Analysis Of Internal Control Environment Under The ERM Framework

From the coming of the 21 century, a series of domestic and foreign enterprises fraud cases appeared. The corrupt object is extensioning gradually from accounting information to other businesses management at all levels. This phenomenon attracted the attention of people to the enterprise's internal control system, particular the environment of the internal control system. The internal control is an important content that modern business enterprise management. The internal control is the intrinsic mechanism which the enterprise oneself adjustments and voluntarily restricts. Internal control environment is the basis of internal control. Therefore, the author thinks the key reason which cause internal control expired is internal environment imperfect. Based on this concerning, how to enhance internal control environment construction is the focus too. COSO committee promulgated the" enterprise risk management framework report",which is the latest report on internal control in 2004,this article is based on the report.Firstly, this article review the theory and analysis of internal control both from international and domestic aspects. Then analysis the relationship between the internal control environment and the internal control,and point out the basic role of the internal control environment in the internal control system. Secondly, this article introduced the enterprise risk management, analysis the differences and similarities between the enterprise risk management framework and other framework. Thirdly, the article construct a framework of the internal control environment basic on ERM, and analysis the various factors of the control environment. Finally, make the X corporation as an example, by analysing its strengths and weaknesses, this article proposed some management methods of Chinese enterprises internal control environment.The fourth part of the analysis of the control environment is the key part of the article. When writing this part, we learn from the risk-based audit, we build a model of enterprise risk start with the risk. And then, for the risk mentioned in the model, we forming a risk analysis dictionary by finding the sources of risk. The risk analysis dictionary summarized the initial source of the risks, and on the basis of these initial source, formed the article's basis-factors of control environmental. Then the article constructed the external environment and internal environment framework based on the factors.The innovation of this paper lies on three aspects:Firstly, This article draw the elements of the internal control environment under the ERM framework by "target-activities-risk-elements " ways, it provide a basis for the construction of the internal control environment. It's an improvement compared with the previous.Secondly, This article constructed the internal control environment accordance with the "established order-to ensure the implementation-ensure the target "ideas. This provided a more realistic theoretical support for the Enterprise to use it.Last but not least, this paper introduced the case of X, and through analysing the advantages and disadvantages of X company control environment, proposed some strategies for the construction of the internal control environment management.Insufficient of this article:Firstly, some places of this paper may still exist problems because of the limited of my knowledge.Secondly, because of the use of the standardized writing way, there are not sufficient data support, it may not so convincing.Thirdly, because of the limited of my experience, it may be deviation between the analysis end the actual situation.