Building Group, The Company's Financial Control System

This thesis redefined the conception of "financial control". It also put forward the tasks of financial control in conglomerates, as the conclusion of detailed analysis of essential characteristics of conglomerates and the present situations of financial control in domestic conglomerates. The author also expounded the question ---- "how to establish a financial control system in a conglomerate?", on which he focused on three main aspects: regulation control,capital control and audit control.Regulation control is the basis of establishment of financial control system in conglomerates. Conglomerates shall principally set up and carry out a "CFO appointment institution", in order to cast direct supervisions on financial management of all subsidiary corporations. Second, conglomerates shall set up an accounting information management system, in order to ensure the quality of interior financial information. Third, conglomerates shall set up and continuously perfect its budget management system, as to deal with the tasks of spurring up and control of those executors of all subsidiaries. Further more, conglomerates shall also set up a proper profit distribution management system according to the relative laws and regulations, which also conforms to the will of its share-held corporation(s). It shows that, only when a set of integrated financial systems are established for both the parents and the subsidiaries to follow, will effective financial control in conglomerates be really realized.Capital control is the key to the establishment of financial control system in conglomerates. Conglomerates shall firstly strictly regulate the opening and closing of bank accounts in all subsidiaries. That is to help the share-held corporations keep in hand an effective control on all operations of all accounts. Secondly, to realize that, they still need to choose a proper mode according to its own special characteristics. Thirdly, they shall cast a strict supervision on both cash budget and management under authorizations. In line with that, a suitable authorization system and a capital transfer approval system are also in need. Thus, the only way to implement control on capital and cost is to make out clear and concrete stipulations on authorities to transfer capital, to which all level interior managers of the conglomerates, in both parents and subsidiaries, are bonded.Audit control is the final "Great Wall", or rather, the final defense line of financial control in conglomerates, which is the most comprehensive one. Conglomerates shall: firstly set up proper interior auditing structures, secondly clearly stipulate their tasks and responsibilities, thirdly coordinate the relationships between auditing committees and relatively involved persons. All these shall be done according to the scale and characteristics of certain conglomerates, and under the following principles : being independent,authorized ,systematic and economic. To fulfill the purposes of audit control, specific extend and concepts of the auditing structures are also to be stipulated...