Corporation Internal Control Issues

This article survey the overall existing internal control theory compendiously by the criterion research method, construct a general framework for internal control of enterprise groups by combine utilizing related theories in institutional economics, property rights economics and information economics, and discuss this framework's actual function in practice.Based on the domestic researches on internal control, Their researches are mainly concentrated on the following two aspects:l, introducing and evaluating overseas study achievements and their enlightening and reference meanings to internal control study in China; 2, researches on internal control aiming at domestic corporation's practice, and most of these researches are carried out from accounting and audit aspects at present.At present there are obviously some inadequacies in enterprise internal control stipulations and in actual practice in China. mainly: 1, Cognition from enterprise's top level on internal control is not enough, 2, Company's governing structure is not consummate, internal control is hard to get correct position; 3, Internal supervision is weak, independency and supervision ability of internal audit department are not satisfying; 4, Cultural construction of enterprise is frail, cannot form a common value of staff; 5, Lack of risk consciousness, overlook risk control; 6, New problems encountered in network environment.COSO reports have become the internal control criterion among the global scope. which " Internal control—solid frame " , published in 1992, "Integrated Framework for Corporation's Risk Management" was published in 2004, Enterprise risk management is divided into internal environment, goal setup, affair identification, risk assessment, risk reaction, control activity, information and communication, supervision these eight related factors, each factor penetrates into the enterprise management process.There is institution condition for the application of COSO framework, if a domestic enterprise wants to construct internal control system by referring COSO framework, it must put an eye on enterprise particularity in China, and cannot simply copy or duplicate methods in COSO framework.For internal control of group companied in China, this paper firstly analyze its' characteristics, then the author of this paper thinks that framework factors of enterprise group internal control should include: internal environment, capital control, information control, risk control, and supervision. Thirdly, this paper discusses the relationship between company governing finance management and risk management and internal control in detailAs an aspect of internal control, internal control in a group company must be effectively linked with company structure, so to solve control and incentive issues of the enterprise topmost administration level. It includes: Improve functions and setup of board of administrators. Intensify the supervision function of the board of supervisors. Establish effective incentive and restrictive mechanism.The basic connotation of finance risk management that gives priority to internal control is consummating internal accounting supervision control system, to reinforce enterprise production operation and internal control process management by a "four unification" risk management mode as unified assignment management, unified process management, unified accounting system control and unified internal audit system. It construct the group's risk management control system by "goal setup, affair identification, risk assessment, risk countermeasure" these four factors and the group company's characteristics on management, property right, governing structure.At last, this paper suggests for ameliorating internal control measures of group companies in China. They are: 1.Establish favorable control environmental mechanism; 2. Implement alerting system for major risks; 3. conduct overall assessment on risks, Consummate control activity mechanism, strengthen process control of financial management and capital circulation; 4. Establish unified information management system, smooth communication channel.; 5. Increase strength on enterprise supervision.