The Design And Implement Of The Internal Control System In Daqing Unicom Company

The Ministry of Finance, Securities and Futures Commission, the Audit Commission, China Banking Regulatory Commission, and China Insurance Regulatory Commission jointly issued the "Basic Norms of Internal Control" (the "Internal Control Standards") on July 1st,2009. The formal implementation of this "internal standards" marks the existence of the unified internal control norms in Chinese enterprises. This is significant in leading Chinese enterprises to survive, develop, and expand in an increasingly complex international financial environment. In particular, it is the 2008 economic crisis we have suffered, in which bankruptcies, financial affairs and as such, demonstrated the importance of improving the business management and anti-risk ability through internal control. But in fact, unreasonable governance structure, interference in management, operational executor abuse, and financial officers and managers fraud are very difficult to be avoided in some domestic listed companies. For lack of rigid company rules and regulations and being ineffective, there is still a distance from meeting the requirements by "internal control norm". Internal control evaluation is at an exploratory stage, and how to keep internal control from the "empty talk" and become the gene to promote a long-term development of enterprises, has become a widespread business concern.China Unicom, as one of the three major carriers in China's telecommunications industry, faced with intense market competition. Enterprises operating should comply with both regulatory requirements of domestic and foreign laws and regulations, but also win in the fierce competition. How to improve management and enhance operating efficiency has been the subject of business thinking. In the early years of this century, China Unicom began internal control, which was employed as a means of risk prevention in order to ensure that companies achieve strategic goals, enhance management efficiency and improve the ability to prevent risky actions. In this setting, this paper further studied internal control in Daqing Unicom, analyzed the situation of the internal control management, and explained the design principle of internal control in Daqing Unicom. Finally, it summed up the implementation of internal control principles of Daqing China Unicom. It is expected to be helpful and enlightened to enterprise managers by introducing the internal control construction experience of Daqing Unicom.Introduction of this article introduces the research background, purpose, significance and research methods and framework.Literature review introduces the basic theories of internal control and its development. In this chapter, the development of the connotations of internal control and relevant theories has been introduced. The concept of internal control widely used in modern times has been defined by COSO Committee of the United States in 1992.By which states:internal control is to rely on the organizational board of directors, management, and other staff to achieve. The process of achieving is a reasonable guarantee:the effect and efficiency of operations, financial reporting credibility, on the compliance of laws and regulations. Historically, the internal control theory has led to five stages—the "internal check", "internal control system", "internal control structure", "the overall internal control framework", and "risk management". Through an overview of these five stages, the development of internal control theory can be understood.The analysis of the present situation of internal control in Daqing Unicom covers the following aspects. First of all, the overall situation in Daqing Unicom has been introduced. Second, the internal control and management of Daqing Unicom were reviewed and deficiency in internal control has been analyzed thoroughly. Management of internal control in Daqing Unicom:(1) Senior management is more emphasis on internal controls. (2) Daqing Unicom established system of internal control standards. This in-depth analysis of the construction of internal control deficiencies in Daqing China Unicorn's are reflected in:(1) the quality deficiencies of internal control staff in some sectors (2) the lack of sufficient awareness of risk control (3) the need to improve risk identification, assessment and management. (4) the need to strengthen information and communication work. Finally, in this chapter, some measures to be taken for Daqing China Unicom to strengthen internal controls were provided. These measures include:(1) Enhance awareness of risk prevention and pay attention to the control culture. (2) Focus on risk assessment. (3) Strengthen internal supervision and play a role in internal control.Description of Daqing Unicom control system design is:The first section describes the design of Daqing Unicom and the principles of the internal control system. The basic principles of internal control refer to the rules and basic principles that must be followed when design of enterprise internal control framework are established,which Includes the principle of legality, comprehensive and systematic principle, the principle of mutual constraint, the principle of the program orientation, cost-effective, and information feedback principle. The second section describes the design on main risks of internal control in Daqing Unicom. Firstly, it introduced working objectives and guiding principles for the system of internal control in Daqing Unicom. Working principle refers to the responsibility of the professional sector as the the main body of control, which relies on process and system control, create a risk management culture, combine control and efficiency, and control major risks strictly. Then, it introduced the construction of organizational system of internal control in Daqing Unicom. Followed then, establishment of system of internal control in Daqing Unicom was introduced. System is divided into company-wide system and process construction. Finally, internal control and risk management mechanisms in Daqing Unicom have been introduced. Key implementation points of internal control as response to the main risks were introduced in the third section.Daqing Unicom implementation of internal control and risk assessment are reflected in the following aspects:Daqing Unicom strengthened risk management culture through management training, corporate training, and business skills training for part-time internal control and risk management staff, and education to promote awareness of internal controls.By establishing "corporate risk catalog," strengthening control of a significant risk, carrying out risk analysis, perfecting organizational system of risk management, risk management has been promoted effectively. By implementing strictly the internal control norms, updating the control measures, safeguarding the internal control system, risk prevention and control of internal control has been brought to play. Business operations face with the complex and changeable environment within and outside, therefore, it might be stricken by various risks. Daqing Unicom in the process of production and operations must prevent and control the major business risks that will have the serious impact on business, and these risks include legal risk, financial reporting fraud risks and operational risks. Since risk exists, it should be responded. Periodic risk assessments and specific combination of risk assessment methods are conducted in Daqing Unicom. The implementation of specific risk assessment reflects the internal control, risk prevention process and results in Daqing Unicom.Conclusions and suggestions can be found in the last section of this paper:To achieve rapid, sound and sustainable development, Daqing Unicom must establish and maintain effective internal control system to ensure the effective implementation of internal control measures. This study analyzed the situation of internal control in Daqing Unicom, described the principles of the internal control construction and how to establish and improve internal control system. Furthermore, internal control and risk management applications in Daqing Unicom are reflected by the instance of risk assessment and management in this corporation.