Case Analysis On Internal Control Of Real Estate Trusts

The history of PRC’s Trust Industry is not very long. Less than 40 years, from 1979 to 2012, the scale of Trust exceeds 7 trillion. Second only to Banking, Trust has become the largest financial sub-industry. Thanks to the bloom of Real Estate at the beginning of the 21st century and the restrictions on financing through bank loans, the real estate trusts grows explosive fast during that time. But in recent years, with the dual negative impact of economy and policy, the environment about investing estate is more and more rational, which makes institution and individual prudent on real estate investment than ever. Thus, because society pays more attention, internal control play a crucial role in real estate trusts instead of boldness. Research on internal control of real estate trusts is becoming more and more practical meaningful.Because trust itself has the characteristics of independence and isolation, therefore, internal control of solo real estate trust business plays an important role in helping trust run and quit regularly. In this article, I intend to research on the real estate trusts internal control based on the knowledge of auditing, finance, accounting and sort of real estate with the guidance of theories of internal control framework. Combine the practical operation process and the professional judgments on key points of the internal control’s goal and characteristics to analysis an authentic real estate trust case. In the end, find the deficiencies from this case and make recommendations on further improvements of internal control of real estate trusts.In detail, there are four parts in my thesis:In the first part, illustrate the background and significance, summarize the article past about this thesis, and demonstrate the structure, innovations and deficiencies of this paper.In the second part, introduce the definition of real estate trusts and the status quo of real estate trust business. Then, build the real estate trust internal control framework based on both COSO integrated framework and the feature of trust company & real estate trust business.The third part, use the internal control framework built in the second part to analyze a representative real estate trust project which codename is J from the viewpoint of characteristics including control environment, risk assessment, control activities, information & communication and monitoring. Next, give a brief summary and point out the defects about this case.The fourth part, raise the suggestions of improvement according to the defects found in the case analysis above which aims to improve the whole real estate trust internal control system.