Research Of Internal Control Of Operation Risk

With the change of international economic environment and development of globalization, China's enterprises have been confronted with complicated and volatile pressure and challenges. Therefore, how to respond to the changeable external environment has risen to be one of priorities of enterprises. Given numerous losing cases of big state-owned and listed companies, enterprises come to realize that they have to strengthen risk management, establish and improve internal control system to reach operation goal and improve competitiveness. Internal control system can be regarded as bones and blood of modern enterprises, playing no substitute role in maintaining healthy corporate operation. However, internal control policies, theories and practice of enterprises in our country still bear many deficiencies, which are called"short board"in"Wooden Barrel Theory"and"weak link"in"Law of a Chain". According to the theories, short board decides how much water a barrel can contain and the strength of a chain relies on a weak link. Therefore, the defects of internal control system of Chinese characteristics bring about failure of effectiveness. Without a doubt, implement is the key for success no matter which mode the internal control management takes. Enterprises need to set up suitable policies and procedures of internal control, which are in accordance with their own characteristics, under China's internal control framework. To pursuit high profit is the final goal of enterprises, but they are bound to face various risks in operation. For this reason, companies pay more and more attention to risks on their way of seeking high return and accomplishing development plans under the guidance of"return and risk coexists". Consequently, risk internal control management comes into existence when companies bring internal control management to a high level.Based on COSO's new report Enterprise Risk Management–Integrated Framework, this dissertation explains the importance and significance of risk internal control management system within modern enterprise structure and brings forward the view that the build of internal control management system under the framework of risk management requires sound internal control environment, positive corporate culture, common awareness of risk management by all staff as well as clear risk management strategies and improvement of corporate environment. In addition, this article also analyses the risk and crisis faced by current state-owned enterprises, presents advice on how to prevent risk based on reality, and next explains procedures of risk internal control management and key points which need special attention. To gain profit and to prevent certain risks as well, to actualize objective on one hand and to reduce cost on the other hand are the design principles of risk internal control procedures.Corporate internal control management building is a long-term and enduring task and it will get adjusted and improved along with the development of enterprises and the change of market. It is a management tool which can be effectively implemented with full participation of leaders of the enterprises. Therefore, to establish risk internal control system is a subject we have to be good at as participating in the world economic activities. Only after enterprises have established internal control system of Chinese characteristics built suitable risk control procedures and improved management can they succeed in the fierce competition and establish China's competitive position in the world economy.