Research On The Fixed Assets Intemal Control System Of YinCheng Automotive Company Ltd.

With the increasing living standards, residents'disposable income reached a relative level. Since 2002, a major expansion came into the family car market, and the automobile industry's position in the national economy increasingly was prominent as a major force in the national economy. It played an irreplaceable role for booming markets, expanding employment and promoting the development of related industries.However, in 2008, facing the sudden international financial crisis and natural disasters, the central government launched the macro-economic controlling policy, which leaded to the downward trend in auto market. China's economy is facing new challenges of sluggish external and domestic demand. In order to confronting the dramatic changes in the environment and improve the economic efficiency of enterprises, it is not enough to have the competitiveness of their products, but to rebuild this competitive system of management. Therefore, improving their internal control system and business processes will provide a powerful guarantee to enterprises to confront the new challenges.This paper relates to the theory of internal controls and norms; focuses on the fixed assets management of YinCheng automotive company Ltd. as the object of study; analyzes the YinCheng 's existing internal control system of fixed assets; launches a project for resolving practical problem and improving the existing internal control system.This paper includes five chapters. The first chapter mainly introduces the general development situation of YinCheng automotive company Ltd. and its present condition in the fixed assets internal control system. With the development of YinCheng automotive company Ltd., the fixed assets owned become huge in amount day by day. As to it's fixed assets'managing, YinCheng company has already divided the function of each department, and built up 11 related internal control systems: Invest,expenses application and approval control system,the former phase of purchasing fixed assets management internal control system , building, public service, infrastructure engineering management internal control system,the balance of accounts examine on building, public service, infrastructure engineering internal control system,fixed assets stocktaking internal control system,Retired fixed assets dismantle and move management internal control system,Disposing retired fixed assets internal control system, the fixed assets in last phase internal control system,the fixed assets in using phase management internal control system. It is true that YinCheng company has built up the internal control systems in certain scope, but some phenomena, such as, the weak management of fixed assets, ineffective execution of the established internal control systems and the absence of some internal control systems still exist because of the huge amount of fixed assets and the numerous departments it involves. Consequently, for keeping and strengthening the competitive power of a company and adjusting to the rapid variating external environment, strengthening the management of fixed assets becomes increasingly urgent. The second chapter, combining internal control norm in the business enterprise and other related regulation, analyzed the existing internal control system of YinCheng Company. It concretely analyses the purchase of fixed assets, the cost consultation on the constructing type of fixed assets, the daily management of fixed assets, the disposing of retired fixed assets etc so as to identify the existent blemish, leak among them. The purchasing fixed assets internal control systems mainly check the improvement of the security and efficiency of company funds, the professional qualification and the service quality of the suppliers etc. About the cost consultation on the constructing type of fixed assets, it mainly analyzes the budget establishment of the consultation work, the punishment of consultation work and the election of cost consultation organization etc.. The daily management of fixed assets internal control systems then analyzes the exiting problems and places that need to further perfect from the temporary estimate on the construction in progress, statisticsing analyzing and following managing on the construction in progress, and from the aspects of fixed assets checking and accepting, fixed assets depreciating, fixed asset stocktaking, fixed asset devaluation etc. The third chapter then concretely perfects the involved internal control systems of the construction in progress, including the fixed assets purchase stage, related amount of money payment, the cost consultation on the constructing type of fixed assets, the fixed assets following managing, the fixed assets checking and accepting etc. The forth chapter is further to carry on an improvement to that internal control systems of fixed assets stage involves, including fixed assets devaluation, fixed assets depreciation, fixed assets stocktaking and retired fixed assets disposing etc. .On the bases of problems and leaks discovered in chapter 2, and combining the circumstance and the YinCheng Company's business characteristics, Chapter 3 and chapter 4 put forward the concrete measures to avoid the risks. In addition, measures to complete and perfect the fixed assets internal control systems of this company are offered in these two chapters. The fifth chapter introduces the problems that internal control systems performance should notice, and the effect of the improved internal control systems. Firstly, the establishment and perfection of internal control systems is a progressive process that should be carried out step by step. The enterprise should correct, perfect and add the internal control systems according to the variation of the circumstance, lately appeared problems and related policies and laws. In addition, enterprise, needs to properly deal with the relations of the parties concerned in the progress of carrying out internal control system .To the main factors that can influence internal control system establishment and effective implementation: internal control environment, risk valuation, risk identify, control measure, information communication, inspect and check, the enterprise should build related systems to guarantee that the established internal control system can be effectively carried out, and to ensure the time limited efficacy and legality of internal control system. Secondly, this chapter introduces that after the implementation of new internal control system, the company obtained the initial effect on the fixed assets management, raised the efficiency and benefit of the management of the company, reduced work delay resulted from the vague responsibility, and the occurrence of subjective behavior etc.An enterprise's internal control system needs to cover all business activities. Thus, it requires: the framers of internal control system could identify the key risk management control points; and to establish a comprehensive, strict internal control system, aiming to risk control in the weak corporate governance links, by analysis. First, it improves the internal management level of enterprises, and the efficiency of corporate management and capital efficiency. Secondly, it prevents errors and moral hazard, and avoids subjectivity and arbitrariness of the relevant personnel in dealing with specific business. Thirdly, it reduces audit risk. Enterprise checks risk points by their-self and develops the related control system in order to reduce the problems exposed in the external audit, pushing enterprises far from a passive position.The internal control system of fixed assets that this paper studies covers each aspect of the fixed assets management. It has the highest instruction to the processing of YinCheng company related business. It is useful for raising the efficiency of fixed assets management of a large business enterprise. In addition, it regulates a canonical and effective control method on the complicated fixed assets management.