The Research On Internal Control Valuation Of The Refractory Enterprise A

Because of a series of accounting fabrication and financial fraud, the issue of businessinternal control has been attached great attention in the world. And the theory and practice, ofinternal control has prevailed in recent years. In China, some financial professionals andaccounting professionals have already detected the corporation internal control issue andconducted various researches on it. Besides that, amount of firms have established internalcontrol system to improve their operations as well. Furthermore, Chinese governmentconsiders more about the standardised construction of internal control’s valuation system;therefore, Auditing department, the Ministry of Finance, the China Bank RegulatoryCommission and other departments issued rules about internal control valuation.However, though a business launches a sound internal control system, this system maynot be executed effectively; as a result, the valuation of internal control system is of muchsignificance. The reports shows that despite firm A (High-temperature Material Ltd.)producing refractory materials already built a comprehensive internal control system, thevaluation of the internal control system falls behind the construction of the internal controlsystem. Regarding to this situation, the report states, the establishment of internal control firmA’s internal control system, which is based on the domestic and abroad studies of systems,together with the consideration of demand and current situation of Chinese business’s internalcontrol valuation system’s construction.Firm A’s internal control valuation system aims atcontrolling the firm’s operation. According to the requirement of Chinese business’s internalcontrol valuation system, the identification of key controlling factors is of actual importancefor the valuation system’s construction. The establishment of internal control valuationsystems in companies manufacturing refractory materials, can help the internal and externalmanagement to recognise and analyse the internal control problems, and then to makemeasures to improve businesses’ operation and performance effectively.There are six parts in this report:Chapter1: Introduction. This part sets out the background and significance of studyingbusiness internal control valuation system, with the reference of domestic and foreign studies.It also presents the ideas and main content of this report, and the methodologies involved inthis research. Chapter2: Framing business’s internal control valuation system. It firstly states theconcept of business internal control valuation system. And then the function, subjects andobjects, rules and methods, of the internal control valuation system are demonstrated in therest of Chapter2.Chapter3: Introduction of firm A producing refractory materials. It exhibits firm A’sproduction condition and operation condition, and organisational structure, and the conditionof internal control’s execution.Chapter4: Design of company A’s internal control valuation system. It shows theprinciples and ideas of the design at the beginning. After that, it explains company A’sspecific design process which is defining non-current asset, mould, expense, labour, inventory,and income as six key control factors. And these factors belong to three circulatory systemscontaining purchase and payment, production and inventory, sales and receipts.Chapter5: Execution of internal control valuation system in company A. This chapterillustrate application of six key control factors to company A’s actual valuation, and theproblems and specific solutions identified in the operation with the analysis of these keyfactors.Chapter6: Conclusion. This part summarises the whole report.