Research On The Internal Control Of LIVON GROUP

The development of the real estate industry has attracted a lot of attention inChina, because of the development of real estate enterprises related to the vitalinterests of the people, at the same time, the real estate industry is one of the mostimportant one of the pillar industries, and its development is closely related to thedevelopment of the entire national economy. With the soaring house prices acrossthe country in recent years, in order to guide the real estate industry health issued aseries of policies. In this special stage, real estate enterprises should be how to adaptto a changing environment to continue to develop, how to overcome theadverse effects of external and internal, how to control and prevent the risk, all ofthese questions need in-depth study and research.Livon Group in Jilin province is renowned real estate developmententerprises, in the beginning, it established a long-term strategic plan for thedevelopment of enterprises, the business portfolio strategy to residentialdevelopment as the core. With the continuous expansion of the scale ofoperation force Wang Group, its strength is also an unprecedentedstrong, gradually developed into the Jilin Province real estate industry leadingenterprises. There is force Livon Group faces more powerful competitors,Livon group overall operating costs continue to increase, the operating risk of anenterprise is more and more higher unfavorable factors. These factors make themanagers felt unable to continue to rely on the expansion of the scale to strengthentheir own strength gradually, sometimes run counter to one’s desire, high riskand high cost of inputs but didn’t get high profit. In this context, the author thinksthat the main task force Wang Group at this stage is to improve the enterprise internal control system, process reengineering, strictly control the cost, to obtainbenefits from these aspects.Author observe and analysis the status of internal control group on thecompany, found a lot of problems in the implementation of process control ofinternal company. The first is the group of employees do not strictly complywith the internal control system, and even many employees do not know the specificcontent of the internal control system. The second is the internal responsibilities arenot clear, the board of directors, board of supervisors, managers and other teammembers overlap each other, did not achieve the effect of checks and balances. Onceagain, the supervision function failure, this is not in favor of the internal auditdepartment is an objective and fair evaluation and supervision. Finally isthe communication of information feedback is not timely, each branchmanagement decentralization and decision-making layer makes the existence ofinformation asymmetry phenomenon serious group.Why Livon group the situation is group control links in the internalweakness caused by. The first is the lack of internal control environment, internalcontrol of the one-sided understanding, the enterprise culture construction is notperfect, imperfect organization, neglect of human resource management and socialresponsibility of enterprises lack of knowledge of these sixaspects make delicious group no internal control environment health. The second isthe internal control structure is not perfect, the result is the fixed assetsmanagement, capital management cost control, construction processcontrol, procurement and supplier management lost effective control. Again is theinternal control regulation is not in place, the weakening of theinternal audit department functions, lack of independence, supervisionand management personnel professional skills and lack of supervision mechanismimperfect is the main reason for the failure of internal control supervision. The last is the internal control information communication channels blocked, do not attachimportance to the communication of information management, no internal andexternal information communication channels and information system constructionlag makes the information communication difficulties.The reason behind the Livon Group internal control present situation andproblem are summarized, by comparing with the classical COSO framework theauthor, from the control environment, information and communication andmonitoring of five key elements, to Livon Group internal control system of targetedrecommendations for improvement. The first is to improve the internal controlenvironment group, company set up scientific and reasonable organizationalstructure, and strengthen the consciousness of internal control management, this isthe first condition to strengthen internal control group, at the same time, payattention to employee training and corporate culture construction. The second is tostrengthen the group’s internal control activities, from the workingcapital management, fixed assets management, cost management to purchasing andsales management, put forward a series of process reengineering of internalcontrol, internal control system to control the ability to protect the business. Onceagain the establishment of regulatory institutions internal control group, strengthenthe internal audit, must be independent of the internal auditing department tosupervise the implementation, at the same time to active use of externaloversight. The last is to optimize the communication channels to ensure that internalcontrol group, group of timely and accurate collection, transmission andprocessing of important information related to internal control, to ensure thatthe information for effective communication between the internal and externalenterprises. We need to establish information communication network flow andexternal information reasonable release process. The internal control system of continuous improvement, make the internal control system can help WangGroup long-term sustainable development escort.