The Effectiveness Evaluation Of Internal Control In Construction Enterprises

Although the theory of internal control has existed for a long time, after1990, with the globaleconomic integration accelerates, it finally caught the attention of the accounting industry and government.Because in that period, the enterprise faced more and more risks,, people realized that the internal controldetermines whether the enterprise can find and control the risk. With the rapid development of socialeconomy, every industry have occurred earth-shaking changes, faces different risks, as well as theconstruction enterprise.From our country current situation: First of all, although there are a lot of research on internal control,only a few are related to the internal control evaluation, let along establish internal control evaluationsystem; Secondly, the government has published a series of specifications on our country enterprise internalcontrol but rarely involved evaluation of internal control; Finally, the enterprise of internal controlevaluation work was not given the attention it deserves, arbitrary internal control evaluation work, establisha set of complete internal control evaluation system becomes more difficult.So in order to achieve business goals, reduce risk, guarantee the effective implementation of internalcontrol, to evaluate the effectiveness of the construction enterprise internal control is indispensable.This paper first describes the main content and the theoretical basis for effectiveness evaluation ofinternal control. As the evaluation results should be made public, internal control environment is complexand evaluation system for conclude the whole internal control processes,evaluate the effectiveness ofinternal control is complex, which requires companies to follow certain principles, summarized in thefollowing aspects: the principle of separation of incompatible duties, the principle of cooperation andcoordination, risk control point principles, the principle of flexibility, the project construction process standardization principles. Then, analyzes the status evaluation of the effectiveness of internal control ofconstruction enterprises: Notwithstanding the provisions of enterprise internal control evaluation of theeffectiveness of the relevant laws and norms, China’s current laws and regulations on internal controlsfollow a unified internal control standard, but not focus on various industries unfounded characteristics ofspecific guidance and specifications. Introduces the theoretical basis for effectiveness evaluation of internalcontrol, namely: control theory, property rights theory, agency theory and contract theory.Then describes the contents of the construction project, and outlines the construction project as well asthe characteristics of the internal control construction projects. Construction projects are characterized byfive aspects, including: the timing, location fixed, long duration, etc.; while internal control constructionprojects including irreversibility, complexity and cover a large range of features. From the project approvalstage, the survey design and budget estimate stage, tender stage, construction stage, the acceptance stagesummarizes the main points of the internal construction project control. After that analysis the factorsaffecting the construction enterprise internal control, including: human factors, mechanical control factors,material control factors, environmental factors and the control program controlling factors.On the basis of the above analysis, according to the point of construction projects and influencingfactors of internal control, analysis the H company’ risk point and control measures, and develop theappropriate evaluation criteria. As in the project approval stage, including these risk points:projectproposal content below standard; does not clearly define the nature and purpose of the project, there is noreasonable estimate of the scale proposed; construction progress of the project and the first estimate of theinvestment plan do not fit; project investment intentions or do not meet the national industrial policy orenterprise development objectives, and its corresponding control measures include: project proposalcontent control; preparation of project proposals controls; approval control of project proposals;. Corresponding evaluation criteria includes: Whether a company specialized agencies to develop centralizedproject management, according to the development strategy and annual investment plan, put forwardproject proposals, feasibility studies, preparation of feasibility study report..Whether the main content ofthe project proposal include: the need for and the basis of the project, product solutions, the proposed scale,construction sites, investment estimates, financing, project schedule, a preliminary evaluation of theeconomic and social effects estimates, environmental impact, etc..Finally, evaluate the effectiveness of internal control of H Company...