Internal Control Theory And Control Analysis Of China's Foreign Trade Enterprises

With the rapid progress of globalization and the severe competitive situations we are facing after our country's joining the World Trade Organization, our foreign economic relation and trade enterprises are confronting with new challenges on their way of development. As the dominant power of foreign trade in our country, the current state-owned foreign trade enterprises have problems of low level overall management, inflexible mechanism and low capacity of resisting risks resulted from incomplete internal control system in their development. Only through self-reform and perfection of internal control regulations and system construction, can the core competition capacity of the enterprises be improved.Internal control system is the important method in modern enterprise management, and is an organized program and all methods and measures applied to secure assets and keep the accounting data true and complete. The current internal control theory in the world is COSO report of USA, which divides internal control into control environment, risk evaluation, control actions, information and communication, and supervision, outlining all aspects of internal control activities.Internal control occurred with the establishment of modern enterprise system and the continuous enlargement of enterprises. The state-owned foreign trade enterprises are always multi-businesses, transregional, intensive and internalized in their operation, and must rely on accounting and statistical information to understand detail financial data and put businesses under normal operation. Internal control system is the method for promoting the development of the enterprises and ensuring the legality of accounting settlement and businesses.The establishment of internal control system must be based on the actual situations of the enterprise and focused on the overall business target of the enterprise in order to set up relevant control methods and measures. It must proceed from entirety, hold on the key controlling points, and regulate businesses by process control. Meanwhile, it must make use of the function of internal auditing to take preventive measures. It should keep the internal auditing scientific and secret through evaluation of internalauditing. And it should make use of the supervision function of external auditing.The state-owned foreign trade enterprises have their own characteristics in internal and external control environment and in the current mechanism after tens of years of development. Besides the shortcomings same as those that other state-owned enterprises have such as poor idea of internal control, unreasonable setup of organization, incomplete system and low qualification of managers, they have other shortcomings such as absence of organization control, out-of-control of human resource, backward risk evaluation and management, lax institution management, untrue accounting information, out-of-control of expenditure and less advanced electronic information construction. The major reasons that lead to the problems of internal control of the foreign trade enterprises are incomplete legal person management structure of modern enterprises and unclear rights and liabilities of internal control resulted from separation of management and ownership, qualification of managers of the enterprises, weakening internal supervision mechanism and unsuccessful external independent auditing and supervision producing no pressure to managers, the intrinsic cultural background of the enterprises, the existing organization and functional mechanism and human resource policy. The serious out-of-control of internal control allows the overall management of the enterprises to be conducted in a careless self-management, which might easily lead to illegal operation and lost of effective business resources of the enterprises, and finally lead to risks that the enterprises can not control.Because of the international comprehensive businesses in which the foreign trade enterprises are engaged and of the many years of reform and change of me...