Inquiry To The Theory Of Internal Equilibrium Based On The Theory Of Humanism

The malfunction of corporation internal control is the main reason causing the accounting information distortion and management failure in Chinese enterprises. The evolution of internal control theory from western World has made great confluence to China, particularly ,the complete frame theory raised by COSO committee. Many scholars input the internal control malfunction to the shortage of sincerity education ,imperfection of corporate governance system and weakening of accounting control etc. This paper puts the blame on the limitations of the theory of internal control itself, that is , human should be the key factors in internal control, even the perfect internal control system will go ineffective due to makers' power exceeding and intervention and executors' misunderstanding and collaboration as well. Meanwhile, the conflict between personal and enterprise interest results in deep deviation . This paper, based on the theory of humanism , puts forward a new theory-internal equilibrium ,paying attention to human nature and human behavior, recommending less control and more coordination . The basic theory of internal equilibrium already be well explained, consists of concept, feature, relations and difference between internal control and equilibrium. Specially ,the organizing and personal targets are considered simultaneously instead of single target in internal control. This paper also provides methodologies for design of internal equilibrium systems .In design , three methods, motivation , restraint and process redesign based market value chain are used. The inner and self control of human being are more effective than any other outer control, so the best way to stimulate the human activities and make them take initiative action against evil behaviors is motivation .With the coordination and guidance as the main aim, internal equilibrium system introduces motivation and implies "motivation & restraint ",it is suggested that the practical internal equilibrium system should be established on the basis of investors ,managers and common employees and perfect corporate governance system . In addition, the paper concerns some points in implementation of internal equilibrium, such as how to reform the mode of current accounting system, how to extend the function of internal audit and how to motivate human behavior through budget management . The future of internal equilibrium is self-control, self-management.