Internal Control Based On The Study Of Related Transactions

The Enron Event in US and the Yin Guang Sha Event in China bring negative influence to national economy. The events not only result in loss to companies themselves, but also challenge the economic system and the market mechanism. The company fails bring chain reaction to the weak and sensitive market mechanism, especially to the fund disposition mechanism in the capital market. If the fund disposition mechanism is out of order, the enterprises will not be able to exist or develop successfully, which may bring negative influence to the stability of the nations, prosperity of economy and development of the peoples.All business enterprises that bring huge shock and loss are all spoiled son of times before closedown. Investigating the reasons, all the failed enterprises deviate from particular laws of their certain industry in the special social stage-they are defeated by themselves. The enterprises and other organizations should establish a normalized system suited to the corporate environment and the enterprises themselves to keep on stabilizing development, which construct a solid base for investors' benefits and social stability and prosperity. For the society, investors, regulators and especially business enterprises themselves, it is important and urgent to establish an internal risk control mechanism and system to form a scientific risk firewall.A series of accountancy concocts affairs were exposed along with related transactions, which seemed to have lost the positive function on managing surplus of an enterprise. Consequently, how to carry on related transactions correctly and accurate information publication, become the public responsibility of listed companies. Currently in China, related transactions are under exterior supervision from four aspects, tax system, laws of securities market, accounting standards and audit standards. Different aspects imply different goals and emphasized contents on supervision. However, considering the limitation of exterior supervision regulations on restraining unfair related transactions, the business enterprises should exert themselves to put related transactions under interior control, to make the related transactions fair radically. As an important transaction behavior, related transaction is also one of control behaviors of limited companies. Basing on accounting standards and correlative laws and regulations, this paper analyzes the interior control on related transactions of Beijing Shougang Company Limited for other business enterprises' information. As the interior control theories develop continuously in China, the practical experience of the business enterprise should make the theories become perfect step by step.