Research On Internal Control Of Rural Commercial Bank In County F

Agriculture is the foundation for the development of the national economy.As a populous country,China has a large agricultural population and the status of agriculture is particularly prominent and important.The vigorous development of rural finance has made tremendous contributions to accelerating agricultural development,raising the living standard of the agricultural population,and maintaining social stability in rural areas.However,because agriculture itself is a weak industry,it is highly dependent on the natural environment and has a weak anti-risk capability.China rural financial development lags behind,the weak foundation of the current situation has been going on for a long time.As a pillar industry of rural finance,rural commercial banks have inherited the essential characteristics of the original rural credit cooperatives that mainly serve the “three rural” industries and small and micro enterprises.Rural commercial banks mainly provide guarantees and loans for farmers with small-scale operations,poor stability,low yields,and low risk-tolerance,farmers,and peasant enterprises,and small and micro enterprises.The customers faced by rural commercial banks have the characteristics of lower customer qualification,poor credit and higher default risk.In the current situation where the agricultural insurance system is immature,rural commercial banks have a higher operating risk than other large commercial banks and foreign-funded banks,which also means a higher operating cost.Therefore,strengthening internal control as a basic approach to reducing operational risk and operating costs is of critical importance to rural commercial banks.F County Rural Commercial Bank was restructured from F County Rural Credit Cooperatives Association in 2016.Due to the imperfect internal control system of the former Rural Credit Cooperatives and the inadequacy of the internal control system to the current development environment.The restructured rural commercial banks still face various problems such as low operational efficiency,low quality of credit funds,and high non-performing assets.This paper takes rural commercial banks and internal control as the entry point.This paper applies the relevant theories of the overall framework of the US COSO internal control,draws on the mature experience of the internal control of large commercial banks,and uses case analysis methods to review,investigate,and summarize the problems existing in the internal control of F rural commercial banks.This paper compares five factors(control environment,risk assessment,control activities,information communication,and supervision),analyzes the causes of the problems,and combines the specific characteristics of rural commercial banks,and make suggestions.This article provides guidance and reference for F county rural commercial banks to improve their own internal control system and reduce business risks.At the same time,it hopes to provide insights for establishing and improving internal control for other commercial banks.This paper main conclusions are:First,internal control has become a key factor restricting the further development of F rural businesses.Through the analysis of F-county rural commercial banks' related operational data,we found that the existing problems of F-county rural commercial internal control and the impact of internal control defects on the development of banks.According to the analysis,F rural commercial banks can achieve sustainable development only if they further improve internal control and reduce related risks.Second,this paper proposes to improve F county rural commercial internal control recommendations.This paper analyzes the causes of the problems in the internal control of rural commercial banks in F County against the five elements of COSO internal control theory(control environment,risk assessment,control activities,information communication,and supervision).This paper combines the characteristics of F rural commercial banks and puts forward reasonable suggestions.Third,it is clear that the strategic positioning and strategic objectives of F rural commercial banks are the first step for F county rural commercial banks to improve Japan's control.F rural commercial banks should base themselves on the strategic advantages of serving “three rural issues” and serving small and micro enterprises for many years,and define their strategic positioning and goals.F rural commercial banks should change their ideas of blindly pursuing scale expansion and adjust strategic thinking and organizational structure for internal control.Fourth,it is crucial to improve the internal control of the credit risk of rural commercial banks in F County.By analyzing the operating income and profit data of rural commercial banks in F County,the main business of rural commercial banks in F County is limited to the traditional deposit and loan business,and the deposit and loan interest difference income accounts for more than 80% of the bank's income.The non-performing loan ratio of rural commercial banks in F County is higher than 5% for a long period of time,which not only means a huge credit cost,but also means a huge credit risk.