Internal Control System Design Of Corporate Tax Risk

With the world economic structure is undergoing tremendous changes, thecontinuous development of China’s market economy, the system of tax regulationsbecome more perfect, the tax collection measures become more stringent, and thecorporate economic behavior becomes more increasingly complex. The enterprisesare facing business and tax policy changes such as the growing complex internal andexternal environment. As the enterprises are facing the risk of tax having becomeincreasingly evident, the enterprise must be timely to improve enterprise-wide riskmanagement. In fact, tax risk management need penetrate into all aspects of theenterprise, from strategic planning, business decision-making, to small day-to-dayoperations management everywhere need enterprise tax risk management.In China’s economic natural slowdown period.Tax risk as an important risk,enterprises did not pay enough attention to it. Controlling tax risks improperly, maynot only enable enterprises to bear the unnecessary tax burden, but also damage theenterprise reputation, result in losses of the assets of the enterprise, suffer legalsanctions, even lead to corporate bankruptcy. For tax risk, the measures Chineseenterprises adopted are always basically passive, emergency and temporary. Theinternal control system is lack of systematic and institutionalized control measures toresponse to tax risk.Starting from this situation, this paper focuses on the tax risk internal control,overviewing the definition of tax risk and tax risk management and the relationship ofthe risk management and internal control. On the basis of a comprehensive riskmanagement theory, this paper analyzes the present situation and problems of the taxrisk internal control of enterprises, then try to establish the internal control system oftax risk, in order to improve the company’s internal control, form a tax internal riskcontrol manual, and implement the internal risk control of the corporate tax into thedayly work.Firstly, this paper reviews the research of tax risk internal control, and finds that the definition of domestic tax risk, causes and management system are still in theinitial stages, tax risk control measures and measures are not systematic andcomprehensive, comprehensive tax risk management concept has not yet formed.Next this paper defines the relevant concepts, such as tax risk, tax risk management,and tax risk internal controls, make clear of the relationship among risk management,internal control and tax risk and make a brief overview of a comprehensive riskmanagement theory, asymmetric information, opportunism, limited rationalityassumptions. Then through the analysis of the current situation of China’s corporatetax internal risk control, find that in tax risk internal control, China’s enterprises lackof knowledge of the internal control, the institutions and professional tax riskmanagement personnel, a complete specification to control, and the control link lagand so on, and analyze the cause of these existing problems. Thus to solve these issues,this paper design a identification-assessment-control core control system on thebasis of a clear tax risk internal control objectives, design principles, corporate controlenvironment as well as the approach to risk preferences and strategy, hoping to bringbenefits to Internal control practices of corporate tax risk and form a certain degree ofcontrol specification. Finally, make recommendations for the problems in the specificimplementation process which the enterprise may face and forecast the futureresearch.