Study On The Corporate Internal Control System Establishment Based On The Sarbanes Oxley Act

In the wake of humanity entering into the 21st century, financial corrupting phenomenon appears suddenly day by day. In the USA, after appeared Enron large amount accountant made the trumped-up case in October 2001, one after another presents Xerox Corporation, and Worldcom company etc., as a series of significant accountants to make trumped-up cases in year 2002. Moreover in China, the financial corrupting practices phenomenon becomes the focal point that society pays attention to as well. These financial corrupting practices and cases that accountants creating false information have caused business risk management and internal control draw worldwide attention. While looking at the Sarbanes Oxley Act (hereinafter called the Sarbanes) released in 2001 internationally, has had intense vibration and enormous influence to the US territory and other countries in the US listed companies; domestically in China, Per the investigation from Ernst & Young, about 40% foreign companies that listed on the stock market of the USA could not reach the requirement of 404 clauses of SOX, especially the Chinese companies. Up to ending March of 2005, there were 70 companies from the mainland and HK had been listed on the stock market of the USA, among which, there are Eastern Airline, PLICC and other large-scale state-owned enterprises. Most of these companies could not compliant to the natural environment. In the first two months of 2005, UTSTAR COM, China Aviation Oil, 51 JOB, Sina and other companies were facing lawsuits in the USA continuously with the accusation of providing false information and hiding significant situation. All these incidents indicated the imminence and necessary of establishing internal control system based on SOX for companies of China..The consummated internal control system is the reliable guarantee for an enterprise to achieve operation goals, to ensure production and operating activities of high efficiency movement, to protect the enterprise resources security and complete, to keep the accuracy, the reliability, the uniformity for the financial accounting information, and to raise the economic efficiency, to improve the carrying out of established regulatory policy.This article is for the purpose to unify the BLF Company's actual state of operation, proposal on a target-oriented research set practical and feasible with profession characteristics, conforming to the internal control system's construction plan required according to the Sarbanes.In this article, topic selecting background, researching goals, literature summary, methodology and structure are firstly introduced, by the theory instructed practice, the improvement reality work's significance is pointed out at first. Then via the introductions that the Sarbanes and the enterprise internal control theory with its method, has constructed an actual internal control system for BLF Company unifying the enterprise practice, to conform to the Sarbanes appealed. The construction for internal control system is not only to deal with the internal audit of Sarbanes, but to take Sarbanes as a turning point, the goal is to strengthen the enterprise's foundation management subsequently to promote the enterprise's management capacityThe innovations of the article are:Firstly, the view of researching is new. The establishment of internal control system is based on SOX, which compliant to the current situation and have strong practical purpose. Both the macro circumstances and micro business flow are included in establishment plan, and they are combined with the requirement of SOX clauses. Secondly, the article established a new internal control system aiming at the deficiencies in domestic companies. The ethics and anti-fraud are taken into consideration during establishment.