Research Of Internal Control System For Short-term Financing Bond

Since the reform and opening up, the development of China’s direct debt financing business continues to accelerate, the financial market situation has undergone a tremendous change. Bank borrowings was what China corporate’s long-term finance rely on in the form of direct financing channels, in 2005 the People’s Bank again to allow the issuance of short-term financing bonds, which changed the source of funding scarce and increased a new financing channels, it infuses fresh nutrients to enterprises with its low-cost, convention and efficiency. Simultaneously, the People’s Bank and the relevant regulatory agencies issued related management practices, procedures and regulations for risk prevention measures of short-term financing bonds business.Just in the 2013, the inter-bank market’s currency tensions caused a rare "money shortage", bank lending rates have been several new heights, and in 2014, the central bank remained stable release of tight monetary policy signals. In this case, convenient, fast and cheap short-term financing bills will become favorable corporate financing tool.Meanwhile, with the development and expansion of enterprises, complex financial management and financing needs become bandits problems to be solved.In the condition of meeting the requirements of setting up a finance company,which were mentioned in the "Application Group Finance Company established procedures", issued by CBRC, more and more large enterprises set up finance companies assume group -related functions in order to make itself focused on the production, operation and development,and to have a more professional financial services.Finance company undertake the business in the short-term financing of group is not yet in vogue, but it seems to be the trend, it is the finance company’s "vocation". This paper tries to take Jiangsu Communication Holdings Group and its financial company as the basic structure, launched a study to research the internal control system of short-term financing bonds business.Firstly, the internal control theory of China and the West were listed systematically. With the historic international research on the internal control, related theory was more complete, and therefore the mode of international internal control were summarized and commentary to apply in the design of the internal control system in this article. "PMBOK" which was issued by U.S. item management Association, "Enterprise Risk Management-Integrated Framework" which is issued by COSO, "Central enterprise-wide risk management guidelines ", and "3C" comprehensive risk management framework proposed by Zhong tianheng CPA.Secondly, the U.S. financial market and management is more mature and experienced, short-term financing bonds’issuance has also been a long history,this article will describe the background of short-term financing bonds business in United States, conduct a brief introduction and summary of its successful practices and failure experience; also, the short-term financing bonds business development process and experience in China were summarized briefly.Then, based on the above theoretical basis, relevant regulations and guidance documents to establish a general model of the internal control system and internal control system; elaborated the internal logic and the established methodology of model; develop a general business process of short-term financing bonds; decompose the business objectives in decomposition matrix. And the working methods of the model design elaborated, includes risk identification, risk analysis, risk response and risk assessment.Finally, short-term financing bills on the special nature of the business of Jiangsu Communications Holding Group were described, the risk of transferring short-term financing bonds business from the group to its finance company was identified by checking internal and external system files. Preliminary the business risks are classified as " compliant risk "," operational risk " and " market risk ", then further analysis of the various types of risks was done, mentioned risks were ubdivided into procedural norms risk, information disclosure risk, qualification risk, price risk, credit risk and liquidity risk.Corresponding measures are listed in the risk control matrix by combining with establishing business process systems. Finally, the implementation of the effectiveness of internal control systems were evaluated.The contribution of this paper is that, a general model of internal control systems was established, created a rigorous internal logic of internal control, formatted of a methodology to establish internal control subsystem, constitute a rigorous and applicable internal control system.Secondly, at the base of the general organizational structure of group finance company and the mission of burdening for the Group’s financial investment, financing, consulting and other functions, short-term financing bills was transferred to the finance company for Co-issuing. Authorization management solutions were designed,the risks of the financial company’s assist with operating short-term financing bonds to were identified and analyzed to develop a risk response measures, so that a set of available reference internal control system for group finance company business of short-term bonds was proposed.