The Research On Internal Control Environment Of China's Banking

The banking industry was born with a high risk, China's banking industry ended the transitional period of the accession to the WTO and achieve full opening up, ban- king's recurring losses and bankruptcy cases. All of these let us further deepen the un- derstanding and thinking of the bank's internal control. This paper analyzes the bank's position and integral part of the internal control environment. Bank's internal control environment is the cornerstone of the bank's internal control, provides the framework and structure. To establish an effective banking system must have a sound internal control environment as a basis. This paper discuss bank's internal control environ- ment factors under a classification of "Internal control framework stage" and "risk management framework stage". The former includes seven factors: corporate gover- nance and board of directors, organizational structure, integrity and ethical values, management's philosophy and operating style, commitment to competence, assign- ment of authority and responsibility, human resource policies and practices. The later includes two factors: risk management philosophy and risk culture. The paper analyzes the current situation of China bank's internal control environment based on the experience from HSBC, and also put forward proposals and countermeasures to improve China bank's internal control environment. This paper think the bank's internal control environment is still the basis of bank's internal control, and now should pay more attention to the building and improvement of risk management philosophy and risk culture.