The Reconstruction Of Internal Control System Of Central Corporation Groups

Since system of internal control norms of China was issued and executed, thework of construction of internal control system for corporation group have beencarried out in all the listed company. Because of recent progress of merger andacquisition, central enterprises’ risk control issues have been increasingly concerned.There is a significant increase in the importance and necessity of improving internalcontrol system, promoting the ability to manage and operate and enhancing theefficiency and effectiveness of the use of state-owned capital. So, recently, the workof construction and improvement of internal control system have been started incentral enterprises. In this paper, a case study approach was used to study thereconstruction of internal control system for D central corporation group. This papermainly introduced the background and specific process of the reconstruction of Dgroup which is finished according to the national regulatory requirements, detailedinterpreted and analyzed the internal control manual made by group D based oninternal control relevant theories and systems of internal control norms, Summarizedthe advantages, limitations and operability of the internal control system after itsreconstruction, and prospected the effects of the reconstructed system.The reconstruction of internal control system was on the basis of the internalcontrol norms system of China and could be divided into seven main stages. The firststage is to carry out internal control knowledge training and to work for arrangement.The second stage is to comprehensive comb to improve the existing managementsystem. The third stage is for Carding and improvement from the company’sheadquarters level. The fourth stage is to Card and improve from the branch andsubsidiary level. The fifth stage is to hire consulting firm for internal control systemdiagnosis. The sixth stage is to amend and improve the management system. The laststage is to compile the internal control manual.D Group Internal Control Manual constituted by nine parts in two levels. One is strategic level prepared by the company headquarters which focused on decision andmanagement. Including: basic framework of internal controls and business processestwo parts. The other level is operating level finished by branches which is more focuson the daily production operations and mainly consists of seven subsidiary branches.According to analysis of the effectiveness of reconstruction, the reconstructedinternal control system of Group D is based on the company’s business processes andfeatures. Such a system of internal control can match the management features of thewhole company, will reflects in a stronger operational in the actual implementationprocess and, more important, will bring significant advantages for the group’s futuredevelopment.Through the study of the reconstruction of internal control system of group D inthis paper, accordance with the national norms to establish a sound internal controlsystem is necessary to the central enterprises. It not only can comply with externalregulatory requirements, but also can help to improve management efficiency, tocontrol risks, to improve the antiquated state-owned culture and institutions, and toinject more vitality and energy for the future development of central enterprises.