Improvement Study For CA Group’s Internal Control Based On The View Of Contractual Culture

Nowadays, internal control is considered as a common concern among China’stheorists and practitioners. While many enterprises have put heavy investment into itsimplementation, the effect is not satisfactory. This, of course, is the combined action ofmany factors, and among which, the weak or absence of contractual culture is an importantone out of many. It can be seen that whether a sound enterprise culture can be establishedand whether a contractual spirit can be born are both essential to an enterprise’sdevelopment.This paper mainly study the internal control on the aspect of contractual culture usingliterature research method and case study method. It takes CA Group as case example,analysis the problem presented in the Group’s internal control and its cause, and at lastdetermines the method and principle for CA Group to establish a contractual culturesystem; it also propose a solution to improve the effect of internal control.In this paper, the author thinks that contractual culture is the contractual collection ofa series of factors, which mainly including enterprise culture, contract, the psychologicalfactors of both parties signing the contract as well as the capacities and distribution ofbenefit of the said parties, balancing of company governance structure, incentive andconstraint mechanism for employees, etc. These factors will affect many things, such as theworking style, thinking mode, value view, professional ethics, behavioral pattern and valuemeasurement. The effect of internal control can be improved fundamentally only if thecompany’s governance structure has been perfected, an effective incentive and constraintmechanism has been established, the independent function of management and executivelevel has been strengthened, a deep enterprise cultural deposits has been constructed, amodern contractual spirit of the enterprise has been cultivated, a sound contractual cultureenvironment has been formed, reasonable authorization and proper incentive has beengiven to the employees and loyalties of the same toward the enterprise have been fortified.Therefore, this paper present some reference and practical value for the improvement of anenterprise’s internal control level.