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How to improve the internal control of listed companies

Author: QiAiLing From: www.yourpaper.net Posted: 2009-09-28 22:35:31 Read:
[Abstract] listed the construction of internal control related to the vital interests of the majority of investors, and has been subject to the regulators, attaches great importance to the universal concern of the market. In June 2008, the Ministry of Finance, Securities and Futures Commission, the Audit Commission, the China Banking Regulatory Commission, China Insurance Regulatory Commission and other five ministries jointly issued "on the issuance of the enterprise internal control basic norms of the notification, the enterprise internal control basic norms", the notification requirement for listed companies since July 1, 2009, implementation of large and medium-sized enterprises to encourage unlisted. The introduction of the norms is undoubtedly brings an opportunity to thoroughly sort out their own risk for enterprises, especially listed companies and more Chinese enterprises to go out to participate in the global competition management foundation. Based on this specification and the new accounting standards system to talk about the listed company's internal control issues.
[Keywords] listed company's internal control risk management

First, the new accounting standards and internal control relationship

The implementation of the new standards is bound to the internal control have a significant impact, and the establishment of good internal control is effective implementation and enforcement of the needs of the new guidelines.
1, new standards and internal control goal congruence
System of the new guidelines is to enhance the quality of accounting information to meet the needs of investors, creditors, government, and corporate management and other interested parties on the accounting information, thus standardizing accounting behavior and accounting work order, to reduce business risk and improve enterprise management level and safeguard the public interest, and to promote economic development. Enterprise internal control basic norms: Internal control is a process of affected by the board of directors, managers and other personnel, the process designed to provide reasonable assurance of the following three types of target - the effectiveness and efficiency of operating, financial reporting reliability, laws and regulations to follow. Visible, both goals ultimately are conducive to the realization of corporate objectives, to promote the healthy development of the economy, the basic goal of both is the same.
2, new standards and internal control interactive
Between the new standards and internal control are complementary and mutually reinforcing relationship. On the one hand, the implementation of the new standards is to improve the motivation of the internal control, able to promote the improvement and innovation of the internal control system. In other words, to promote the construction of the internal control practices and strengthen internal control theory, as well as to speed up the government to improve the process of internal control laws and regulations. Sound internal control, on the other hand, is the basis of the implementation of the new standards, the institutional environment for the implementation of the new guidelines, to provide a guarantee to improve the new guidelines to follow, error correction through a variety of measures, to improve the quality of accounting information, to strengthen the implementation of the new the supervision of the criteria, standardizing accounting behavior, improve the efficiency of the implementation of the new standards, the effect is.

Second, the internal control of listed companies in China to the problems

Guangxia, Dahlman financial fraud and the CAO, negative typical of our internal control, has left us a bitter lesson. Therefore, in-depth analysis of the internal control failures and their causes, it is very urgent and necessary.
1, the internal control environment is relatively poor
Internal control environment is to form an organization's internal control atmosphere to reflect the organization's internal staff especially the attitude of the management of the internal control, internal control other elements. Control of any enterprise in the control environment, control environment reflects the attitude of the enterprises on the importance of internal control of the enterprise. The unity of the ownership and management of listed companies, the arbitrariness of the decision-making and operations management. Enterprise management has often awareness of the importance of internal control is not enough or unwilling to establish and implement internal control, the former is that their own business is sufficient to ensure the safety of the property, while the latter is driven by profit motives. Management of listed companies want to maximize profits at the same time as much as possible tax evasion, and sound internal control is effective to prevent such illegal behavior. Management in appointing accountants cronyism, bring greater convenience for themselves to seek benefits, such as falsifying cost or conceal income. Due to the success or failure of internal control depends on the control consciousness and behavior of people, often the managers of the rejection of self-control so that the internal control can not improve the control environment, which also affect the employees' understanding and implementation of the control.
Specifically, the internal control environment is relatively poor mainly reflected in the following aspects. First, enterprise management awareness of internal control weakness: the lack of a documented system of internal control, even though they have worked out corresponding internal control system, it is difficult to concrete implementation. Second, the organization set unreasonable: cost savings, financial sector, the lack of contain links, and the lack of coordination between the department transverse enough attention, leading to the same level departments lack the necessary exchange of information communication insensitive, coordination poor. Third, the enterprise system is not perfect: the lack of incentive and restraint mechanisms. Fourth, the enterprise system is not comprehensive: not for all aspects of the business, individual departments to develop appropriate rules and regulations, the trade-off is more serious. Fifth, the company serious short-sighted behavior, a lack of understanding of the corporate culture.
, Risk consciousness, contempt of internal control
With the continuous development of market economy, the listed company at this stage facing greater environmental changes and survival risks such as market risk, credit risk, operational risk, reputational risk, technology risk, and faced with the change of the type of transaction and tools merger acquisition, bankruptcy reorganization, and e-commerce. Enterprises should establish the identification, analysis and management of risk mechanism, and confirm that the high-risk areas in order to strengthen the management. Listed Companies in China is the lack of such a mechanism, the shareholders' meeting, board of directors, board of supervisors, managers and mutual supervision and restraint mechanism is not established, the Board Risk Assessment Committee or non-existent, to cause random decision-making in the case of the absence of a feasibility study. Neglect of risk control of listed companies in the running process weakening risk management, risk assessment, risk awareness weak widespread. At the same time, of a large part of the company's management emphasis on production and management, technology development, contempt internal management despise internal control failed to recognize the significance of internal control, internal controls on the operation and management of the strategic height to consider.
3, the internal control system is not standardized
Currently, listed companies in China in accordance with the the SFC requirements established internal control system, but its operating specification processes are more extensive, and the lack of a unified, detailed, and has a strong operational posts processes. Problems often shirking of responsibility makes it impossible to be held accountable. Some companies even have an internal control system, but not implemented, the non-implementation of the system, according to the system assessment, it exists in name only, can not play its constraints, the supervisory role. The flexibility of some of the company's accounting system is too large, the comparability of the information poor, misleading decision-making, resulting in significant losses. Sound regulatory framework and improve operational processes is an important part of the system of internal control, and can effectively prevent risks. Unfortunately, the number of listed companies is more important than the development of lighter than management, there is the need for additional income, inadequate cost control, a serious waste of assets and loss issues, poor operational efficiency, frequent personnel changes, the internal control system or a very imperfect , or a mere formality.
4, internal audit institutions of lax supervision
Our internal audit institutions originally established under the requirements of the Government, companies do not really recognize the role of the internal audit, so that the internal audit institutions did not really play its role, which is mainly manifested in: first, our internal audit function still troubleshooting a variety of measures. Only focus on supervision afterwards, do not pay attention before, during control; only attach importance to the audit of the financial statements, and ignore the analysis and evaluation of the company's management status quo, and to make recommendations. Second, internal audit institutions often essentially led by the management and parallel with the other departments, therefore the independence of the poor poor and authoritative. Third, most of the internal auditors from the accounting department transferred or concurrently by the accounting department personnel, lack of audit knowledge, especially with the expansion of business scale, business complex, difficult to meet the needs of internal audit staff. Third, strengthening the listed company's internal control measures
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