Group Companies Focus On The Procurement Risk Of Internal Financial Control Study

With the establishment of global economic integration, the operating environment national group faced becomes increasingly complex, and the sensitivity on the risk of all countries group has improved. The financial crisis erupted in 2007, has already made some prestigious with a few hundred years, such as the General Motors Corporation (GM) bankruptcy. The crisis created largely from Group Risk and failure of internal control, which make us understand that, in the context of globalization, to strengthen our group of financial risk control and risk prevention is very important. Centralized procurement is currently taken by most of the procurement group, but the purchasing process has certain financial risks, that groups control internal financial risk on centralized procurement has a strong focus on of practical significance.This paper focuses on procurement within the group for the topics of financial risk control, centralized purchasing group in China within the financial risks of the system. Firstly, the basic concepts of financial risk,the company and centralized purchasing is beginning. Next characteristics,types and particularity of are analyzed. Both macro reasons and group internal reasons lead to group centralized purchasing financial risks,but group internal reasons are more important. In this paper, advanced foreign experience and practice can be as reference of centralized procurement of China Group Financial Risk Control In the formulation of policy proposals, China groups should be clearly focused on management objectives and principles firstly. In the process of financial risks control, group should improve the management system of centralized purchasing, centralized purchasing, including further optimizing the processes and functions of relevant departments, setting up scientific financial indicators of financial risk and rationally distributing human resources of centralized procurement. COSO internal control basic framework is used In this paper o Step 1,groups identify environment of centralized purchasing financial risks group control, including external environment and internal environment by the methods of SWOT analysis of financial risk control opportunities and challenges facing;Step 2,groups use assess financial risk and identify key risk coordination method, calculating the value at risk; step 3,groups select the appropriate ways to reply with risks(including the payment risk, price risk, safety of assets risk, cost risk) basing on risk management strategies, the last Board of Directors and other senior management should monitor the effect of financial risk control. At the same time, Groups maintain information and communication during the internal financial risk control. Using standardized research methods,seeks to use case studies to reveal the law of group financial risk on centralized procurement, to do theory with practice,so that financial risk control becomes more focused, realistic and instructive.The paper is divided into five parts. The first part is the introduction, the main focus describing the background and significance of group centralized purchasing internal financial risk, review domestic and international research in the overview of financial risk control, and made this point of innovation and the lack;The second part is the theoretical analysis, the main analysis focused on the concept of procurement-related financial risk control, financial risk characteristics and the method of centralized procurement of financial risk control, as theoretical basis of the policy recommendations below;The third part of the main analysis of the current situation of group centralized purchasing financial risk, to explore the underlying causes of these reasons and it will also be the following policy recommendations need to be resolved;PartⅣanalyzes the foreign countries including the United States, Germany and the Group companies in the financial risk control approach, advanced experience of group centralized purchasing financial risk, and the important lesson on financial risks control in China, including group centralized purchasing financial risk;PartⅤputs forward group policy recommendations on centralized purchasing internal financial risk. First of all, objectives and principles group centralized purchasing financial risk should be clearly focused, followed by the control of management system in the group, and finally based on the COSO internal control framework the specific recommendations on group centralized purchasing internal financial risk are proposed.