Internal Control Environment Research On The X Company

Internal control is broadly defined as a process, effected by an entity’s board ofdirectors, management, and other personnel, designed to provide reasonable assuranceregarding the achievement of objectives in the following categories: a) Effectiveness andefficiency of operations; b) Reliability of financial reporting; c) Compliance with laws andregulations；d) assurance the safety of asset; and e) promoting the achievement ofcompany`s strategy. COSO defines internal control as having five components: ControlEnvironment, Risk Assessment, Control Activities, Information and Communicationsystems, Monitoring. Control Environment sets the tone for the organization, influencingthe control consciousness of its people. It is the foundation for all other components ofinternal control. This paper takes X private listed company as an example to illustrate thesituation of the management style, corporate culture, values, philosophy,operating style,organizational structure, human resources policies and social responsibility.and then givesuggestion to solve the existed problems in X company and all the private listed companyin China.