Internal Control Application In X Rural Commercial Bank

Banking makes profits through businessing risks, so it is a high risk industry. And therefore, to banking institutions, the internal control is their lifelines; to weak internal control, risk management, rural commercial banks behind even more so. X Rural Commercial Bank is in the original rural credit cooperative association, based on a natural person, co-sponsored by domestic non-financial institutions to establish the formation of joint-stock commercial banks. Since X City commercial operation of rural commercial banks relatively short time, not really to establish a scientific incentive and restraint mechanisms, not yet established compliance risk management organizational system, the risk concept has not yet penetrated into every part of an operation and the daily behavior of every employee, the risk work remains to consolidate the basis of management, risk management and control to be improved.This article is based on this background, rural commercial banks, from the X's present situation of internal control, based on the perspective of risk management, internal control of their situation are the main issues in-depth analysis, try to explore the deeper reason behind the problem, and on this basis, put forward measures to improve its internal controls and recommendations to the construction of the internal control line for reference to play a certain role.This article is divided into six chapters, each chapter summarized as follows:Chapter One Introduction. This study describes the background and significance, research ideas and framework, and also the research methods, contributions and deficiencies to be a brief introduction.Chapter Two Commercial Banks Internal Control Theory. This chapter first study of internal control at home and abroad, domestic and internal control of commercial banks, rural commercial banks in China of the three aspects of internal control research literature are reviewed; then outlined the content of the internal control of commercial banks, objectives and composition of its five elements: control environment, risk identification and assessment, control activities, information exchange and feedback, supervision and evaluation and correction mechanism; Finally, risk management,.internal control and discusses the relationship that the two have identity.Chapter Three The Analysis of X Rural Commercial Bank's Current Internal Control. This chapter first introduces the basic situation of X Rural Commercial Bank; and credit risk management from the status quo, status of operational risk management, financial risk management status, status of the four aspects of internal audit status of its internal controls were analyzed.Chapter Four The Main Problems of X Rural Commercial Bank's Internal Control. The rural commercial banks on the X status of the internal control analysis, found mainly in the accounting internal controls, risk management, internal audit three obvious problems:(1) internal accounting control the main problems are:the accounting processing operations are not standardized, resulting in widespread distortion of accounting information, information quality is not high; accounting system is not sound, the accounts within a certain range of sources of funds and loans to invest in no longer reflect the true manner; overall quality of accounting personnel is not high, poor awareness of the management accounting control, leading to failure of accounting control; internal accounting control means updates the accounting system can not keep up, resulting in internal controls resulted in numerous accounting new problems.(2) risk management, the main problems are:poor awareness of risk prevention staff, leading to the implementation of risk prevention measures are not in place; risk warning inadequate risk management system construction is not balanced; risk of inadequate use of quantitative indicators, only the overall risk of analysis and analysis of the change of the figures.(3) In the internal audit the main problems are:lack of independence of the internal audit department and the authority; low quality auditors, internal audit means backward; audit target range is not wide enough, the lack of adequate oversight of management. Chapter Five Reasons of X Rural Commercial Bank Being Less Developed. Chapter Four analyzed for the problem, the part of the exploratory analysis of the reasons behind these issues, specifically including the three aspects:the reasons for the weak accounting controls, inadequate risk management reasons, the reasons for lack of effectiveness of internal audit.(1) The weakness of the reasons accounting controls are:accounting management foundation is weak, insufficient attention to management accounting control; incentive and restraint mechanisms accounting control deficiencies, can not fully mobilize the enthusiasm of the staff.(2) the reasons for inadequate risk management are:risk management structure is not enough scientific, linear organizational structure and lack of effective monitoring of management processes; talent is scarce, the quality of staff is not high, resulting in risk management methods are backward; performance appraisal system in one-sided emphasis on the design of performance appraisal, do not attach importance to risk management.(3) the reasons for lack of effectiveness of internal audit are:bank's internal audit department did not realize the importance of the internal audit department functions as a general; audit concept obsolete, only to meet the authenticity, compliance checks requirements; internal audit staff access standards and assessment mechanism is not perfect.Chapter Six Measures and Suggestions to X Rural Commercial Bank's Internal Control. ChapterⅤanalyzed for the problem, obtained in Chapter VI of the reasons, based on the control of the part were from the accounting, risk management, internal audit the three aspects of countermeasures and suggestions.(1) To strengthen internal accounting controls. Establish a sound internal control system of accounting in order to plug the loopholes and prevent risks; standardized accounting practices, strengthen the supervision of accounting work to ensure the authenticity of accounting information; improve the accounting system to reflect the true all-round business; the use of modern strengthen the management of information technology, accounting control; improving the incentive and restraint mechanisms to fully mobilize the enthusiasm of accounting personnel; innovative accounting internal controls to meet the rapid development of business. (2) Strengthening risk management. First, science-based risk management to build the organizational structure, established the Risk Management Committee and Risk Management Department; gradually build to meet their actual credit risk measurement index system; established hierarchy of accountability and loan officers, regulate conduct due diligence of credit; reform, reform of performance appraisal system, the emphasis on risk management assessment, efforts to cultivate good risk management culture.(3) Improve the internal audit work. Improve the status of internal audit department, the board of supervisors will be placed under the management of internal audit departments to ensure the independence of internal audit; develop audit areas, deepen economic responsibility audit period; improve the audit approach, the on-site and off-site audit of audit approach and effective combination of the ex ante and ex post audit and the combination of things in the audit; improve internal auditing techniques, the implementation of risk-based audit; the introduction of high-quality talent, improve the overall quality of internal audit.Conclusion drawn in this article Measures and Recommendations of improving X Rural Commercial Bank's internal control are summarized.Throughout the text, the contribution of this paper is to:Based on the risk management perspective, through the X Rural Commercial Bank to analyze the situation of internal control, the discovery of X within the control of commercial banks in rural areas the main problems and shortcomings and to explore its causes and proposes a number of specific measures and recommendations on the rapid development of rural commercial banks, X-perfect internal control system has certain reference value.Given the level of research and experience I gained limitations, there are still many to be further improved this place, I implore of teachers and students let me know. I will also do more detailed research in this content in the future.