The Research of Internal Control for M Company
|School||Dalian University of Technology|
|Keywords||Internal Control System design Corporation governance|
Internal control system of internal control is a combination of various elements of the contents of a whole, is an important part of enterprise management. The quality of the internal control system within the enterprise management level is a manifestation of a direct impact on the company’s strategic development. According to the Deloitte2012GEM IPO application failed companies found that most companies failed in the final analysis is due to inadequate internal controls. M Inc. is a private enterprise, the rapid development is in the pursuit of its business, while the internal management has been ignored, the internal control system is relatively weak, and there are some imperfections. With the application GEM IPO process progresses, the internal control system problems gradually exposed, there is an urgent need to improve the internal control system in order to achieve the IPO examination requirements.There are5chapters in this paper, the author introduced research background and summary,framework and the thinking method in Chapter1. the author described internal control theory and development at home and abroad in Chapter2. Chapter3raised and analyzed the main problems according the M company present situation, pointed out the need for entire internal control system. Chapter4suggested how to perfect the internal control system according to the problems. Finally obtained the research conclusion in Chapter5。In this paper, we based on the theory of internal control, study the M current situation of the company’s internal control, raised the company’s internal control in the governance structure, procurement activities, sales activities, inventory management, imperfect, poor communication, internal supervision mechanism is not perfect and the problem of lack of risk assessment mechanism. For M Company’s internal control analysis of the main problems come to its relatively weak internal control system, M company should improve the overall internal control system. Accordance with the "basic norms of internal control" and supporting the requirements of the guidelines, in the framework of internal control elements, improve the internal control environment, optimize key control activities, information sharing in order to fully open communication, improve the supervision mechanism and the establishment of a risk assessment mechanism. The paper raised a workable idea and process control optimization suggestions key business procurement activities, sales activity and inventory management, developed a strategy for establishing assessment system of risk. This article solved several problems on how to improve and perfect the internal control system. First, it solved the problem of corporate governance structure in company M,by strengthening to the management training, improving internal control awareness of the management, it improved the initiative, so that the internal control implementation ideas can really come up to the company’s business management. Chairman and general manager mustn’t be all in one and strengthen the power of the board and the supervisory committee by separating decision-making power, operation rights and superintendence, and then to improve the internal control environment and reduce the business risk. Second, through the procurement, sales and improvement of inventory management system, it solved the issues of inventory backlog, sluggish sales and inventory capital occupation. Thirdly, by setting up several lines of communication between the subsidiary companies and head office to resolve the problems of communications, and then reduced the risk of business operation and decision-making. Fourthly, through strengthening the routine supervision and special supervision, to develop standards and conduct internal defects identified internal control self-assessment, and deepen the internal control oversight role, changing the company failed to give full play to the effectiveness of internal control issues, deepen the role of internal control supervision. Fifthly on the lack of risk assessment mechanism, the paper developed a risk assessment mechanism procedure. It’s useful for M Company establishing a risk assessment mechanism.There must be deficiency and faultiness in this paper for lack of time and the limitation of the author’s knowledge. The author hopes to keep on researching in practice for future.