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Monitoring and evaluation of internal control On Wohuo listed companies

Author: YuZhongFu From: www.yourpaper.net Posted: 2009-04-03 08:12:31 Read:
Abstract: strengthening internal controls must be emphasized that the monitoring and evaluation of problems, internal audit, internal control self-assessment and external evaluation of the impact on the listed company's internal control effectiveness of the construction. Three Ways to strengthen the internal audit, vigorously promote the self-assessment system of internal control, external evaluation mechanisms improve the internal control is to strengthen the listed company's internal control monitoring and evaluation.
Keywords: internal control; internal audit; assessment


Internal control for the importance of the enterprise is self-evident, almost all businesses to set up their own internal control system. Especially listed companies, whether it is voluntary for strengthening internal management or succumbed to the pressure of the external information needs, the internal control system seems to be readily available, Taiwan and reasonable. However, these internal control system in the end "tube" what, who to be accountable, how monitoring and evaluation of the system of internal control of listed companies has become a very important issue. Based on this, the paper focuses on the monitoring and evaluation mechanism for internal control of listed companies in China, and try to put forward some pertinent observations and recommendations.

, Monitoring and evaluation of internal control mechanism

Supervision mechanism is an important part of control in the company, the company's stakeholders on the implementation of the objective conduct of operations of the Company's agent, process or decision-making and other business activities, the timely monitoring a series of general term supervision system. Supervisory mechanisms including internal oversight mechanisms and external oversight mechanisms. Reality only focus on the establishment of the system, rather than focus on the implementation of the relevant system, which became a key factor in China's internal control is generally weak. In the process of monitoring of internal control, internal audit, internal control self-assessment and external evaluation of internal control plays an important role.

(A) internal audit of internal control oversight
The internal audit is an important part of not only the company's internal control, affect the supervision and internal control over other aspects of the main force. In 1993, under the impetus of the National Audit Office, many of our businesses rush to establish the internal audit department. However, many companies and not the internal audit and the internal management mechanism, which makes the status of the internal audit system collapse. Do not get sufficient attention and effective implementation.
A lack of independence of the internal audit
Generally adopted in the restructuring and listing of state-owned enterprises in China, the internal audit department of internal set parallel with the other business units, go directly to the chief accountant or financial officer in charge of and responsible for reporting. Under the organizational structure of the internal audit, the auditors by the audited entity to a variety of interests, relationships. Independence of the internal audit institutions and their staff work is not strong and can not be objective, true and impartial, in-depth work, the audit made the decision because of the constraints on the management system and the lack of effective implementation of.
Internal audit staff is generally not high quality
In reality, the internal audit staff from the accountants in the configuration most, there is a relatively single professional knowledge structure is not reasonable, lack of knowledge and skills, non-standard audit reports a series of questions. A direct result of the internal audit functions of positioning unclear, the proposed audit recommendations operability is not strong, significantly reducing the effectiveness of the internal audit.

(B) evaluation of internal control system
Evaluation of internal control is generally considered to help to improve the trustworthiness of the information disclosed in the Company's internal control. The evaluation can be divided into two types: internal control self-assessment and internal control external evaluation.
A self-assessment of internal control problems in
"Control self assessment (Control SERF-As-sessment.CSA)", is from time to time by the enterprise itself or on a regular basis to assess its internal control system, the effectiveness and the efficiency and effectiveness of the implementation of the main evaluation of internal controls to more good to achieve the objectives of internal control. CSA concept was first proposed in the 1980s by Bruce Mike Iger (Bruce McCuaig), and then to carry out a subsidiary of Gulf Canada Gulf energy companies. Its features are easy evaluation and implementation. The evaluation is made as the object being evaluated individual or on behalf of the group consisting of. CSA using the electronic voting devices to vote on the results, to ensure that voting is anonymous, which can guarantee the results of the evaluation more objective and accurate, this highly respected supporters. Studies have shown. Implementation of the CSA have a positive role for the enterprises to strengthen management, improve efficiency, improve processes and control risk.
In April 2001, China promulgated the "Public Offering of Securities Company Information Disclosure content and format guidelines No. 11 - listed companies to issue new stock prospectus", put forward new requirements for the refinancing of listed companies reporting material. Article 59 of the file. The issuer should disclose the integrity of the management of the internal control system, reasonableness and validity of self-assessments, certified public accountants on the issuer's internal control evaluation report should disclose the concluding observations. Under these conditions, the internal control disclosure of information, the obligations and responsibilities of internal control is difficult to achieve, is not enough to provide investors with useful information for decision-making. I believe that the control of the self-assessment system should be applied in a broader range, and should be more mandatory guidance and external openness.
2 external evaluation of internal control problems in
(1) lack of complete external evaluation of the internal control system standard. Under realistic conditions, because our country is not complete internal control standards, certified public accountant to evaluate the internal control operation barriers. CHEN Guan-Ting Li-mei comparisons made The main difference between our norms and the relevant norms of the United States is the lack of mandatory information disclosure of internal control and universality of the clear provisions of the lack of uniform requirements on disclosure form, making listed companies in the internal control information disclosure on the selective and arbitrary.
(2) the range of the external evaluation of the internal control system is too narrow. Reality. External evaluation of internal control in China, mainly refers to the assessment of the internal control system by certified public accountants. Chinese Institute of CPAs was released in May 2002 according to the requirements of the China Securities Regulatory Commission, the internal control audit guidance to guide the CPA to the evaluation of internal control business. Which points out that "the views of the term" internal control audit is entrusted Certified Public Accountants, Audit Unit authorities on a specific date financial statements effectiveness of internal control audit identified, and express an audit opinion. But. As mentioned before, the China Securities Regulatory Commission, Securities Company's internal control guidelines, norms of internal control, it is clear that the certified public accountant to evaluate internal control, and is not limited to corporate internal control relevant to the financial statements. In theory, all components of internal control should be the scope of the internal control evaluation, but because of the CPA's knowledge, experience and liability reasons, Certified Public Accountants of internal control mainly refers to the scope of the evaluation and accounting statements internal control relevant, resulting in the external evaluation of the internal control system was too narrow.

Second, improve the monitoring and evaluation mechanisms of internal control measures

The process of monitoring of internal control, internal audit and internal control evaluation mechanism plays an important role in strengthening the construction and implementation of internal audit control assessment mechanism is an important means to achieve effective supervision.

(A) measures to strengthen the internal audit
1 to strengthen the independence of internal audit in accordance with the Institute of Internal Auditors (LLA) on June 26, 1999, the Council adopted a new definition of the internal audit: Internal auditing is an independent, objective assurance and consulting activity, which aims to Increase the value to the organization and improve an organization's operations. Through the system, disciplined approach to evaluate and improve the organization's risk management, control and management effectiveness of the process, help the organization achieve its goals. Order to better help enterprises to achieve the goal of internal audit functions, internal audit institutions need to provide a full range of services directly to the board of directors and management authorities. Therefore, to solve the independence of internal audit, internal audit institutions should be directly responsible to the Audit Committee and the leadership of the regulatory authorities. This restructuring can guarantee the independence of the internal audit institutions, and are conducive to the internal audit department to carry out its functions.
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