Research On Internal Control Self-assessment In China Listed Banks

In recent years, the financial fraud cases of Enron and Merck has caused aheavy impact on the international capital market, resulting the introduction of theSarbanes-Oxley Act (SOX). Internal control disclosure became necessary. In thesame time, internal control disclosure has become the academic study hotpot. Thewell-known domestic enterprises such as CITIC Pacific, Guangxia, CAO also caughtin the financial fraud scandals, which completely exposed the weakness of thecompany’s internal control and the lack of the disclosure of the internal information. Italso drive the relevant regulatory agencies and stakeholders into deep thinking. Afterthe introduction of ‘The Basic Norms of The Internal Control’ by the five Ministriesin2008, the supporting guidance were released in April2010, which set up thespecific provisions for the enterprises’ internal control self-assessment and theschedule of the implement of the guidance for the different companies. From now on,the internal control normal system is basically completed, the disclosure of internalcontrol gradually transition from ‘encourage’ to ‘mandatory’. How to issue aneffective internal control self-assessment report which is in accordance with theregulations became a new challenge for the listed companies. At the same time, weshould pay attention to the effectiveness of the implementation of the internal controlevaluation guidelines and verify it.Commercial banks play an important role in China’s financial system, the higherrisk of the bank need a perfect sound internal control system. Improve the internalcontrol system has a special and important significance for the smooth operate andrisk management of the bank. Given the particularity of banking supervision and theavailability of the disclosure information, we select the China’s listed commercialbanks as research perspective. Through statistical analysis of2009–2011internalcontrol self-assessment reports, we identify the existing problems and deficiencies inthe internal control evaluation process, evaluate the effectiveness of the banks’internal control evaluation process after the introduction of the internal controlevaluation guidelines. We put forward reasonable proposals according to the researchresult, enrich the listed commercial banks internal control self assessment theory.