Research On The Internal Control Of China Mobile Group Qinghai Co., Ltd

The concerns on internal control were originally arising from the need of standardized management and shareholders'demand of objective information about companies'operation, apart from which, the most influential requirement was the auditing of financial statements by Certificated Public Accountants. The governments also show interest in the progress of internal control so as to minimize the impact on the market caused by the frauds and violation by smaller companies. Therefore, the continuous development of both theory and practice of internal control is attributable to the composition of forces from academic communities, vocational organizations, leading companies and governmental offices.Besides, history implicated that significant operation failure and frauds accelerated the development of internal control and the issuance of some important literatures and regulations, among which the best known one is the Sabanes-Oxley Act of 2002 issued in the United States. The article 404 of the act not only required that the management should regularly assess the effectiveness of its internal control, but also required that the certificated public accountants should issue opinion on management's assessment as well as the effectiveness of the company's internal control. The issuance of the act was greatly attributable to the notorious World Telecom and Enron Event.Effective internal control can help a company improve its operation efficiency and effectiveness, protect its assets and ensure the reliability of its financial statements and compliance with regulations. In light of the global trend of emphasis on companies'internal control, this essay intended to carry out a research on internal control's implication on China Mobile Group Qinghai Co., Ltd (CMQH) based on the origin, development, definition and updated theory of internal control, together with Modern Enterprise System's requirement on companies and the current situation of CMQH. The essay also aimed at proposing some solutions with special regard to CMQH's existing deficiencies on its internal control, in order to make contribution to the establishment of its internal control system.