Issues And Strategies, "Great Northern Wilderness" Internal Controls

With the development of the theory and practice of internal control, the internalcontrol gets more and more concern and attention. American COSO Committee issued the“Internal Control-Integrated Framework” and “Enterprise Risk Management-IntegratedFramework ", which is the most authoritative framework for the modern theory of internalcontrol. China issued the "Basic Standards for Enterprise Internal Control" and "EnterpriseInternal Control Guidelines" by using the COSO internal control framework for reference.Due to the internal control of companies still in the initial stages of construction, how tobuild a consistent with regulatory standards and effective internal control system hasbecome a serious problem in many companies. Ministry of Finance requires Main Boardlisted companies start to construct internal control and disclosure from2012. BeidahuangAgriculture Co.,Ltd has many defects in the construction of internal control, is worthy ofstudy and consideration.For major defects exists in Beidahuang such as illegal lending capital and informationdisclosure, the article elaborated from the five elements of the internal control framework,that is the internal environment, risk assessment, control activities, information andcommunication, and internal oversight. The main problem of the internal environment is:corporate governance structure is not perfect, perform job responsibilities are not clearplace, human resource management is not standardized, lack of legal concepts, and severalother issues; As for risk assessment level, Beidahuang exposure the risk of lackdevelopment strategy and risk of funds of subsidiary management; In control activities,Beidahuang lack of authorization and approval control, missing property protectioncontrol, budget execution is not in place; In the information and communication level,Beidahuang failed to disclose information in a timely manner, the internal reporting systemnot effective implementation; For internal oversight, Beidahuang lack of the effectivelyregulate and control subsidiaries. On the basis of the analysis, the article puts forwardaeffectivemonitoring mechanism in five areas, that is to build soundinternal environment,raise risk awareness and implement internal control measures, timely and accurateinformation disclosure. Meanwhile, the article analyzes the internal control weaknessbehind the Beidahuang which reflects the current listing Company’s internal controlwidespread problem, namely the degree of importance for the management of internalcontrols is not enough, the enterprise internal control inherent lack of motivation, as wellas corporate information disclosure violations largely due to the low cost of irregularitiescaused.The results of this study not only can provide Beidahuang Agriculture a reasonableimprovement of internal control system; it can also provide a reference for other listedcompanies in construction of internal control system.