State-owned Enterprises, Internal Control Issues

As an important method of business management, internal control has become one of the hot points concerned by the public. Establishing and perfecting internal control system of state-owned business is the key link of the construction of modern firm system in China. Beginning with the historical survey and the definition of internal control, the paper discusses the target, the theoretical model and the proper level of internal control system as well as the cost-benefit of the implementation of it. And then, after the analysis of strengthening the internal control system in Chinese state-owned businesses, the article expounds the internal control from the angles of business administration, because of the double-arrangement of internal control in Chinese business, thus is, the internal control with both the owner and the manager as the main body, and of the fact that the internal control is usually manipulated by the manager in practice, the internal control of the first arrangement should be externally manifested so as to achieve the special control effect with the aid of external control procedure. Meanwhile, the optimization of capital structure should be paid attention in the internal control of corporations due to the close relationship between the internal controls and the capital market. Finally, the thesis suggests that the business internal control make the whole and the single design based on the frame of the internal control system, proposes the feasible counter-measure perfecting the internal control of state-owned business consists of the standard system of internal control formulated by the government department and the compulsory internal control audit.There are four parts as follows:Part 1, the definition of internal control is determined after the historical survey on Chinese and western internal control system construction, the target of internal control in state-owned business is founded while the theoretical model is preliminary discussed.Part 2, the necessity of enhancing the internal control in state-owned business in China is analyzed from the aspects of macro economic development and the business's own requirement.Part 3, the idea of internal control of state-owned business is discussed from the angle of business administration, the reasons and contents of the external internal control is also proposed. The relationship between the construction of business internal control and the optimization of capital structure is expounded.Part 4, the whole and the single design of internal control system are introduced in detail based on the frame of internal control system, as a counter-measure perfecting the corporation internal control system, the formulation of a standard system and the compulsory audit of internal control is suggested so as to solve the problems of internal control system in state-owned business.