Research On The Internal Control Of Dalian Newtouch Company

After experiencing kinds of crisis, all the enterprises have realized theimportance of internal controls for the stabilization of the company by the influenceof global financial crisis and along with China joined the WTO and increasing ofglobalization. Setting up a completed internal controls system is the most effectiveway for strengthening management, guaranteeing financial information’s trueness,keeping property safe and complete, keeping away risks of operation, increasing theeffectiveness of management and operation and achieving enterprise strategy.Along with enhancing usefulness of internet and the advent of new technologyand new model, the software industry has been developing rapidly. Accordingly tonsof middle and small-sized enterprises has sprung up. These middle and small-sizedenterprises were successful in their first stages. But when they came to the growingperiod, they have met the bottleneck. Many enterprises closed down. There are tworeasons that restricted these enterprises: one is external environment.The other one isinternal environment. First of all, these software enterprises preferred technicalservices and put less effort on developing products. That’s why they are lack of corecompetitiveness. Secondly, they are lack of abilities of internal management and riskawareness. Also they are weak in internal controls and keeping capable person, ect.For the developments of these middle and small-sized enterprises, besides creating agood external environment, they also need to improve their own abilities ofdeveloping new products and setting up a complete internal control system and abilityof internal management.The existing problems in internal controls are the object of this paper. Caseanalysis method and document analysis method were used in process of researching.Software industry risk were taken as the business background. In the frame of COSOinternal controls,as the theory of internal controls five elements, the standard of<Internal Control Standards> and <Guidelines of Internal Controls>,by examining the status of internal control, the existing problems were diagnosed. The causes of theseproblems were deeply analyzed. Meanwhile, advices on establishing and completingthe internal controls for Da Lian New Touch Company have been a huge support forimproving management ability and effectiveness. This paper has four chapters. Thefirst chapter is the introduction. It introduces the research background,significance,methods and contents.In the beginning of chapter two, the currentdeveloping situation was introduced briefly. This was taken as the background of DaLian Newtouch Company. Then I elaborated the current situation of internal controlsin Da Lian Newtouch Company. At the end of chapter two I analyzed problems andpotential menace in the aspects of the five elements: the control environment,controlactivity,information and communication,risk assessment and internal supervision.Analysis of the existing problem in Da Lian Newtouch Company from aspects of lackof risk consciousness, lack of independent internal control organization and system,lack of internal control process were elaborated in Chapter three.Chapter four statesfour methods for optimizing internal controls in four aspects. First by educating riskculture,enhancing internal communication of risk management and knowing benefitsof risk management help managers to realize the importance of risk management.Secondly, by establishing internal controls department and internal audit departmentset up an independent internal control department. Thirdly, by establishing andcompleting internal controls environment standard and process, internal controlsactivity standard and process,risk assessment and alert system,internal controlssupervision system and internal communication system complete internal process andsystem and establish internal controls evaluation and mechanism of rewarding andpunishments. At the end of the paper is the summary and high-light. I summarized theresults of the research briefly.