The Research On The Internal Control Of KC Company Based On COSO Perspective

In front of increasingly fierce market competition, complex and changing macro environment and policy, and uncertainty at any time, how to improve core competency, realize strategic objective, and guarantee the healthy, sustainable, and steady development of the enterprise is the problem that every enterprise encounters. The reasonable internal control and effective operation is the fundamental measure to improve risk prevention ability and realize strategic objective of the enterprise.Internal control refers to all policies and procedures applied by the organization to realize business objective, improve efficiency and effectiveness of organizational operation, guarantee the reliability and accuracy of financial report, and guarantee the compliance with laws and regulations, which is the management system that the enterprise leaders and relevant staffs in all management departments contact and restrict each other during the treatment of production and business activities, including a series of necessary measures applied to guarantee the normal operation of the enterprises. Currently, internal control has been a key component of current enterprise operational management, while internal control strengthening the enterprise becomes increasingly mature in the world as the key measure of enterprise governance in developed countries. Domestic researches on internal control mainly focus on the establishment of internal control system, but there are insufficient researches on the optimization measures of internal control.Therefore, based on internal control, according to the analytical case of internal control in KC Company, the paper analyzed and studied current internal control of KC Company by use of literature retrieval method, case study method, and qualitative analytical method. Specific research content is as follows:The first chapter: introduction. The chapter mainly analyzed research background and meaning of internal control and current research status of internal control at home and abroad, introduced research structure, content, and method of the paper, and analyzed the main contribution and shortage of the paper.The second chapter: Internal Control literature review. This chapter reviewed the internal control literature on international and domestic, a simple review of international and domestic internal control the outcome of the research literature.The third chapter: theoretical analysis on enterprise internal control theory. Comprehensive introduction of enterprise internal control theory was made in the chapter. Firstly, the development and evolution status of international internal control theory was explained; secondly, the development status of domestic internal control theory was introduced; in the end, the concept of internal control, factor of internal control, and relation among all factors was demonstrated, and the advantage of analysis on enterprise internal control based on COSO perceptive. Sufficient theoretical evidence in the chapter was provided for the following case study.The fourth chapter: analysis on current situation of internal control in KC Company. Firstly, general situation and industrial feature of KC Company was elaborated in the chapter; secondly, based on five factors of internal control, analysis and appraisal on internal control in KC Company was made through questionnaire and qualitative analysis.The fifth chapter: problem and reason for internal control in KC Company. Based on the internal control theory, surrounding five factors of internal control, detailed analysis and demonstration on problem and reason for internal control in KC Company was made by combining current stage, environment, and operational management status of KC Company.The sixth chapter: optimization measure of internal control in KC Company. Surrounding the internal control factor, according to problem of internal control in KC Company, by combining internal control theory with development stage and business environment of KC Company, the chapter put forwards optimization measure of internal control in KC Company, including: enhancing staffs’internal control consciousness, improving human resources policies, completing performance appraisal system, constructing risk management system, creating cultural atmosphere of enterprise internal control; setting up risk control system, improving comprehensive budget management system, increasing risk prevention ability; establishing capital expenditure management procedure, facilitating effective performance of internal control activities; strengthening enterprise information system construction and information resource sharing; setting up internal audit department, constructing audit system, and enhancing monitoring function.The seventh chapter: research conclusion and outlook. Based on main conclusion of the paper, limitation of the research and outlook direction was put forwards.Research contribution of the paper is as follows:1. Research topic is new. For the selected topic in the paper, instead of repeatedly studying the traditional construction of internal control system, optimization measure of internal control was selected creatively.2. Research objects are comprehensive. The research objects included staffs in various management levels, various business departments, and various positions. Broad participants in the questionnaire covered all key business management activities of the company, so the investigation result not only provided detailed and reasonable data support for the paper analysis, but also publicized internal control knowledge and culture to all staffs through the investigation, which was good for the future promotion of internal control optimization measure.3. Research conclusion has strong applicability. According to problem of internal control in KC Company, the paper proposed optimization measure, and combined the internal control theory with the practice to guide the optimization of internal control and effective operation of internal control in KC Company. Especially, capital expenditure management procedure has been promoted in other member companies of the Group, which obtained preliminary effect in improving economic benefit of the enterprise.