Research On Internal Controls Issues Of Finance Company A

As an important approach in modern enterprise management, Internal Control has become much more weighted as enterprises grow and develop. Taken appearances in early 20th century, the Internal Check Theory indicated an early sign of research and implementations of Internal Control. After several development stages, Internal Control has become a necessity for growth and management, especially during the global recession. While real economy is slowly recovering and currency market’s deflation, company operations are suffering from more uncertainties and demanding extraordinary internal controls. As a result of combination between industry and finance, financial companies are acting as internal banks inside enterprises. Even though financial companies are considered non-banking financial institutions, they do have characteristics of banks. One instant of many of their similarities with banks is that they are under same principles when being audited for their internal controls. Furthermore, financial companies has the nature of enterprises because they are being generated and directly serving the enterprise groups’ real economies. Enterprise groups have significant influences on financial companies, which causes low transparencies. External auditing maybe blind-sided limited from low transparencies and as a result it relies more on internal controls.Financial Company is unique in our economy system. The quality of internal controls of financial companies is just as important as companies’own developments. Improving internal control is important to advance financial companies’ risk management and sustainability. This article is a research and analysis of integrations of internal control principles with actual situations of financial companies. Starting off concepts, it introduces and analysis the essences, key elements, and intent of internal control. After briefing how internal control theory was initiated and developed, the design structure will be outlined. Later on is to introduce the background and industry characteristics of financial companies. Integrates Internal Control’s outline, Financial Company’s characteristics, and feature of other financial institutes’, the "Internal Control of Financial Company" theory is developed. Case study researches the financial situation of Company A and proposes a solution of how to improve its internal control with conclusions.