Internal Control Of State-owned Enterprises The Status Quo, Problems And Solutions

The internal control is a topic which the Chinese theorists and pragmatists give more and more concerns in these years. After china joined in the World Trade Organization, the management systems should be established in the corporations which conform to the international requisition, and the foundation of the management systems is to establish the modern internal control system.The state-owned enterprises (SOEs) control national economy life, and affect the direction of Chinese economy development. Therefore the state-owned enterprises internal control innovation and the development is affecting the Chinese all enterprise's future and the destiny. Although China has started to establish the corporate internal control system, and put into effect some control criterions, we have realized the gap between Chinese SOEs and those in developed countries. To shape SOEs' competitive edge and improve their economic efficiency, corporate internal control system should be intensified.This article has introduced the state-owned enterprise's definition and basic characters, and analyses the present situation and the main issues of the state-owned enterprises' internal control system. Related to the present situation of China, the author presented some innovative methods and advanced ideas on the internal control.First, after researching and analyzing the "Internal Control—Integrated Framework" and "Enterprise Risk Management - Integrated Framework", considering the particular characters of the Chinese state-owned enterprise, the author proposed that Chinese state-owned enterprises internal control system and the appraisal standards should be based on the "Internal Control—Integrated Framework" and use for reference "Enterprise Risk Management - Integrated Framework" properly.Then, the thesis analyzes current situation and major issues in implementing internal control: the lack of scientific institutional systems, the property right limits, invalid corporate governance system. Therefore, this thesis draws up concrete action plan and raises some Countermeasures to solve these issues: on one hand, the SOEs can improve the internal control environment by changing the property right structure, optimizing the corporate governance structure, in order to strengthen the foundation of the internal control; on the other hand, the SOEs can enhance the internal control activities through establishing the interior auditing system, improving the promoting mechanism and the personnel management.The thesis contributes to build Chinese SOEs'effective management system and promote smooth internal control.