The Research Of Internal Control In Yantai Power Supply Company

A power supply company in the construction and operation of power grid as the core business, which is connected with the power generation enterprises and the terminal, directly affects the national energy safety and national economy. Its management is concerned by all aspects of society. Internal control is a series of methods and measures to prevent risks and improve management efficiency. Yantai Power Supply Company, a country full of holding enterprise, always thinks of security and stability as the basis of survival and development.It has made much effort to the construction of the internal control, and it has made some progress but has been plagued by some problems.Using interviews, questionnaire survey and comparative analysis, this paper analyzes the internal control status of Yantai Power Supply Company according to the five elements in the COSO report framework. Seven main problems are listed as follows. First, the lack of organizational structure and division of responsibility confusion. Second, the fuzzy responsibilities of the internal control job. Third, the substandard propaganda work on internal controls. Fourth, the lack of management professionals and the special training on internal controls. Fifth, paying little attention to the risk management and the lack of appropriate.mechanisms and procedures. Sixth, an obstructed internal information communication and the scattered data. Seventh, the lack of internal control evaluation and supervision mechanism. Given the above problems, this paper analyzes causes from two aspects of external and internal.The electric power companies are less interested in the reform.It lacks effective external supervision and does not put heavy emphasis on the internal control culture.In accordance with the comprehensive and prudence principle, the suggestions which are to improve the internal control system of Yantai Power Supply Company are put forward as below. In the first place, to create a good internal environment, the professional sector and management mechanism should be founded. Also the duties of each department need to be cleared and excellent enterprise culture should be cultivated. The second, in order to identify risk points effectively, the comprehensive risk management and internal control committee needs to be established. A comprehensive risk management system and risk warning mechanism should be formed as well. The third, the company should not only improve the system of performance evaluation and project management measures, but make effort to control the funds, the fixed assets and the debt too. Optimizing overall budget is also one of the measures to reduce the risk and loss.The fourth, a positive internal communication should be set up so as to create a democratic and open communication environment. The fifth, oversight should be strengthened through auditing and supervision, which has the obligation to provide reasonable suggestions to improve the internal control.In this paper, some advices on improving the internal control system are maded for Yantai Power Supply Company. It makes a case on the construction of internal control for other power supply companies.