Internol Financial Controls Scheme Design For Shanghai Zhida Company

Chinese private sectors have made a spurt of progress since1978reform. They have accumulated rich capital under the good market conditions. Therefore, many enterprises overlook internal financial control system, which is ruled by man instead of ruled by laws. In the long run, the original system can no longer keep up with this expanding development, leading to the failure of internal management, serious outflow of asset, severe cash-flow problems. Hence the long run development of the enterprises is hindered as a result.In private enterprises as the research object, this presentation is based on the background of Shanghai Zhida LTD,trying to find the reason of failed financial control and the slow turnover of capital during the business process, based on the comprehensive analysis of the company’s organization system, structural establishment, sphere of business,modes of business operation, primary service, service condition, level of management, company’s employment, financial standing, result of operation,and external environment.The presentation is also to write a Financial internal control solutions of Shanghai Zhida LTD,using control theory,the theory of business process reengineering, COSO internal control framework, Sarbanes-Oxley (SOX), Enterprise Internal Control Basic Standards of Practice Note, Basic Standards for Enterprise Internal Control Evaluation guidelines, and Enterprise’s Internal Control Audit Guidelines.Firstly, rebuild the enterprise financial process; establish process system of fund management process, purchasing process, asset management process, the sales process, the financial reporting process and comprehensive budget process. Secondly, design the internal financial control system scheme according to the new financial process, including the control system of job responsibility, authorization and approval system, budget management control system, separation of incompatible duties system,the property protection control system, regular rotation system and accounting control system. Thirdly, assess the work of all the employees involved in the internal financial control system quantitatively. The employees’working performance should be recorded in marks, given by their direct supervisor, internal coordination department and external cooperation unit of the enterprise. And the marks will tell the employees how much money they could get when the end of the quarter.This scheme mainly points at the fast developing medium and small size enterprises. The scale and the growth stage of the enterprise are both concerned when designing the process, system and assessment program. This scheme will change adjusting to the expanding of the scale of the enterprise and the change of external environment. It is a referent to private sectors with the similar enterprise scale and developing stage to the ones of Shanghai Zhida company.