The Research On The Problem Of Our Country Enterprise Group Finance Control

Enterprise group is a consortium which is made up of a number of enterprises thathave a relationship on capital coupling. Enterprise group is an advanced organizationalform in order to meet the requirements of market economy development. The number ofour country enterprise group has been increasing and the scale has also been expandingsince the development of the reform and policy, which play an important role in thedevelopment of our country economy.The internal financial control problem has beenan obstacle which blocks the enterprise group development along with the perfecting ofour market economy system. Financial control is the core component of the internalcontrol of enterprise group. The enterprise group can’t operate well without the perfectinternal financial control. Many enterprise groups pay much attention to financialcontrol.They regard the financial control as the development strategy. There are manycases which cause heavy losses, because enterprise group don’t pay enough attention tofinancial control in the process of economic development in our country. It becomes animportant problem that put the financial to the height of the corporate strategy andimproves the internal financial control. Therefore, research on the internal financialcontrol of enterprise groups is of great significance.The research object of the thesis is enterprise group. This thesis creatively analysesthe problems which caused by unreasonable governance and unsound budgetmanagement mechanism, such as the lack of supervision, the chaos of distribution, thedeficiencies of budget management,the lack of effective incentive and constraintmechanism. The thesis is determined to improving the financial control of our countryenterprise group by perfecting the governance structure, optimizing of the distribution,optimizing of comprehensive budget management system, applying effective incentiveand constraint mechanism and so on in order to further innovation and optimizing ofenterprise group.Thesis mainly adopts the method of normative research combining with thecharacteristics of enterprise group in our country and uses the basic theory and analysismethods of economics and management. It is also supplemented by experience learningmethod in order to discuss the optimization problems on the financial control of ourcountry enterprise group.The frame structure of this paper: analysis the specific conditions of the enterprisegroup in our country, and draw lessons from international advanced experience infinancial control, to discuss the deep reasons of the enterprise group financial control problems in our country, then put forward the concrete suggestions. The paper isdivided into six parts. The first part introduces the background and significance of theselected topic, and recommends the current research findings about the financial controltheory. The second part elaborates the concept and target of financial control, and statesthe definition of enterprise group, then expound the characteristics of the enterprisegroup financial control. The third part analyses the enterprise group financial controlproblems and reasons in our country. In this section, the author points out that theformal governance structure、unclear decision-making authority、defective performanceevaluation mechanism、short-term financial decision are the main problems of enterprisegroups in China.Then according to the analysis of existing problems of enterprisegroup financial control in our country, come to a conclusion that the causes of theseproblems include four parts: not carrying out the modern enterprise system, lacking ofreasonable and effective decision-making mechanism, absence of perfectcomprehensive budget management mechanism, being short of the scientific andeffective incentive constraint mechanism. Fourth part uses the experience of othercountries for reference and analyzes the specific situation of the general electric group onthe implementation of financial control. The paper concluded the enlightenment to our national enterprise group on finance control focuses on perfecting enterprise group governance structure, grasping internal centralization and decentralization accurately, improving evaluation mechanism of the comprehensive budget management, and establishing and perfecting incentive constraint mechanism; The fifth part which is the core part of thisarticle which concludes the policy and the suggestion combined with the analysis of thecauses of enterprise group financial control problems and the foreign experience forreference, putting forward to improving our country enterprise group financial control several countermeasures, including: to the core of the financial control of the board of directors as a group, the board of supervisors to implement supervision function,reasonable division of the group decision-making authority, between parent-subsidiary system of different levels of the enterprise group financial decisions, Choosingappropriate comprehensive budgeting methods, clearing all the budget related main body of responsibility,establishing a reasonable salary incentive system, the standard enterprise group internal audit and other measures.The last part is epilogue. The author intends to provide theoretical support and practical help for our national enterprise group financial control through these discusses.