Analysis and improvement of internal control process Chinese Unicom capital expenditure
|School||Beijing University of Posts and Telecommunications|
|Keywords||China Unicom Internal Control Capital expenditures Internal control processes|
The Ministry of Finance, Securities and Futures Commission, the Audit Commission, China Banking Regulatory Commission, China Insurance Regulatory Commission jointly issued the "Guidelines on Internal Control supporting" in April 26 of 2010, which built a standardized system of internal control in China with "basic norms of internal control"(2008.5). It represents the internal control system’s construction and application have fully completed. Actually, it is a significant measurement to enhance the level of management capability and competitiveness of the public companies and non-listed medium-sized enterprises, besides, it also would become an effective means for Chinese enterprises to cope with the international financial crisis and complex forms of competition.The "Guidelines on Internal Control supporting" that refers "Internal Control Practice Note No.7-Purchasing Business ","application of internal control guidelines No.11-Project" and "Internal Control Practice Note 8-Asset management "are closely related to capital expenditure.To be a listed company in New York, Hong Kong and Shanghai, China Unicom started to carry out a comprehensive internal control system construction in late 2005, and formulated the "China Unicom internal control system specification" which based on the domestic features and control points. Finally, as a result of the gradually established internal control system China Unicom passed the internal audit of external auditors in 2007. As a communication operation, China Unicom has the typical characteristics of technology-intensive and typical asset-intensive enterprises which mean its capital expenditure accounted for a large proportion of business activities and the long process of capital expenditures, risk areas, and high-risk control features have always been the main focus of internal review and external audit. China Unicom has developed a comprehensive set of internal norms, while the annual internal control reviews, external audit, more or less, there are still having internal control issues, or even long-term problems are not improved. For instance, capital expenditure is not accounted for on an accrual basis, the upside down of construction progress, solid construction turned untimely, and asset card information distortion and so on.Based on the three internal control guidelines which referred to the interpretation and capital expenditures, this paper elaborates the related internal control processes and critical control points of China Unicom capital expenditures, and to analyze the weak links for their views and put forward suggestions for improvement.