Research On Internal Control Environment Of S Company

With the further development of market economy and the constantly changing enterprise business environment, it has been difficult to rely solely on traditional internal accounting controls to mitigate a variety of internal and external risks an enterprise faces. It has been a common concern for domestic theorists and practitioners to implement a whole process of enterprise internal control in all staff and domains based on a comprehensive risk management perspective. For this purpose, on June 28, 2008, the Ministry of Finance, the Commission, the Audit Commission, CBRC, CIRC jointly issued the "Enterprise Internal Control Basic Norms". On April 26, 2010, the five ministries again jointly issued a corresponding set of guidelines. The integration of the basic norms and guidelines successfully creates a set of enterprise internal control standards, which is adjusted to China's national conditions and rooted in the modern market economy environment, and provides theoretical guidelines'for domestic enterprise internal control construction.The building of enterprise internal control is a dynamic process. The perfect combination of internal control and business practices is reflected in the facts that, it fits the business scales, business scope, the competitive status and the risk level, and it can adjust to, supplement and complete itself with the change of the circumstance. In the construction of internal control system, implementation is the key factor. In the complex factors which affects the implementation of enterprise internal control, the internal control environment is the core of the controlling elements, is the basis of the whole internal control framework. Through modeling the organization's environmental atmosphere, internal control environment affects staff's ideology, determines the tone of the organization activities. Its completeness determines the implementation effectiveness of the internal control system. This article is based on the basic norms and corresponding guidelines. It aims at following up and implementing internal control system of norms. It chooses S, a company has just started running the internal control system, as a research object for the diagnosis of internal control environment.It took S three years to develop the internal control system. It went through three stages, a centralized development, organizational implementation and stress testing. However the implementation results were not ideal after it went on live. Many policies are just like non-existent, and have not been implemented in daily work. Therefore this article starts from S company's internal control system status, understands the internal control environment implementation from questionnaire, and analyses recent internal controls test results. Through the survey it is found that, there are many problems in the implementation of S's internal control system. It has design and implementation defects in internal control environment, governance structure, human resource policies, corporate culture development, and other aspects of control system development, and those affect the whole control system operation. Based on these findings, this article starts from the governance structure, development strategy, human resource policies and corporate culture perspective, researches in current status, identifies problems, analyzes root causes one by one, finds the crux of all sectors, and makes improvement suggestions. Firstly, organizational structure design is unreasonable, it needs to improve the functionalities, establish the necessary functionality commission and implement an effective system of independent directors to adjust. Secondly, it must strengthen the design and implementation of development strategies and control methods, focus on strategic objectives decomposition and implementation. Thirdly, it needs to sort out human resources processes, build up human resources system, improve the employee introduction, usage, training, and leave mechanisms. Fourthly, it needs to build advanced enterprise culture, ideas and businesses in many perspectives to achieve the internal control cultural integration. At last, it needs to implement en effective monitoring procedures to ensure that S's internal control system runs in harmony and stably in the supervision of the internal evaluation and external audit coordination.This thesis uses survey analysis, comparative analysis and other methods to analyze S company's internal control system implementation, internal control environment development to conduct a detailed analysis. It provides improvement suggestions for s'the internal control system, meanwhile it can be used by other companies for similar research reference.