Legal Research On Enterprise’ Internal Control Of China

The bankruptcy of the Enron Corporation, the financial fraud of WorldCom has once again drawn the global attention to the internal control of the enterprises. America is required to interfere with the enterprises’internal control through legislation and promulgates the Sarbanes-Oxley Act, which exerts great influence over all the other countries. The internal control of the enterprises has been closely connected with laws and become a new topic in legal research beyond the connection with accounting and auditing.Progress has been made in internal control in theory and practice in China in recent years, supported by the government, despite it used to lag behind those developed countries. The Basic Internal Control Norms for Enterprises and the matching guidelines issued by five departments including the Ministry of Finance, the CSRC etc. from year 2008, in particular, offers a standard unified internal control framework for Chinese enterprises, and greatly promotes the development of the internal control within Chinese enterprises.However, China’s work and achievements on the internal control laws are far from satisfactory, while those developed countries, represented by America, have made efforts on improving internal control through legislation. This Paper starts from the development of the internal control, introduces the experience in internal control in America, discusses legal aspect of the enterprise’internal control in China, and puts forward the recommendations in respect of improving the legal system of internal control in China.