Study On Internal Control Of The Bank Counter Business Line In The XX Branch Of Bank Of Communications

With a long history, Internal Control had already been mentioned and realized by people in 1930s.From the Internal Restraint System to the Internal Control System, to the Internal Control Structure Theory, to the Internal Control framework, and finally to the Enterprise Comprehensive Risk Management Theory, through five stages of development so far, has become a work to which all enterprises must invest enough resources to ensure the success of the enterprise. Since the promulgation of Sarbanes-Oxley Act, Internal Control of the enterprise had become the focus of the eyes of investors as soon, and managers had to devote more efforts to ensure the effectiveness of Internal Control. Further development of Internal Control from the five elements to the eight elements, the Enterprise Comprehensive Risk Management is gradually spreading out, but the business operators and investors is still worrying about risks. With few people being aware of the risks often associated with opportunities and benefits, we were always controlling risks but ignoring the duality of risk at the same time, so opportunity lost.Even in the process of risk control our enterprises invest too many resources bringing big burden to themselves.As a high risk of financial sector,banks always walk in the forefront of all enterprises in risk management. But in the stage of the Internal Control to Risk Management, the bank’s Internal Control is still using the old idea, not yet out of the stereotype to prevent or correct disadvantages. Since Lehman’s collapse and the publication of New Basel Agreement, international banking especially some commercial banks in developed countries clean up themselves, then run after a higher level of Risk Management understanding the risk-benefit principle. However at the same time Chinese five major state-owned banks are still hesitating to make a new attempt afraid of the uncertain adverse effects.Because of the close combination of Internal Control and Risk Management under this background, banks is selected in this article as experimental field of research, using cutting-edge internal control theory to analysis and reconstruct the banks’Risk Management, a domestic banking Internal Control standards is formed. And then the counter business line in XX Branch of Bank of Communication serves as the touchstone to verify the effectiveness and feasibility of the system. Finally through the comparison of the standards and practices,we find the problem, and provide corresponding solutions or suggestions for the operation of the banking according to this standard.Through Literature reading, field investigation and case empirical study, the article is written along the thinking line to find the problem, analysis the problem, solve problem. Combining the comparison between international experiences with the understanding of Risk Management and Internal Control,a new idea is put forward that building a suitable Internal Control system for domestic bank counter service need to explore from a new perspective. Also the relevant ideas and thoughts are applied to the Internal Control case on the counter business line of XX Branch of Bank of Communication. Study found that:the Internal Control on the counter business line of XX Branch of Bank of Communication is still staying in the stage of deliberately control; the Internal Control targets go against the bank overall strategy; Risk Management doesn’t pay attention to the risk-benefit principle; Through the new design of the internal control system,we can guide the improvement of banks by providing feasible corresponding improvement opinions and suggestions.The innovation of this paper lies in reversing the traditional internal control bias, turning Internal Control from external requirements into internal requirements; using management point of view to understand or analysis Internal Control and splitting the whole Internal Control system into small modules, Internal Control becomes a management tool to serve the internal management of enterprises. Similarly, by this method, we can not only inform Risk Management philosophy in Internal Control throughout the enterprise specific management practices, but also keep this method for the practice of new Internal Control theory in other departments or businesses to provide reference.To sum up, this paper provides a way to improve the internal control of the bank, which is mainly reflected in two aspects:On the one hand, it provides the thought and method of internal control design. Through the new perspective of loss risk and opportunity risk, we find that the risk management needs in the external supervision and internal control of banks have a lot in common.Based on this, a new type of Internal Control can be created to satisfy the demands of the external environmen and internal management, in which the external factors are incorporated into the internal control factors and the scope of internal control is expanded greatly. Applying this new type of internal control to the the bank counter business line, commercial banks can establish a bank counter service line out of the ordinary which could meet the external regulatory requirements (laws, regulations and Industry regulation), competition in the market demands (customer satisfaction) and the requirements of the internal management (risk management) of the internal control system.On the other hand, it provides a new idea and method of internal control in enterprise practice. The overall goal of the bank can be refined decomposition for the goals or objectives of each business line, so in turn Internal Control improvement can also be put into action from the specific business unit even individual elements of internal control, then gradually spread. In this way, banks can not only avoid the great leap forward of the reform bring a great shock to the bank, but also can find out the ideas and procedures through this small-scale pilot, to learn the relevant experiences and lessons.