Research In Inside Control And The Risk Of Security Company

The risks of security companies in our country have been constantly occurring in recent years. For example, some security companies such as Anshan Security, Fuyou Security, Dalian Security, Xinhua Security, Southern Security and Dapeng Security were either canceled, closed, security broker' s business or taken-over by CHINA SECURITIES REGULATORY COMMISSION because they peculated customers' large amount asset and could not completely pay the capital to customers. Some other security companies have produced over high risks and they could not effectively hedge them. All these seriously affect the steady development of our country' s security market. The intensive occurring of risks in these security companies reflects that there are some problems in their risk management, such as the low management level and the weak inside control. This thesis intends to analyze the gap and deficiency of security companies of our country to foreign country' s by introducing the types, causes, identifying and measurement and bring forward some ideas and advices of the basic frame of the systems of inside control in security companies and risk pre-warning index of our country.This thesis consists of four parts. The first part mainly summarizes the domestic and overseas' research of risks of security companies, analyzes and introduces the definitions, causes, identifying and measuring methods of eighty types of risks, including market risk, credit risk, liquidity risk, operational risk, law risk, system risk, accounting risk and deregulating risk. The second part analyzes the current situation of risk inside control of our country' s security companies including the aspects of corporation administration structure, business operation and management, accounting settlement and monitoring, electronic systems and inside audition in order to reveal the main problems and weak points in these aspects. The third part introduces risk control methods of American financial organizations including risk control systems, risk management policies and operation procedures, risk pre-warning indexes and evaluation tools by using the example of the Chase Manhattan Corporation, and demonstrates that the main differences of risk management of our country' s security companies are that they lack clear corporation mission, have not linked the long term company development to risk management, have not sound corporate administration and lack legal culture, use inside person control, lack effective risk pre-warning index systems and control methods, have not connected the expected return torisk enduring ability and lack a set of upper-to-lower risk control system. The fourth part brings forward the specific countermeasures and advices of consummating risk control of security companies of our country on the base of the above mentioned problems and the conclusion of international analysis. The first is establishing accurate corporate development position, setting up cautious corporate overall risk management, putting the sense of risk management to the inside control of all the business by constructing the linkage between corporate risk management strategy and business mission strategy. The second is setting up perfect risk inside control system of security companies, enforcing the responsibility of shareholder board and trustees. The third is making clear the specific responsibilities of directorate, business departments and monitoring departments, and carrying on the encouraging policy and inside authorizing mechanism in order to raise the risk sense of corporate staff, link benefit of staff to risk control and avoid ethic risk. The fourth is setting up scientific risk pre-warning index system through both aspects of figure and word on the base of sufficient research of risk type of facing, corporate risk preference, expected return and risk enduring ability so as to pre-warning and evaluating the risks which company' s every business faces.