The Research On The Internal Control Of ISC Company

The concept of internal control is an important sector on modern enterprise management theory, as well as the area on that accounting and auditing making research. The experts started lots of research on this area in recent years, especially after the Enron incident. COSO framework report represent the current highest level in the study of internal control abroad, meanwhile, the domestic internal control system has been established and which is consisted of internal control direct published in April of 2010 and internal control fundamental criterion released in May of 2008. But internal control is very complex and there are lots of difficult problem, which has been studied in connection with the typical situation of specific enterprise. Lots of studies mainly focus on the internal control for listed company so far, and ignore the internal control problem in the joint-venture company, which make the great contribution to the China's growing economy as well. Comparing to sole-enterprise, Joint-ventures has its own operation risk because of the dispute of control power. How to control the operation risk? How to balance the control power between both sides? How to protect fairly the legal interests for all stockholders? How to avoid fraud? How to design a set of efficient internal control system to sustain the long-term development of the company under the principle of cost-benefit? They are the problem that waiting for solved by internal control system.The text proposed a way of establishing internal control environment and the detail process on the basis of analysis of the current operation and internal control status of the company of author's. Hopefully, the paper could help other joint-venture establish their own internal control system.The paper contains six chapters:Chapter one introduces the framework and major thinking of the paper briefly;Chapter two introduces the latest theory of internal control and its development, mainly stresses the five factors of internal control in COSO theory and latest development of internal control theory in China.Chapter three introduces the current background and internal control of the joint-venture, taking specific company as a example, summarizes operation problem and risk point from the perspective of five factors of COSO theory.Chapter four raise a view that good internal control environment is a major point in internal control system. So at the beginning of this chapter, author analyzes the particular risk in the internal control environment and points out the five perspectives of establishment of good internal control environment, meanwhile, also designs the detail internal control process for the working flow of purchasing, sales and production.Chapter five analyzes the cost-benefit for the proposed internal control system and points out the benefit will exceed the cost. Chapter six is the section of summary of paper and points out the contribution and the parts where needs further perfection.