Research About Internal Control Based On Corporate Governance

With China’s rapid economic development in recent years, some enterprises got a rapid expansion of their business scale. However, there’re various problems in those enterprises such as false accounting information, low operational efficiency, even false earning reports and other incidents happened quite frequently just because the management measures can not meet the needs of the further development of enterprises. More and more financial scandal emerging in domestic and international capital market such as "Guangxia", "Delong line" financial fraud, the Enron bankruptcy, WorldCom accounting scandal Although there are various of reasons but one thing is the same,that is the completeness, rigor, and careful of their internal control system are more or less vulnerable. The deep reason of this failure is that these companies lack the sound, consummate corporate governance. The paper analyses the construction of the internal system from the perspective of corporate governance, mainly consists of five parts.The first part is an introduction, describes the research background, significance. easily described a simple idea and the overall framework of this paper.The second part of the paper is literature review, introduces the theory of corporate governance and internal control.The third part mainly introduced the theory of corporate governance and internal control. Explained in detail of the corporate governance theory such as the separate theory in two rights, the classical stewardship theory, the agency theory, the stewardship theory and modern stakeholder theory. Then describes the five stages of the development of internal control. Finally, analyses the ties and the differences between the corporate governance and internal control from the views of their origin, goals, and methods, etc. Shows that from the perspective of corporate governance, internal control system of construction will help to establish modern enterprise system.The fourth part describes the status of corporate governance and internal control of listed companies. Due to historical reasons, our ownership structure of listed companies is irrational, the state-owned shares "dominance",lack of independence of the board, the supervisors is imperfect, the lack of effective incentive and so on, governance is not optimistic. In the internal control system, there is weak internal control environment, inadequate execution, limited control measures, and lack of supervision and evaluation system. From several aspects of the corporate governance impact on internal control, and some sound advice.Part V proposed a point of view of the idea of the construction of the internal system based on the analysis above, take the construction of luzhoulaoJiao as an example. Consider the internal control system design from the corporate governance both in corporate level and operational aspect. Then point out in order to ensure the effective operation of internal control system there must be the appropriate inspection, oversight bodies and the measures, and improve the incentive mechanism as security constraints.Coincides with the Ministry of Finance has issued the "basic norms of internal control" and other policies, how to enhance their own competitive abilities effectively is the question that various enterprise groups faces today. The improvement of the effective internal control is one of these ability effective ways. This paper studies internal control from the perspective of corporate governance to seek the best suits to our enterprise groups.