Research On The Accounting Operational Risk And Control Of Commercial Bank

In recent years, a variety of issues are caused by the lack of internal control. Theorists and corporate management have attached great importance to these issues. Generally speaking, operational risk includes weak enforcement of the internal control, man-made fraud and ultra vires acts, information technological and equipment problems, external regulation and environmental issues. Operational risk management of banks is an important part in the global economic integration. In2004, the Basel Committee in the New Basel Capital proposed a framework system which includes operational risk in the venture capital and operational risk measure standard, and they pointed out that the operational risk, the market risk, and the credit risk were the three major risks of banks.With the increment of high risk incidence of commercial banks in China, operational risk management has become more and more important. However, accounting operational risk in recent years results in lots of huge economic and reputation losses, which put banks in a harsh situation. Since operational risks are usually caused by individuals, systems and procedures, the key point to resist operational risk is to construct a internal control system.Now banks of China are in a transform period, the practical application is far behind the management of credit and market risk. Especially, the definition, measurement and control of operational risk are not integrated into a unified theoretical system, and there are still some problems such as weak supervision, indefinite management rules. This essay contributes to the research on the operational risks in commercial banks. It comes up with scientific and sound measures on prevention and management of accounting operational risks towards many problems existed in the operational system. It also presents detailed measures and applicable managements for the easily formed risks with the hope that these measures could pull the accounting operational risks to a low rate in an effective way. Combined with the theoretical analysis, this thesis consists of six chapters:The essay contributes to the research on the operational risks in commercial banks. It comes up with scientific and sound measures on prevention and management of accounting operational risks towards the many problems existed in accounting operational system. It also presents detailed measures and applicable managements for the easily formed risks with the hope that these measures could pull the accounting operational risks to a low rate in an effective way.Part I:Introduction. This chapter introduces the research background, literature review, research ideas, as well as the main contribution of this essay.Part II:Literature review section.By which it points out that the management of accounting operational risks should be guaranteed by a sound internal control system. It highlights the interrelation between operational risks and internal control. It lays a solid foundation for the presentation of theoretical contents and solutions.Part III:Overview of commercial banks accounting operational risk theory. On the basis of "The New Basel Capital Accord", this chapter makes a theoretical analysis on the definition of operational risks of commercial banks, the theory of accounting operational risks and the internal control theory. It gives detailed presentation about the accounting operational risk which is regarded as an important part in a risk prevention system.Part IV:The analysis on the accounting operational risk control of commercial banks in China. It devotes to the presentation of many common problems existed in the accounting operational risk management. At the same time, it gives an introduction of the interrelation between operational risks and internal control, providing theoretical foundation for the application of internal control to solve operational risk. It concludes that the internal risks control is the main approach aimed at solving accounting risks.Part V:Countermeasures on accounting operational risks of China’s commercial banks. Based on the analysis of the status and problems of accounting operational risk management, this chapter is mainly to create a good environment for operational risk, optimize the accounting operational risk assessment tools, and establish a sound system of accounting internal control measures. The author hopes that these measures can contribute to making banking system developed more well and competitive. Part VI:Case Studies. This chapter selects a detailed case in the accounting perspective to illustrate the internal control. By the profound analysis of the background and the existing doubts of the case, it enlightens the prevention and management in accounting operational risk of the banking system.Finally, the auth’or puts forward the conclusion and gives an outlook about the future.In this paper, innovations and contributions are listed as follows:(l)This article puts forward the definition of accounting operational risk and its characteristics. When taking accounting operational risk and internal control into consideration, the author proposes the perfect internal control system and accounting operational risk measures, with the hope that it can provide more effective protection against operational risk in banking accounting. So this article especially devotes one chapter on the contact of the operational risk and internal control in order to give a theoretical foundation to the full text of research.Banking is an industry full of risks. Almost all the business can not be separated from the accounting practices, which makes accounting operations become the high risk areas of banking activities, and also the very difficult part for scientific management and prevention to deal with. In this article, the accounting operational risk is aimed at solving the problems in China’s commercial banks. Under the combination of the accounting practices, internal risk control system and the manifestation of the accounting operational risk, this essay proposes to create a good environment of accounting operational risk control, to establish the organizational structure and to perfect risk control system by optimizing risk assessment tools in order to ensure the safety of the banks’operation.(2) Taking Qilu Bank for example, the essay gives a detailed analysis about its occurrence, process, reason and results and exposes the problems existed in internal control of banking. It works out a solution to the problem, and emphasizes the need of a certain internal control environment and a internal control system, with the expectation that china’s commercial banks will focus more attention on the accounting practices, the risk of internal control system, which formed a strong guarantee of the management in modern enterprises.The essay has shortcomings, too. As the author’s ability is limited and the influential factors about accounting are complicated, the understanding of the relevant information is not accurate enough. For example, there exist some defects in accounting operational risk measurement and the quantification of control research. Besides, it fails to propose comprehensive assessment approach to build the inner accounting operational risk assessment model of commercial banks. And the understanding of the case is not perfect. All of these issues need further in-depth consideration and study.