority shareholders and other evaluation factors.