LH Company Internal Control Optimization Design Research

In consistent with regulation requirements of capital market in listing location, Petro-China and other large overseas central enterprises began to establish internal control system, after the United States issued Sarbanes-Oxley Act in 2002. Research on internal control started relatively late, with the help of advanced achievements of COSO reports, the studies integrates internal control with company governance and gradually notices that it is an important measure to improve company governance and conduct SOEs(state owned enterprises) reform by internal control standard. Therefore, it is necessary to set up a set of internal control standard system to make internal control better. However, the urgent problem in internal control establishment and operation at present is how to optimize internal control system, combining with the actual situation.As a large SOE, it is not difficult for LH Company to build a system in the process of internal control establishment and operation, but difficult to put the system into practice, that is, integrates the system with actual situation of enterprise production and operation, and it is also difficult to boost the scientific, sustainable development of enterprises. The author studies three aspects. Firstly, the paper defines the concepts related to internal control to clarify the connotation of internal control and explain the framework of it, then analyzes the development process of internal control theories and related supervision requirements. Secondly, it teases apart current situation of internal control management in LH Company, and finds several problems, such as indistinct management interface, unclear organization function, complex business process and low execution. Meanwhile, the paper also analyzes the reason of management and control capability problems of internal control in LH Company and designs an optimized project. Finally, the paper compares the former and latter situation by implementing the optimized project and evaluates the effect and proposes related supporting measures.