Research On Internal Control System Establishment In Tianhang Group

Chinese enterprises are in urgent need to improve the management performanceand establish an internal control system, with the background of fierce marketcompetition and globalization, to meet the requirement of enterprise scaledevelopment, and socialization and popularization of capital market. The Ministry ofFinance and State-owned Assets Supervision and Administration Commission haveissued a series of regulations, demanding relative enterprises and other organizationsto build sound internal control systems, to reduce fraud and embezzlement, andmaintain normal economical market order. The original internal control systems, inmost cases, do not match up with the development of corporate expansion, in the formof capital operation, merger and acquisition and so on, and critical risk is beingneglected or out of control with accelerating business expansion.Tianhang Group has grown fast and capital asset increases sharply in recent years,and uses listing company as a platform to enter capital market and march onto thebattleground of national economy. Internal control system suitable for market demandand corporate’s overall development plan is sorely needed by every corporate in orderto fend off operating risk. Based on the comprehensive analysis of risk managementin Tianhang Group, the paper studies the feasibility of constructing internal controlsystem in the Group and teases out the theories of risk management and internalcontrol and their relationship. Based on the intrinsic characteristics of Tianhang Groupand according to national regulations related to risk management and internal control,such as Guide for Comprehensive Risk Management of Centrally-administeredState-owned Enterprises, Basic Regulations on Enterprise Internal Control andApplication Guide for Internal Control, the paper refers to COSO internal controlframework and establishes a comprehensive internal control system, coveringconstruction plan, implementation and assessment of internal control inside TianhangGroup, and proposes rational suggestions for the internal control system of the Groupin aspects of staff, organizational structure, system optimization, proceduremanagement, etc., so as to fully fulfill the fundamental role of internal control withregards to risk management and provide systematical support for the futuredevelopment of Tianhang Group.