Research Of Financial Control Upon The State-owned Enterprise Group Under The Entrusted Agency Theory

With the enlargement of the enterprises, complication of the management, the Pattern of decentralization popularized.To put an enterprise as the core, the property rights as a link, group companies which are formed by a number of business organizations, have emerged one after another.Since the recent economic reforming and open door policy, the national group companies have experienced formation and early development stages, and starts to represent more significant force in the national economic growth.At the mean time, on the basis of the Entrusted Agency Theory, there are imperfect compact, inconsistent target,asymmetric information between trustor and agent. Subsidiary will have Adverse Selection and Moral Hazard.so it need Comprehensive control.However, group enterprises financial control is imperfect. So the lack of financial control management has become not only a theoretical one, but also more of an operational and practical topic, and has strong implication to the group companies.The goal of this essay is that it uses the basic theory of delegating the Power and to analysis financial control.The article advises five measures of financial control, including Institution, Budgetary control systems, Funds control, Performance evaluation and incentive and restraint mechanisms System, Personnel control.Finally, the paper used SINOCHEM group company as an example to illustrate the application and implementation of the above mentioned Principles, and explained in detail about the Process to establish and implement the financial control system in group companies.