An Optimizing Research On The Internal Supervision And Inspection System In The ABC SD Province Branch

At present, the international economic and financial situation is grim. And the debt crisis in Greece, Italy and other European countries is continuing that dues to the economic crisis. In addition, economic and financial situation in china is in the depth adjustment. The downward pressure on the economic is increased significantly and structural transformation of the economy is an urgent need. In this situation, a number of large enterprises at home and abroad have financial crisis and issues of business management appear. In particular, in recent years, it is often occurred that large deposits of the customer putting in the domestic bank and financial institutions were missing, causing a hot debate from the domestic and foreign media and the depositors. These events have caused a negative impact on the banking financial institutions. The problems of management still appear under the increasingly strict supervision of the banking regulators and strengthening the banking financial institutions its own building, which promote the author to think and analyze deeply.The effectiveness of internal control is an important indicator to measure the success or failure of a business. For commercial banks which are based on risk, internal control is particularly important. To strengthen internal control system and continue to improve is not only to meet the requirements of China Banking Regulatory Commission, People’s Bank and other regulatory authorities, but also a basic premise to deal with the fierce competition of the market, all types of risk prevention and the steady operations. The development of SD province branch of the Agricultural Bank is growing so fast in the business in recent years that the increment of deposit and loan balances and profitability are in the forefront in the system. From the overall development situation, the existing internal control system of the ABC provides a strong support for its business development. However, from the specific business, business development is not ideal lacking of an efficient internal control system, but also leading to a rising trend of credit risk, operational risk and external risk event. Therefore, the internal control system of the ABC SD province branch must be optimized.Internal control theory is a hot content in recent theoretical studies. American COSO Committee published "Internal Control-Integrated Framework" in the 1990s and emphasized the important connotation of internal control. Internal Control was defined as:"it is implemented jointly by the corporate board of directors, management and staff and applied to formulate strategy, throughout the business processes of the enterprise. It is a series of control activities designed to identify and manage risks and to provide reasonable assurance for enterprises to achieve the basic objectives ". Internal control theory and practice started late in China’s commercial banks. But since the reform and opening up, internal control has been attracted attention gradually by theoretical research. What’s more, internal control has made a major breakthrough in practice. Professor Yan Dawu put forward the relationship between internal control and corporate governance structure, and pointed out the relationship between the internal control system and the institutional environment. Professor Zhang Yixia is committed to extending to the production process and elements’control, not just from a purely financial control and accounting control. He broke traditional limitations of internal control and narrowness. Since 2007, the Ministry of Finance and other ministries have issued "basic norms of internal control", "commercial bank’s internal control guidelines" and other laws and regulations, which made clear the five elements. They are the internal control objectives, internal environment, risk assessment, control activities, information and communication and internal supervision.Internal control theory and practical experience at home and abroad promoted the deepening of the internal control and supervision theory and improved the role of supervision and inspection of internal control for enterprise management. However, the extension of Internal Control definite by the COSO Committee in US is overbroad. It is not easy to learn for commercial banks. As one of the five elements of the internal control, the study in internal supervision is not sufficient in Domestic. It is not to promote the implementation of internal supervision and inspection system effectively in the commercial banks.This paper points out the defects and insufficiency of the internal supervision and inspection in the ABC SD province branch, through analyzed the present situation of its’ internal supervision system and compared the practice of the internal supervision with domestic and foreign commercial banks. In addition, this article puts forward some corresponding countermeasures to improve from organization structure, human resource allocation and the system arrangement of specifics supervision and inspection in the ABC, and so on, aimed at enhancing the quality and efficiency of the internal supervision and inspection in the ABC. The main innovation of this article lies in the view and the conclusion. It is necessary for optimizing the internal supervision and inspection system of the ABC SD province branch to rationalizing the functions of the headquarters’ Accounting Office, the audit bureau and internal compliance departments at all levels from the organization structure and the human resources. And optimization should be focused on the number of staffing in the internal control, supervision of information technology, the problem rectification mechanism, and so on. The aim is dedicated to combining with all aspects of internal supervision to form a positive and interactive mechanism.