Fannie Mae Case: Inspirations Based On The Control Environment Analysis

Began in the United States by the end of 2006,the sub-loan crisis from the financial industry of the United States spread to the U.S.real economy and further bring disaster to the global economy.Sub-loan crisis slowdown the economic growth of the United States, the European Union and emerging market economies,and accompanied by global inflation. It has a profound effect on the global economic over the next few years.In this process,all the world's five largest investment bank"annihilated".Two housing companies-Fannie Mae and Freddie Mac in the U.S.housing market plays a vital role,take over by the U.S. government in September 7,2008,experienced from nationalization to privatization and to nationalization.Fannie Mae is the nation's largest mortgage company,the world's largest non-bank financial companies,in the sub-loan crisis played a key role,why come to the brink of bankruptcy and take over by the government? In this paper,Fannie Mae believes that internal control deficiencies or failure is an important reason,especially the weak internal control environment.In this paper,the first chapter outlined the Fannie Mae case,the second chapter from Fannie Mae's interest rate risk faced by,lead to Fannie Mae's financial manipulated,and pointed out that an important reason for the crisis of Fannie Mae is the weak internal control environment;thesis in ChapterⅢintroduced the historical development of core elements of internal control"control environment",both international and domestic,the release of the draft guidelines of Five aspects of the control environment in our country, said China's emphasis on Control environment building;papers to ChapterⅦof ChapterⅣ,combined with the four elements of the internal control environment:corporate culture, executive compensation,management philosophy and operating style,the Board functions analysed Fannie Mae's internal control environment,and for the construction of China's internal reference;thesis of ChapterⅧof the combination of Fannie Mae case,and China's Ministry of Finance has just issued a number of control environment application guidelines,proposed some of our inspiration,including the building of enterprise culture,to enhance and strengthen the incentives and oversight executives as equally important,the board of directors to establish a sound system.