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On internal control system of securities companies

Author: YangHu From: www.yourpaper.net Posted: 2007-11-19 14:06:48 Read:
With the increasing development of China's securities market and the listing Corporation, China's securities company internal control mechanism is not perfect, the internal control as a corporate self-regulation and internal mechanism of self control, in the important position of unit of the central nervous system, can we say that there is no sound after the internal control is good, it is very difficult to organize the modern enterprise production and management.A sound and effective internal control system, can not only ensure the correctness of enterprise accounting information, financial revenue and expenditure of effective legal and property safety integrity, can guarantee the business activities of the efficiency, effectiveness and the implementation of enterprise management decision and the laws and regulations of the state.

A, internal control structure of

Internal control structure includes three parts:

(a) control environment.The so-called control environment refers to establish, strengthen or weaken the efficiency of specific policies and procedures, an impact of various factors, including: the management idea and management style; organizational structure; the board and its committees, especially the audit committee functions; method to determine the powers and responsibilities of the management control methods; monitoring and inspection work, including business plan, budget, profit forecast, plan, responsibility accounting and internal audit; personnel working principles and its implementation; affect the business of various external relations.

(two) the accounting system.The accounting system provides business identification, analysis, classification, registration and reporting method, clear management responsibility for assets and liabilities.Perfect accounting system should be to achieve the following goals: identification and registration of all legitimate business; on all kinds of business on time for proper classification, as the preparation of financial statements on the basis of the economy; business according to the appropriate monetary value, so that included in the financial statements; determine the date of business operations, according to the accounting period are recorded; in the financial statements properly describe the economic business as well as related to reveal.

(three) control program.Control procedures that authorities are formulated to ensure achieving the purpose of policies and procedures.Include the following contents: the approval of business and economic activities; a clear division of labor of all staff, prevent the relevant personnel to engage in illegal activities and normal operation of hidden faults, the division of responsibilities including the assignment of different persons undertake approving business, record business and property preservation responsibilities; to set up and use vouchers and bills, should guarantee the business and activities get the right of property records; and the contact and the use of protective measures should be; review of registered business and its valuation to.

The existing problems of
two, internal control of securities company

Due to the influence of internal control design has its limitations and the securities company's internal factors, there are many problems in the internal control of securities company, main show is:

(a) the imperfect corporate governance structure.

Although the securities companies have been established by the general meeting of shareholders, board of directors, board of supervisors and managers of corporate governance structure of layers, but in the practical work of every management responsibility is not clear, it is difficult to strictly in accordance with the "company law", "Securities Law" and other relevant laws and regulations for operation.

(two) financial and business control problems.

At present, China's securities companies are lack of sources and channels of long-term funds, resulting in the management for the short-term behavior, not according to their own long-term development needs the investment strategy.Due to a serious shortage of funds, especially the lack of cash flow, the pressure on the survival and development to participate in violation of the securities market regulation of business, such as misappropriation of clients' deposits, interbank borrowing heavily disguised, disguised absorbing various corporate deposits, illegal out of bank credit funds and other illegal behavior.Especially in recent years a market not make compensation package, many do not have the qualification of securities brokerage securities companies use various forms and means of illegal business operating business.Because the internal control system of the ineffective implementation and design issues, resulting in financial and business management confusion.

(three) the internal exercise control functions of management personnel breach of privilege, deliberately engage in malpractices for selfish ends, malicious collusion behavior, can make the related internal control system to lose.For example, the business department of accounting personnel and computer staff collusion, illegal modification data securities trading system, add some margin account funds over the control, thus the misappropriation of funds for personal stock trading, profit from, and then to reduce the funds out of the misappropriation of funds back to fill, to conceal the misappropriation of funds behavior; or in cooperation with other enterprises, the use of illegal capital stock.Internal control as an important part of enterprise management, it should be in accordance with the intention of behoove operation and management staff, implementation of internal control out of the question, also lost control effectiveness; and, in the incompatible positions of collusion, lost the basic premise of mutual restraint, internal control is difficult to play a role.

(four) internal audit.Many securities companies have internal audit agency audit department, but the internal audit staff is often to glance over things hurriedly, rarely on the true meaning of the audit, is often follow the wishes of the leadership, audit department useless.

In addition, the company staff quality does not meet the requirements, the implementation of internal cost benefit, control of temporary control not in time and other factors will affect the internal controlling system.

Three, to establish the system of
sound internal control of securities company

The company should establish a reasonable, effective internal control system in accordance with the requirements of the China Securities Regulatory Commission, the relevant departments, the relevant positions are effective supervision mechanism, ensure normal business operation, to maximize the control management risk.

(a) to control the environment of

Starting from the control environment, establish the organizational structure of the modern enterprise system, strengthen the function of board of directors and the independence, the manager under the leadership of the board, to fulfill the obligations and the exercise of power in the daily management and operation; improve the quality of the staff, the implementation of incentive mechanism, clear responsibility; internal audit departments and clear authority, strengthen risk assessment and management through internal audit, constantly self supervision and improvement; combined with the characteristics of its business areas, establishing the specific system.

(two) the control program of

1, the business control.

In the principles of openness, fairness, justice is based on the vertical leadership, lateral supervision management mode, implement the system of examination and approval of the transaction.Namely financial plans, unified management, unified funds business control, various functional departments of the supervision within the scope of authority according to the provisions of the rules and regulations of the company, the two complement each other, forming an organic whole mutual supervision.The effective exercise of decision-making in the articles of association of the authorization of the board of directors and shareholders rights within the scope of.Activities, investment activities and business activities important institutions, conduct a feasibility study of investment project by the relevant departments, the project investment risk and reward, to report to the general manager, the board of directors and the general meeting of shareholders, the corresponding implementation after approval procedures.The major brokerage, borrowing and large cash payments, asset adjustment, business department settings must be approved by the general manager.According to the company's internal management structure, layers of decomposition of the implementation, regular examination in the year, to correct the problem according to the evaluation results, summarize the achievement, to achieve centralized control purposes.At the same time, in order to many risks prevention and management of securities business in the economy, formulate relevant preventive measures according to the characteristics of each link of trade and service, to avoid accidents; and on this basis, perfect the relevant security system, rights and obligations of the parties to clear, to prevent the risk of new electronic transactions; formulate a unified access procedures and authorization shareholder account and capital account management system, customer funds examination and approval system, the account information to the customer to develop a unified storage system; implement the Securities Trading Corporation central clearing system, strict capital timely liquidation and shares the settlement procedures.
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