Based On The Basic Norms Of Internal Control Implementation To Explore And Deepen The Study

Since 1st July 2009, Basic standards on internal control of enterprises (hereinafter the "Basic standards") are to be applied firstly in the listed companies in China. These standards on internal control, which are also called "Chinese Sarbanes Oxley Act", are jointly issued by the Ministry of Finance, Chinese Securities Regulatory Commission, National Audit Office, China Banking Regulatory Commission and China Insurance Regulatory Commission on 28 June 2008. As is required by the Ministry of Finance, large and medium-sized enterprises other than listed companies are also encouraged to apply these standards.Shanghai ABC Hotels Development Co., Ltd. (hereinafter "ABC Company") is a company listed in Shanghai Stock Exchange which needs to meet the requirements of the Basic Standards. ABC Company is the biggest listed company engaged in business of hotels and catering with major businesses of hotel operation, hotel management, food and restaurant, and trading of hotel supplies. By carrying out the developmental strategy of "expanding the business worldwide, establishing a famous brand and letting market decide the performance of its business", ABC Company further enhances its competitive edge in management, brand, network and talents and maintains its leading role in hotel industry.As a result, five mutually related and stimulative elements must be based on to build the internal control framework by ABC Company: control environment as an important foundation; risk assessment as the important process; control activities as an important means; information and communication as a critical criteria; monitoring of control as a critical assurance. ABC Company must also make self-evaluation for the validation of the internal control work and disclose the 2009 self-evaluation report on timely basis. Starting from the theoretical research on the internal control and the Basic Standards and the analysis on the current condition, difficulties and measures of improvement of ABC Company to implement the Basic Standards, the paper aims to illustrate the effort of ABC Company to improve its internal control taking advantage of the implementation of these standards. ABC Company is a listed company engaged in all-around businesses covering hotel operating, hotel management and catering and owns various kinds of operation and investments. Therefore, the paper focus on the analysis on the hotel operation which is the key source of income of ABC Company to clarify the active effort of ABC Company to meet the challenges and opportunities and improve the over-all level of internal control in implementing the Basic Standards.