Research On Internal Control Optimization Of Private Enterprises Based On Enterprise’s Lifecycle

After reform and opening-up policy, private enterprise has obtained a profound development, and has become the backbone of the economy from a supplementary part of reform and opening initial stages. In our country, the increasing scale of the private enterprises has become an unstoppable trend, and has a vital significance on expanding employment and optimizing the market economy system and promoting social stability. However, we must realize soberly that the private enterprises in our country own a short enterprise life and have a high rate of bankruptcy. Many defeat cases of private enterprises tell us, the flaw and imperfect of internal control has become the cause of private enterprises going to decline, and is also an important developing bottleneck which hinders private enterprises in our country. Proper internal control system can safety a firm, so building the proper internal control system is important.This article combines normative research and case study. It begins with the concept of internal control, reviews the development course of enterprise internal control, generalizes the development law of enterprise internal control that it continuously adjusts along with the growth of macro economy and development of enterprise itself. Then, the key of the article is summarizing characteristics of internal control at different life cycle stages of private enterprise, based on enterprise life cycle theory by Professor Chen Jiagui publishing in 1995 in China Industrial Economics. Finally, uniting theory with practice, applying the development law of enterprise internal control considering the high-speed growth period that the enterprise now locates in, a diagnostic analysis of the internal control weakness of the present stage was made for CL Company, and the improvement advice was submitted. The article believes that the absence of a good control environment is the root of the faultiness of internal control. The optimization of the internal control can not be done at once. The management should attach importance to the internal control and ensure the feasibility of it, at the same time give full scope to enterprise culture and talents.