The Analysis Of Internal Control For Related Party Transactions Of FSL

With the development of the capital market and the network of the market trading inour county, there are more and more listed companies and there are more related partytransactions among related companies. But most of the listed companies wererestructured from state-owned enterprises, and the stock market was set up by the reformof the economic system, so the stock market was not completely designed bymarket-oriented way. Thus the phenomenon that the restructuring of the listed companyis not complete and that the equity structure is unreasonable is widespread. Besides, theinternal of the companies, there are nor checks and balances. Then the related partytransactions are nothing wrong, but there are a lot of unfair related party transactions inthe listed companies in our country. So the related party transactions become the mainmeans of fraud in some individual companies, especially some listed companies.There are some problems of the internal control in the listed companies in ourcountry, like the illegal guarantees, hiding the related party transactions and day-to-daytransactions in the annual reports. To solve these problems, we need to perfect theinternal control of the related party transactions from the internal of the companies. Sothat we could strengthen the control of the related party transactions, and eliminate theproblems among the related companies.How to strengthen and improve our internal control mechanism of listed companiesmaintain the credibility of the securities market, promote the healthy development ofsecurities market, protect of the rights of minority shareholders, to ensure the security ofstate property, regulating listed companies in China to the affiliated party transactions ofthe internal control of accounting theory and practice is of great significance.This paper will put forward the problems of the internal control of FSL built on theanalysis of related party transaction of FSL, and make an analysis of the reasons. Thenput forward the means of improvement for the internal control of the related partytransactions for FSL by the COSO frame.The first part of this paper will introduce the background and significance of thisarticle.The second part of this paper will introduce the case of the internal control of the related party transactions of FSL.The third part will make a brief introduction of the theory of related partytransaction and internal control. Then put forward the problems of the internal control forthe related party transactions of FSL and make an analysis of the reasons of theproblems.The forth part will put forward the advices to improve the internal control of therelated party transactions in FSL, so that this company will complete its own internalcontrol by these advices.The last part will prospect the future of the internal control of FSL.