Research On The Capacity And Mechanism Of Internal Control Of Securities Company

The positive operation of the stock market is important to the safety of the national economy, the standard stock market is advantageous to guard against the risk and advantageous to promote the market's development, is advantageous to exert various functions of stock market and even advantageous to protect most investors'legal benefits. After entering WTO, domestic securities companies not only must face domestic competition, but also must face the challenge of the abroad investment bank, it is urgent for the domestic securities company to strengthen the risk control and enhance the core competitive ability .These years, many security companies are closed or taken- over for losing management control and rough operation. Normal operation and healthy developments of the securities companies is assured form strengthening the external supervising and enhancing the internal control, the development of the foreign securities company practices that: even though the external supervising is surely very important, the securities companies'construction of internal control is a critical measure. Strengthening internal control system of securities companies has already become important topic in our country. This dissertation tries to systematically analyse the capacity and the mechanism of the internal control from the angles of risk management and perfecting process based on the research literature.This dissertation is divided into five parts:The first part (Chapter I) is the theoretical basis of the study. The chapter first reviewed the development of the internal control theories, We can see that the development of the internal control system has experienced the process of system view - process view- risk view, it revealed the nature of internal controls is identification, assessment and management against the risk; For securities companies, the risk is everywhere, which makes the risk control of securities companies become the core of the securities company's internal control. The second part (Chapter II) is the conceptual basis of this dissertation. This chapter defines the concept of the internal control capability and internal control mechanism, discusses the constituent elements and the mutual relationships between them. This dissertation maintains that the internal control capacity is the kind of capacity which can design and implement the internal control, the existence of such a capability would enable the integration of internal control, and better reflect the inherent logic of internal controls and operational law. Such internal control capability should include four aspects: risk identification and assessment capabilities, risk control and coping ability, information communication and feedback capability, internal control monitoring and evaluation capacity.。Internal control capacity reflects the internal control mechanisms'design and implementation. Internal control mechanisms should be established from accrual mechanisms, organizational mechanisms, risk management mechanism, monitoring and evaluation mechanisms.The third part (the chapter III, IV and V) is the main parts of study. The third chapter studies the internal control mechanism's innovation from the perspective of the securities companies'risk management. the innovation of internal control mechanisms in securities companies should be established by constructing risk management view, introducing chief risk management officer, establishing the risk immune mechanisms and feed-forward mechanism, as well as taking advantage of the advanced technological means of VAR and BMP; The fourth Chapter further studies how to improve internal control capability from securities companies'business process and funds process. Internal control capability's formation and promotion not only needs a sound internal control mechanism, but also needs to design scientific and reasonable control procedures and methods from the process level. The third chapter and fourth chapter study the internal control mechanism's innovation from the dynamic perspective. And the fifth chapter evaluates the securities companies'internal control and internal control mechanism from the static perspective. The chapter constructs the internal control comprehensive evaluation system on the basis of defining the concept of the internal control capability, and introduces the Balanced Scorecard evaluation into the internal control mechanisms evaluation; the chapter tries to establish a series of feasible evaluation mechanism for the internal control capability and internal control mechanism evaluation.The major innovations of this text are as follows:1.This dissertation defines the scientific concept of the internal control capacity of security companies from the angle of risk management, analyses the components of internal control capacity,builds the systematic ensuring mechanism and paths.2. This dissertation introduces the immune mechanism into the internal control, regards the securities company as a complicated self-adoption system, regards the internal control as its immune system, which not only simulates the internal control framework of organ-action-element, but also quotes the advanced theory of system science and design a new internal control model-- immune internal control that fits the securities company's new operation environment.3. This dissertation deeply and delicately explores the perfect of business process and fund process of securities companies and puts forwards the paths of enhancing capacity of internal control from the dual angles of marketing and risk.4.The enhance of capacity of internal control and innovation of internal control mechanism needs a series of complete valuation system of internal control. This dissertation constructs the valuation system and methods of the capacity and mechanism of internal control of security companies,and introduces the Balance Score into the valuation mechanism to provide a proper program for the practice of the valuation of internal control.This dissertation also has some defects, this study is just from the angle of the securities company, but the internal control is a complicated system which needs the participance of the policy establisher and supervisors. Moreover, the internal control's design principles, finance indexes and mode lake of data to support. Therefore, this dissertation also needs to be continuously improved and complied in practice.