Research On The Enterprise Internal Control Based On The Risk Management

In recent years, how to guide enterprises to improve their internal controls and risk managements to deal with the increasingly complex risks has become a hot issue which is discussed in the theoretical and practical field. Since COSO issued the ERM framework in 2004, the foreign enterprise internal control framework which is based on risk management has been gradually improving. However, there is a big gap between China and foreign countries in the aspect of risk management-oriented internal control construction. "Basic Standard for Enterprise Internal Control" which was jointly issued in May 2008 has tended to focus on risk management in the theoretical framework. However, some domestic enterprises engaged in high-risk financial derivatives transactions have suffered big losses in the global financial crisis occurred in 2007, and these cases have exposed that China's enterprise Internal controls and risk management mechanisms are lack or not perfect. All above shows that the enterprises of China still exist many problems in risk management-oriented internal control construction.Using the approaches of normative analysis, case studies and empirical data analysis, this paper makes an active exploration and in-depth study on the enterprises'internal control construction which is based on risk management. Firstly, this paper reviews the internal control and risk management theories and analyzes the relationships between internal control and risk management from the materialist perspective to indicate the developmental tendency that internal control and risk management will finally move towards integration. Secondly, this paper analyzes the existing problems of our country's internal control framework system, including the lack of risk management mechanism, the non-prefect of the internal control systems and so on.Finally, this article puts forward to build the risk management-based enterprise internal control system which is overall guided by the theoretical framework, implemented by the enterprises entities and safeguarded by external supervision mechanisms. On the aspect of theoretical framework, this paper puts forward to the ideal of sticking out the comprehensive risk management and the thinking of introducing a penalty system to strengthen the supervision. On the aspect of risk management-oriented internal control construction, the author suggests that enterprises should pay more attention to the internal control environment, be clear about the strategic targets, improve the risk management system and strengthen the internal audit construction. On the aspect of external supervision, the author thinks that improving the internal control information disclosure is an extremely effective measure for the enterprises in China.