Study On The Problems Of The Internal Controls Of Small And Medium-sized Enterprises

As an important strength of national economy in China, Small and medium-sizedenterprises (SMEs) stimulates the market competition, improves efficiency andpromotes economic growth. At the same time, SMEs creates a great portion of jobopportunities, including rural surplus labor. Although SMEs is quite important, theshortage of internal control still has not been sufficiently valued, and even not plannedto be adjusted and improved, which caused many SMEs lack of lasting vitality. On thecontext, the paper will discuss the internal control issues of SMEs in China, withpractical significance.Based on theory analysis method and the traditional research ideas “put forward,analyze and solve problems”, taking company HBDJ as reference, the paper startedresearches on SMEs internal control. In chapter one, the paper firstly expounded thedefinition of SMEs and internal control concept and theory. In Chapter two, the paperdescribed the present situation and existing problems of SMEs. Chapter three focusedon the causes of the problems mentioned above. Chapter four took American SMEsinternal control as an example to study. In the end, put forward series of specificsuggestions on internal control.The paper reckoned the weak internal environment foundation, ineffectivecommunication and shortage of risk evaluation as the severest problems faced bySMEs in China. The paper considered the main reasons caused the SMEs’ internalcontrol problems as follow: outdated company culture, low informatization,nonstandard management system, ineffective internal inspection system and neglectedrisk management function. Based on the analysis, the paper brought the measures tooptimize enterprise internal control: establish reasonable ownership structure,guarantee the position and independence of directors’ board, strengthen the inspectionsectors and establish control system; establish enterprise culture and core value andkeep management under rules; strengthen the financial trainings on executivemanagerial staff, bring in modern information system and experts, and promoteinformatization construction; establish and carry out internal audit; and at last,establish risk control system, carry out risk control trainings, and strengthenrisk-proof awareness and capability.