The Study On Business Internal Control Mechanism Based On Business Process Re-engineering Perspective

ABSTRACT:With the issuance and implementation of the Basic Standard for Enterprise Internal Control and the Implementing Guidelines for Enterprise Internal Control, Chinese companies need to establish and improve internal control mechanisms, while implementing management change by business process reengineering in the face of external pressure of market competition However, neither business management nor the accounting profession have clear understanding on the relationship between internal control and business process reengineering. Therefore the dissertation tries to probe into business internal control mechanism based on process re-engineering perspective after analyzing the relationship between them, and introduce a case on SH listed company who implemented business process reengineering and ERP system in order to provide new solutions and recommendations on how to improve business internal control mechanism. The following conclusions and recommendations have been provided by the dissertation.(1) Internal control and business process reengineering are closely linked in terms of division of labor, process design and information technology, but there are many differences in terms of the pursuit of goals, tools and methods, organizational structure, staff requirements and authorization way between them.(2) In spite of such differences, the cost-effective principle, multiple objectives included in internal control, and risk-based internal control mechanism make it necessary and technically feasible to strengthen internal control mechanism from the perspective of business process reengineering.(3) The business process reengineering will fundamentally change the business risk map, therefore, the major solution to strengthen internal control mechanism from the perspective of business process reengineering is re-identify and assess the risks faced by the enterprises, and redesign and Implement key internal control activities to deal with significant and important risks.(4) In the implementation of business process reengineering, basic requirements of internal control should be taken into account, and the business process reengineering and ERP project should be accompanied with the internal control project.