To Enhance Corporate Value-oriented Internal Control Study

Since the enactment of Sarbanes-Oxley Act, Internal control issues have been the theoretical and practical research focus. The Basic Standard for Enterprise Internal Control and the Implementary Guidelines for Enterprise Internal Control improve the standard system of internal control, which is important for preventing corporate risk, improving corporate governance and promoting sustainable development.The ultimate goal of enterprise development is to enhance corporate value, and pursue value maximization. As an important means of strengthening enterprise management, internal control should service for the ultimate goal of enterprise development. Traditional financial reporting-oriented and risk management-oriented internal control promote the development of enterprise management to a large extent. However, both of them also have deficiencies. They pay little attention to the value of the enterprise, but emphasize too much on the safety of financial statements. The attitude towards risk is so conservative that enterprises often miss opportunities to develop. This requires a new-type internal control which consists with the goal of modern enterprise. As an opportunity, the paper put forward the enterprise value-oriented internal control.The point of view needs theoretical support. This paper introduces the basic theory of internal control and enterprise value, enterprise value refers not only the economic value, but also customer value and social value, which pave the way for the path of how internal control enhance enterprise value. Internal control and enterprise value have great relevance, fundamentally speaking; the purpose of internal control is to increase enterprise value. Furthermore, According to control theory, resource-based theory, contract theory, the cash flow model and the respective level of internal control, the paper demonstrated the relevance of internal control and enterprise value which provides theoretical basis for enterprise value-oriented internal control. Because traditional financial reporting-oriented and risk management-oriented internal control have deficiencies that we can develop enterprise value-oriented internal control. It absorbed the favorable factors of the former two and it is more suitable for the goal of modern enterprise development. Continue to use the five elements of COSO internal control framework, the paper constructs enterprise value-oriented internal control framework from the control environment, risk assessment, control activities, information and communication and monitoring, the content of each elements changed. Finally, the paper proved the practical significance of enterprise value-oriented internal control from the development strategy, organization structure, corporate culture, social responsibilities, human resource policies, internal control information and so on. Thus, the entire paper forms a complete system.