On The Internal Control Framework Design

The newly revised edition of the Accounting Law emphasizes issues concerning the internal control and construction of enterprises. To some extent, the businesses collapse, the distortion of accounting information, and the illegal operation of an enterprise often result from the defection and inefficiency of an enterprise's internal control mechanisms. It is one of pressing subjects, therefore, to study the theory and practice of an enterprise's internal control.Using the latest international theories on an enterprise's internal control as a prologue, this paper probes into the principles, methods and steps to establish internal control systems as well as issues to pay attention to. Aiming to provide a helpful framework for designing for an enterprise's internal control system, it mostly discusses the framework design of the internal control systems of China's enterprises based on such factors as control environment, risk appraisal, control activity, information and communication, and monitoring. It also involves in the systematic design for internal control systems for an enterprise's core businesses and has analysis of specific cases.