Study On The Design And Implementation Of Internal Control Of Enterprises On Cost-benefit Principle

Internal control is an indispensable topic in the context of management of modern enterprises. Sound and effective internal control plays a very important role in the short-term balance and long-term development of enterprises. How to design an effective internal control system without waste of resources should be attached great importance to by management.This paper analyzes the problems in internal control through study on and analysis of an American public listed Corporation, combined with the hands-on experience, the implementation of the Sarbanes-Oxley Act in particular, providing guidance for the modern enterprise on strengthening internal control in the light of cost-benefit.This paper is divided into six sections:The first section is the introduction, mainly discussing the background of the study, namely Sarbanes-Oxley Act passed by the Congress of United States after Enron event, which sets up strict requirements for American public listed companies and has far-reaching impact. The second section is the theory and literature review of internal control, starting from the beginning of internal control, pointing out the construction of generally accepted framework for internal control system, and finding out internal control modes fitting in specific circumstances of enterprises through theoretical study on cost-benefit principle. The third to the fourth sections take AB company as the example, through deep understanding of and study on the key internal controls, and discussion on the philosophy of the design of internal control of American public companies, and figure out the unreasonable parts of internal control, and then put forward suggestions for improvement, while figure out better designs of internal control on cost-benefit principle using simulation. The fifth to sixth section comes up with some implication for the design and implementation of design of internal control of modern enterprises based on the summary of the sections above.