The Study On Internal Control System Design Of ABC Group Company

The reasons for successful business are varying but the reasons for failed business are very similar. basically there're two main reasons for business failure, one is lack of internal control and another one is lack of internal company governanceUsing COSO theory's standard and appraisal method and basing on COSO theory's five dimensions, which are control environment,risk assessment,control activities,information and communication and monitoring, this paper examines the design of internal control system of ABC group company , analyzes the major problems in its internal control system and identifies the main reasons behind these problems and at the same time puts forward some improvement proposals against those problems.This paper begins with the introduction of some problems faced by ABC company right now and explains the background for preparing this paper; and then reviews the development of related internal control theories; analyzes the status quo of internal control system in the enterprises from both China and oversea; and then analyzes the internal control system of ABC company in details using COSO's definition of internal control sysem , which defines internal control as five integrated parts: control environment,risk assessment,control activities,information and communication and monitoring. identifies the key problems in ABC company's internal control system and the main reasons for these problems and at the same time recommends to take some measures to make improvement; to conclude this paper that in most cases there're two main reasons for internal control failure in business, either the design of internal control system is unreasonable, which can't meet the requirements of COSO's internal control theory or the internal control system can not be implemented strictly following original design. At the end of this paper, it also provides some suggestions on how to improve internal control system for Chinese companies.One of the originalities of this paper is that it goes beyond the definition of internal control system stipulated in China's independent audit standard and uses the COSO's internal control theory to analyze a Chinese company's internal control system in a systematic way.