Research On The Internal Control Effectiveness Evaluation And Improvement Of No.513 Institute Of China Academy Of Space Technology

Chinese government started the official launch of applied research institutes transformed into hi-tech enterprises in 1999. Since then, Chinese science and technology system has entered a new stage of development. After the reform, these science and technology enterprises have got sufficient operational independence, and ushered in more development opportunities as well as facing intense competition and challenges in more open market. Under such economic situation, relying solely on internal control over financial reporting has been difficult to meet the needs of enterprise management. No.513 institute of China Academy of Space Technology (CAST) is not only as a force of the national defense weapons and equipment development, but also a member of the enterprise restructuring. So it also faces the challenge of how to strengthen the internal management, to advantages its research strengths, and to build the core competitiveness. Therefore, we must build the appropriate internal control system to meet the needs of modern business management system. Also, we have to evaluate the system effectively, in order to promote the healthy long-term development of No.513 institute.Firstly, the paper proposed the background, discussed the status of international research briefly and made some comments, finding out the deficiencies and the focal point that it should focus on the study, defining the concepts of internal control evaluation of No.513 institute and introducing the relevant basic theory. Secondly, after introducing the basic situation of No.513 institute and its internal control system background in details, it established the internal control effectiveness evaluation indicator system from the control environment, risk assessment and processing, control activities, information and communication, and supervision of No.513 institute. The indicator system consists of five-level indicators, 11 indicators and 41 secondary indicators, making a comprehensive and systematic description of the internal control system of No.513 institute. Then, using multi-stage generalized fuzzy comprehensive evaluation method to evaluate the internal control efficiency of No.513 institute, in accordance with establishing evaluation factors and object set, determining the weight of each evaluation index coefficient by the set of analytic hierarchy process, determining the indicators of reviews sets and fuzzy comprehensive evaluation in the calculation for the internal control effectiveness of No.513 institute during 2003 to 2008 years. Evaluation results show that the effectiveness of internal controls were at the alert level in the year of 2003, in a better level in the year of 2004, 2005 and 2006 and in an excellent level in the year of 2007 and 2008. It showes that, in recent years, the effectiveness of internal controls is in their ascent trends, which is basically in line with the actual situation of internal control of No.513 institute.Finally, the paper focused on the deficiencies of the internal control in No.513 institute, giving corresponding policy measures for improvement by discussing the constituent elements of internal control. The results of this study are helpful to upgrade the performance of the internal control of No.513 institute, and it is effective to play a guiding role in promoting other space research institutes.