Research On Internal Control Of Financial Shard Service Centre Of A Telecom Corporation

Finance shared service, introduced from foreign countries in the last decade, is abrand new mode of financial management and control in China. It is designed to solvea range of problems occurred during the process of business expansion, including highfinancial cost, financial management inefficiency, financial department redundancy,and insufficient control over subsidiaries or branches. Large enterprises are able tocentralize the basic accounting functions of each business unit by setting up thefinancial service center. On one hand, it could significantly lower financial costs,improve efficiency, promote information transparency, reduce operating risks andrealize a sound and dynamic monitoring over budgets, accounting and performanceanalysis. On the other hand, human resources could be optimized with more financestaff reallocated to participate in higher-value work that better support enterprises’core business. Therefore, more and more domestic large enterprises and multinationalcorporations begin to establish their own finance shared service centers at present. ATelecom Corporation, the first company that built up such center in China, hasaccumulated substantial experience and thus offers great value for learning andresearch.According to the Standard of Company Accounting Informatization issued by theMinistry of Finance, large enterprises and groups should proactively explore ways ofapplying information technology to converge accounting work and establish financeshared service centers step by step. However, how to use the finance shared servicecenter to resolve problems such as poor internal environment, risk alteration,incompleted control activities and immature internal supervising system remainsunsolved. Based upon A Telecom Corporation, of which the finance shared servicecenter is relatively mature, this paper firstly analyses the current situation andexisting problems of finance shared service center according to the five key factors ofinternal control. Then, combing both the theory and practice of internal con trol, thispaper makes recommendations on how to improve the internal control of company’sfinance shared service center so as to better achieve the goal of financial management.