A Risk-oriented Study Of The Internal Control Mechanism

With the development of market economy and the strengthening of the international trend, the risks faced by the enterprises will be more complex. The mission of the internal control is no longer confined to financial control, and the enterprise should also be concerned about all kinds of risks related to them. Therefor, internal control mechanisms of risk-oriented has become an inevitable trend."Internal control mechanism of risk-oriented about listed companies"is the object of the study. Firstly, problems of Internal Control of Listed Companies are analyzed based on the comprehensive risk management framework, including goal setting, control environment, risk early warning and response mechanisms, control activities, information transmission, internal oversight and so on. Then, causes of the problems are analyzed on game theory, corporate governance theory and incomplete contract theory. Some conclusions are drawn as follows: It is obvious that the game between investors and managers is non-cooperative; It is difficult to form a strong power about execution and supervision; Corporate governance with defects has a negative impact on internal control; The incompleteness of internal control contract has been highlighted because risks are ignored. Secondly, the internal control mechanism risk-based about listed companies is reconstructed including definiton, objectives and elements. Some issues are highlightened in this mechanism, such as the dynamic focuses on internal control, participation of all staff, strategic objective, the distinction between "the general risk" and "special risks". This paper also believes these conclusions: Corporate governance does not belong to the internal control environment; It is very important that"special risk"should be identified and responded; The element "self evaluation" should be a separate one.Moreover, Sanlu Incident is analysed based on the six elements of the reconstructed mechanism. we can gain some inspirations: companies should strive to foster a culture of risk, rationalize the corporate governance structure, improve enterprise risk management system, establish a scientific information management system, improve the information disclosure system and internal control evaluation system, strengthen the external oversight. In all, the reconstruction and application of this internal control mechanism may have a positive impact on the practice of the construction of internal control of listed companies.