The Research On Self-inspection And Control Of Tax Risk In Xiang Sheng Tobacco Company

As a result of the development of economy in China, greater and more emphasishas been put on enterprise internal control and risk management. As far as the nationalregulatory system of enterprise internal control is concerned, State Administration ofTaxation set up the department of Large-scale Enterprise Taxation Administration in2008. Based on the American COSO Risk Management Framework, StateAdministration of Taxation issued Guidelines for Large-scale Enterprise Tax RiskManagement (trial implementation) in2009, the first formal guiding document onenterprise tax risk management and control in China, which symbolizes that nationaltax risk management has been standardized and formalized.With a case study on Xiang Sheng Tobacco Company which is mainly contactedby State Administration of Taxation, this paper analyzes the present situation of taxrisk management and control in the company. In line with the active tax rules andregulations, considering the main businesses,management and costing account inHunan tobacco industry as well as the daily administration, tax assessment and taxinspection of the company over the years, this paper collects, analyzes and points outits possible tax risks which include every risk that the company is likely to have in itsdaily accounting. With the research on those typical and popular tax risks, this papertries to establish a feasible and foreseeing program on tax risk self-inspection andcontrol.Nowadays, China’s current research on tax risk management is still in thetheoretical stage. The creative work in this paper is the analysis of a typical case,featuring the practical study on application of related theories. To start with, this papercategorizes those important possible tax risks and designs a data base of tax riskassessment index according to tax types. Secondly, a weight design is conducted in linewith the data base and by means of multi-index comprehensive method, a system of taxrisk assessment index is established and consequently risk assessment levels come intobeing. Then, through comparison of sample analysis, tax risks of income tax forenterprises in the case company are assessed and possible risks can be found quicklywith the help of assessment results. Finally, the company for case study is offered someadvice on tax risk control measures considering major factors of internal control.