Case Study On Internal Control Of *ST Sinopharm Co.Ltd

In recent years,the public's emphasis on internal control has gradually increased.This is mainly because,after entering the 21 st century,there have been a large number of corporate fraud incidents.The frequent occurrence of a large number of fraud incidents has caused investors to lose confidence in the investment market,and it also violates the fairness principle of the market.Major accounting scandals not only occur in developed countries,but similar scandals in China are common,which shows that we need better internal control.This article selects Hubei Yangfan Holdings Co.,Ltd.(hereinafter referred to as *ST Sinopharm).According to the "Basic Standards for Internal Control of Enterprises" and supporting guidelines,the internal control system of *ST Sinopharm is researched to find out what needs to be improved,and the improvement measures of its internal control system are proposed to gradually enhance the competitiveness of enterprises and promote The market is developing in a healthy direction.This article is divided into four chapters.Chapter 1 is the introduction.In this,it summarizes the contents of the COSO framework,"Enterprise Internal Control Specifications" and supporting guidelines;Chapter 2 is an overview of *ST Sinopharm internal control failure cases.First introduce the basic situation of *ST Sinopharm,secondly explain the basic situation of the fact that *ST Sinopharm information is illegally disclosed;again introduce the current internal control system of *ST Sinopharm;finally select four similar companies as the internal control of *ST Sinopharm Control evaluation;Chapter 3 refers to relevant materials such as the prospectus,the company's articles of association,internal control implementation rules,and the implementation details of the Development Strategy Committee by consulting and analyzing *ST Sinopharm.It is required to find out the problems existing in the internal control of *ST Sinopharm;Chapter4 provides countermeasures for the improvement of the internal control of *ST Sinopharm against the problems found in Chapter 3.The study found that *ST Sinopharm mainly has the following problems:(1)*ST Sinopharm's management team lacks professional skills,development strategies are confusing,corporate culture has not been established,and the average education level of employees is low;(2)Management and all employees have weak risk awareness;(3)Poor management of accounting system,financial fraud,poor fund operation,and lax authorization approval system;(4)Information transmission is blocked,anti-fraud mechanism is not established,and employees 'right to complain and report is missing;(5)ST Sinopharm is not established Internal supervision mechanism,internal control self-evaluation is too high.Based on the above internal control deficiencies,this article proposes the following suggestions for the improvement of *ST Sinopharm's internal control system:(1)Improve management capabilities,increase the proportion of independent directors,clarify development strategies,establish a company culture with its own characteristics,absorb high-quality talents and train them;(2)The company should cultivate risk awareness and promote it,establish a risk assessment system,and train professionals to carry out risk management;(3)Standardize the accounting system,strengthen capital operations,and strengthen the implementation of the authorization and approval system;(4)Establish an anti-fraud mechanism,Protect employees' right to complain and report,and broaden the channels of information circulation within the enterprise;(5)Obtain the support of the management,increase monitoring efforts,supervise the internal supervision mechanism,and realize the sharing of internal supervision results.The innovations of this article:(1)Select a control company to evaluate the internal control of the target company by indexing and scoring;(2)Use "Basic Standards of Internal Control" and supporting guidelines to analyze the internal control of a single company.