Research Of The Optimization Of Yabaite Internal Control Based On COSO Internal Control-Integrated Framework

With the rapid development of the capital market,all kinds of financial frauds and operating scandals of listed companies occur frequently,exposing the serious shortcomings of listed companies due to the neglect of internal control construction.As a result,internal control has become the focus of public attention worldwide.As a benchmark enterprise in the industry of metal roof enclosure system,Yabate has been punished by CSRC for financial fraud.In August 2018,the CSRC officially started the delisting process for Yabate.The financial fraud behavior involves overseas projects,and the amount is large and the evidence is difficult to be collected.The social impact caused by this behavior is very bad,which exposes the significant defects of Yabate's internal control and the failure of its internal control.However,this kind of problems existing in the internal control generally exist in China's listed companies,which are representative.Therefore,this paper selects Yabate as the case study object.Based on the five elements and 17 principles of the COSO framework,this paper analyzes the reasons for the failure of internal control of Yabate,and finds that the following problems exist in Yabate's internal control :1.The organizational structure is out of balance,the board of supervisors is unable to form checks and balances on the management,the management and the management are confused,the corporate culture needs to be changed,and the management does not fully publicize the internal control;2.Risk control target setting is not comprehensive enough,risk identification and risk assessment procedures are not systematic,and no preventive measures are taken against potential fraud risks;3.Neglected the risk control of the management information system;4.Problems in information disclosure and internal information horizontal communication;5.The audit committee and internal audit department lack the guidance of working rules,and the supervision is formalized.In view of the above problems,this paper proposes the following optimization and improvement measures: 1.Adjust the organizational structure,separate the management layer and the governance layer,and enhance the independence of the audit committee.Establish a new human resource management system,pay attention to the cultivation of staff ethics.Add the construction of internal control into the corporate culture and improve the importance of internal control in the enterprise.2.Refine the objectives and criteria of risk assessment,add anti-fraud mechanism into risk assessment,and develop the anti-fraud ability of enterprises.3.Set process control activities according to the control activity categories.Strengthen the risk control of management information system.4.Design a new information communication mechanism to improve the efficiency of information communication.5.Optimize the internal audit supervision system,and point out that a clear internal audit charter should be established.Finally,some Suggestions on internal control optimization are putting forward for other listed companies in China.