Research On Contract Management Internal Controls Problems Of BHZT Engineering Company

With the bankruptcy of Enron, WorldCom and the exposure of financial scandals of domestic Wanfu Biotechnology, GreenLand, a growing number of experts, scholars and senior executive recognize that internal controls play a key role in corporate governance. Establishing a perfect and effective internal control system to help businesses avoid business risks and financial risks has become a consensus of all the corporate stakeholders.As the wholly owned subsidiary of ZSY Group Company, BHZT engineering company mainly provides the engineering and technical services such as drilling well, logging well, direction well and other services to the other branches or subsidiaries within the ZSY Group. In consideration of the long construction period, technical complexity of the projects that BHZT engineering company implements,how to improve the quality of the project under the premise to ensure the efficiency of the construction project, how to perform timely and accurate accounting treatment, there is no doubt that reasonable, effective internal control is the key to solving these problems.In 2009,according to the Internal Control Management Manual of ZSY Group, combined with their own actual situation, BHZT engineering company conducted a comprehensive internal control system construction. BHZT engineering company initially wishes the new internal control system help business avoid business risks,financial, legal risks, provide a safety guarantee system for the operating and management.However,in the last 5 years the internal control system has implemented, due to the weak internal control environment and poor communication channels and other reasons, the effect achieved is unsatisfactory.In BHZT engineering company,Risk Management Department annually performs a regulatory evaluation test on internal control to authority headquarters and the subordinate units.The same problems on internal controls occur repeatedly, of which the contract management internal control is particularly prominent.With the continuous development of China’s socialist market economy and the increasing risk awareness of the companies,it has become an important part of internal control to strengthen contract management foundation work. BHZT engineering company often have to purchase large-scale construction equipment, construction materials and outsource the engineering services,so researching contract management internal control is particularly important to regulate procurement practices, control operational risks and financial risks, improve operational efficiency and effectiveness.This paper analyzes the contract management internal controls problems in BHZT engineering company and the causes of these problems,and put forwards some suggestions for improvement considering BHZT engineering company’s actual situation in order to make BHZT engineering company contract management internal control more perfect and improve their practical implementation effect. In addition,I hope this paper can change the bias of the construction enterprises to contract management work,make these companies realize that contract management internal controls’ important role in the companies’operation and financial management.