Research On How To Improve X Power Company’s Internal Control

In2002, with "electric power system reform scheme" coming out, electric power system reform started. This year is the11th year since then. Electricity power industry is technology-intensive, capital-intensive, management-intensive and high risk industry. The reform and development in these years has promoted cross-regional electricity supply and settlement with the diversification of business, operational risks emerging more frequently and the continuous rise of management costs. There are significant differences between power industry and others in terms of product characteristics, daily operations, energy saving and environmental protections, sales models. The power industry is directly related to national energy security and economic survival. It is a part of the social public utilities and directly supervised by the regulations of the state and industry. In terms of the control system of the current electric power enterprises, there are a lot of obvious weak points. For example, the enterprises can not establish sound internal control systems; internal control system can not meet the needs of enterprise management; enterprise have not strictly followed the principle of separation of incompatible duties in the setting of the division of labor, which leads to the insufficiency of internal control; the enterprise internal control awareness in employees’mind is not strong, which causes them to carry out it passively; internal control system although has been established, but not strictly enforced, so that internal system is gradually out of control. These internal control weaknesses have increased business risks, which is bad for the promotion of business management and the achievement of the corporation strategic objectives. Therefore in order to prevent risks and promote the level of internal administrative control to adapt to the new circumstances and environments, power enterprises must set up a perfect, strict internal control system, which is in accordance with the industry’s own development characteristics. Based on the above background, this paper undertakes research in the intension and development of internal control. Taking the X electric power company as an example, we try to analyze the internal control internal of X electric power company in comparison with COSO internal control framework. So we can find out the reason of internal control vulnerabilities to propose the improvement measures. To some extent the results of this research are meaningful to promote the construction of internal control system in state-owned power enterprises.This paper is divided into six parts, and the main contents of each part are as follows:Part One. Starting from the background introduction, we put forward the research significance, ideas, methods, the overall framework, the innovations and deficiencies.Part Two. Summarize the foreign and domestic representative views of internal control theory in order to define the research limitations and further research.Part Three. Analyze the five stages of the development of foreign internal control system theory,domestic internal control system building and five elements of domestic internal contralto construct the theoretical basis of this paper.Part Four. Based on the five elements of internal control, we begin to do case analysis to X electric power company in which we elaborate the basic methods of X company’s internal control at the present stage, in order to find out the operating results and analyze the reasons.Part Five. Based on case analysis, we put forward the improvement measures of internal control.Part Six. Summarize the main conclusions and point out the limitations and future research directions.The innovation of this paper lies in taking the X electric power company as an example. We find out the internal control vulnerabilities in enterprise level and operational level through field investigation and put forward the improvement measures. The shortage of this article is that although we have certain understanding in the basic method of X electric power company’s internal control the theory through on-the-spot investigation, we remains to be far from perfection because the content of the internal control operation flow is too much in combination with the lack of time and knowledge.