Lafarge Chongqing Internal Control Framework Research

This world is experiencing an irresistible trend of economic globalization. Since China has become a member of World Trade Organization (WTO), we have to comply with the international rules and regulations. Consequently, we are facing increasing demand for the advanced internal control theories and practices from developed countries as the intensity of international competition grows. However, there is a big gap with regard to both the development of internal control concepts framework or standards and current level of internal control of enterprises between China and other developed countries such as the United States, and such a gap hinders the proper development of the enterprises. This thesis shows the differences in theories and practices between China and other developed countries attempting to provide suggestions to replenish the gap. This thesis also systematically introduces and reviews the latest development of the theories of internal control. Furthermore, this thesis shows the current status of the internal control in Lafarge, provides a discussion on the underlying reasons which lead to a low level of internal control in group, and demonstrates the applicability of the new theories of internal control in Lafarge. Based on the above analyses, this thesis gives suggestions regarding how Standards of Internal Control and internal control of enterprises in Lafarge can be improved.This thesis consists of five chapters. It firstly describes the development process of internal control from a historical perspective, generalizing the role played by non-government professional organizations during such a process. This thesis then analyzes the internal and external factors prompting the evolution of the concept of internal control. Such evolution-factors-analyses pave the way for a further discussion of related theoretical and practical issues in Lafarge. This thesis also discusses the ex post effects of US Sarbanes-Oxley Act(SOX) and the responses from supervision departments and non-government professional organizations. Moreover, this thesis scrutinizes the latest development of the theories of internal control—Enterprise Risk Management—Integrated Framework (ERM). Following the line of above analyses, the thesis concerns internal control issues in Lafarge. In this part, this thesis introduces the background and more than 20 internal control rules made by relevant institutions, analyzes the current situations of enterprises'internal control by ERM and its shortcomings. Finally, this thesis demonstrates the possibility of applying ERM in Lafarge, gives several suggestions on how to improve Standards of Internal Control, and how to build and enhance enterprises'internal control utilizing outsourcing method in group. The author hopes this thesis could have some effects in accelerating the development of both internal control theories and practices in Lafarge.