Internal Control System Evaluation And Optimization Study

The frequent occurrences of accounting fraud, in domestic as well as in overseas companies in recent years, have aroused the global concern to the issue of internal control. The capital markets and monitoring departments worldwide have once again realized that the serious catastrophe and loss to the society, economy and governments might be brought by the inefficiency of internal control, which leads to the trend of review on the system of internal control. The construction of internal control system has been generally adopted by enterprises to cope with the increasingly fierce competition in markets, be vigilant to and control risk and realize the strategic objective. It has become an important project of research as for how to cope with the problems of internal control, how to coordinate the relation between the internal control, enterprise management, information disclose and internal auditing.This article, based on summarization of theory and practice of internal control worldwide, researches on the internal control system of Company M. It evaluates on the current system of internal control, analyzes on the existing problems and come up with the measures of improvement, with the purpose to further improve the internal control system, reduce the risk and optimize the management system and improve the management efficiency of Company M. The article also provides reference for other enterprises with the same problems.The article consists of five parts. The first part mainly introduces the background, purpose and content of the paper writing. The second part deals with the theory development, concept, objective and method of internal control. The third part introduces the internal control of Company M, analyzing and evaluating on the eight business procedures ranging from sales receivable, purchase payment, stock management, capital, cost and expenses, investment and loaning, project to fixed capital. The forth part comes up with the measurement to intensify and optimize the internal control system from the aspects of improving control environment, strengthening the system maintenance and building up management methods. The fifth part puts forward suggestion on optimizing internal control of Chinese companies, among them are support from top management, construction of manageable internal control system, better enforcement through the information system and efficient monitoring system.