Study On The Internal Control Of Enterprise Based On The Budget Management

To establish and perfect the management system of Jinzhong Power Supply Company of Shanxi Province of State Grid, solidify the base and reinforce the foundation, improve management, and prevent risk, the internal control system has been implemented in the whole company. Blending the risk philosophy and regulatory requirements into the company’s processes, systems, functions, assessment, culture and other fields, which are implemented jointly through policy-making, implementation, monitoring and feedback process by the company policy makers, management and staff, aiming at ensuring business legal and compliance, asset security, financial reports and true and complete related information, improving operational efficiency and effectiveness, and promoting the achievement of strategic objectives of the company.Internal control includes the five basic elements of internal oversight such as the environment is dangerous to evaluate and control activity, data and communication, with internal supervising. Budget management is based on strategic business planning featuring the control, planning, motivating, coordinating and evaluation functions through all aspects of supply, production and sales, as well as the other aspects of modern enterprise management system of enterprise financial management, human resources management, materiel management, etc.Under the guidance of strategic objectives, the enterprise forecasts and plans fully and comprehensively about the future operating activities and corresponding financial results, and compares the actual completion with the budget targets and analyses them through its monitoring of the implementation process, thereby in order to guide to improvement and adjustment of business activities timely and help managers more effectively manage the enterprises and maximize the achievement of strategic objectives. Therefore, budget management is a central component of the internal management of enterprises. With the ambitious goal about "creating a world-class grid, making the international first-class enterprise", which is put forward by the National Grid, Jinzhong power supply company is moving towards the introduction of competition mechanism and in the direction of market-oriented reforms.In 2012, the SASAC has developed the management improving activity overally with the theme of solidifying the base and reinforcing the foundation, controlling risk, transformation and upgrading, preserving and increasing the value, getting strong and excellent, and developing scientifically in the central enterprises, and taken the internal control construction as an important part of this activity.In early October 2012, the National Grid Corporation issued Concerning the issuance of Circular on the implementation plans and accessory materials of internal control construction of State Grid Corporation(National Grid finance(2012) 1387th), and required the subordinate units to build regulatory internal control system before in May 2014. The National Grid Corporation will regularly carry out internal control supervision and inspection. If they found significant deficiencies in internal control, the corresponding unit will be deducted and downgraded in the performance appraisal according to its nature and the level of impact. Therefore, it is required that the units strengthen organizational leadership, establish work plan, build orderly comprehensive internal control system, and take measures to ensure its effective implementation.On the realistic situation of Jinzhong Power Supply Company of Shanxi Province of State Grid, from the usable angle, by using basic principle of economics, accounting and financial management, etc, on the basis of financial management theory, enterprise internal control theory and other related theory, and by using the research method of combining the theory with practice and contrasting mutually, this article thoroughly analyses and studies the construction background, construction goal, construction principle and construction method of the present internal control mode of Jinzhong Power Supply Company, and puts forward the internal control theory system on the basis of budget management, which is studied and assessed, and finally designed the theory system which has strategy, closed relationship with company’s reality and strong operation to ensure Jinzhong Power Supply Company achieves the goal of the continual, healthy and highly effective development under the sound internal control management system.