The Research On The Evaluation System Of Internal Control

In recent years, significant economic losses made by the frequent financial fraud cases in domestic and international world lead much more concern and attention about the internal control problems to the wor Idwide. Currently, the main research resu Its of the internal control in the world are the Sarbanes-Oxley Act and the COSO report. In China, the government and re I evant theor i sts have gradua I I y paid more and more attention to the internal control issues and more research on internal control is appearing. In order to strengthen the normative construction of the internal control, the Ministry of Finance and other five ministries have released a series of principles and norms on internal control in 2008 and 2010, which marks that the construction of internal control in China is going to the institutionalized track. A large number of facts tell us that the sound internal control principles and policies established by a company do not mean the internal control system is perfect or the implementation of the internal control is effective. The evaluation of the internal control becomes very important, because it is the guarantee to improve the internal control system and make the effective implementation. The evaluation of the internal control can not only help companies to find loopholes in the internal control and strengthen it, but also establish a sound internal control system and realize the internal control objectives. However, the construct ion of internal control evaluation in currently China is not perfect and the enterprise itself is also lack of attention to internal control evaluation. Therefore, it is necessary to make some research on the internal control evaluation, establish a workable system of internal control evaluation and improve the internal control.Firstly, this paper makes a brief introduction on the background and significance to the research and on the research ideas and methods, analyzing the research status on the evaluation of internal control. Secondly, the paper puts on a series of basic theory of internal control evaluation, including the concepts of internal control and evaluation of internal control, the role of evaluation of internal control and other basic theor ies. Thirdly, this paper builds a basic framework for internal control evaluation; makes research on the objectives, scope, and subject, object, standards, methods and procedures of the internal control evaluation; and achieves the report of internal control evaluation. Fourthly, the paper establishes an evaluation index system from the two aspects of design and implementation of the internal control and obtains an overall score of internal control by the weighted composite method. I n the base of the index system and the overa I I score, th i s part a I so makes a qualitative analysis to determine the integrity of the design of internal control and the effectiveness of the implementation of internal control. Fifthly, this paper constructs an example of ABC Company's evaluation system of the internal control to apply the research results. Finally, the paper draws its conclusions:enterprises should pay full attention to the evaluation of internal control to improve the integrity and effectiveness of their internal control, companies should build their internal control evaluation system on the base of the actual conditions, and that to select the appropriate evaluation index and method is the key to the success of the evaluation system of internal control.