Research On The Internal Control Of Guarantee Company

Guarantee companies, as emerging non-bank financial entities under theinternational economic development, are recognized as a high-risk industry. It has afar-reaching impact on social and economic development, as well as small and mediumenterprises financing. However, in recent years, the occurrence of a series of eventssuch as “Zhong Dan”,“Hua Ding” and “Chuang Fu”, caused a negative influence to thenormal development of guarantee companies, concerning people with internal control ofcompanies. The internal control research of Guarantee companies, which can be seen asa special type of financial entities, is order to find ways to enhance the internal controlstructure and optimize the assessment of the effect, further, to contribute to the sustainedand healthy development of the guarantee companies and the whole security industry.This paper focused on the internal control of guarantee companies, on the basis ofabsorbing domestic and foreign internal control theories and experiences, trying to finda suitable framework for the development of these companies in China. Firstly, itintroduced the three modes of operation of the existing guarantee companies, combinedwith the development, characteristics and social contributions on the companies, it alsoanalyzed the problems of our guarantee companies’ internal control. Secondly, itintroduced the principles and objectives of guarantee companies’ internal control, tryingto set up a basic and suitable framework. Finally, it discussed the implementation andevaluation system of the framework of guarantee companies’ internal control.This paper argues that internal control is an effective means to achieve thesustained and healthy development of guarantee companies. Management governance,guarantee business control and risk prevention are the core of the guarantee companies’internal control, the built of the implementation and evaluation system also havesignificant importance. At the same time, the paper pointed out that the study of internalcontrol must be based on the guarantee company in China. The improvement of theinternal control environment is a fundamental factor, especially the construction of theinternal control system.