Study On The Effectiveness Of Internal Control Of Zhangzidao Group

With the development of social economy,all kinds of companies,especially the listed companies which are constantly growing and developing in size and business,the complexity of corporate management has gradually emerged as a result.Fraud scandal about some well-known enterprises not only damages their own corporate image,but also affects the orderly development of the market economy.In such a macro environment,internal control has gradually been recognized and accepted by all sides.In recent years,China has issued "Basic Norms of Internal Control","Corporate Internal Control Supporting Guidelines" and a series of rules.Lots of listed companies have established a corresponding internal control system,but the internal control of listed companies is still emerging.In particular,after the occurrence of the Zhangzidao incident in 2014,the issue of the effectiveness of the internal control of listed companies once again aroused the attention of all aspects of the market.For listed companies,their profitability and healthy development is not only related to the interests of the majority of investors,but also related to China’s capital market and the healthy development of the socialist market economy.In order to protect the interests of relevant investors and further ensure the healthy development of enterprises,improving the company’s internal control system and ensuring the effectiveness of internal control have important practical significance.I use the case analysis method in this assay to study the incident which is about three quarterly loss 800 million yuan in Zhangzidao Group in 2014.After reviewing the development process of internal control both at home and abroad,I take the five elements of internal control as the analysis points to analyze the validity of the internal control of Zhangzidao Group from the angle of control elements and the causes of the internal control problems,as well as explore the corresponding solution.It is hoped that through the study of the case,we will provide experience and reference for listed companies to establish effective internal control system in China.