A Study On Internal Control Evaluation Standard Of Listed Companies In China

Internal control plays an important role in the normal operation of enterprise. It can improve the correctness and reliability of accounting information, guarantee the smooth production and business activities, make the property safe, ensure enterprise carry out the policies as what they are set, and provide a good foundation for the audit work. Internal control evaluation is the controlling of internal control, to make sure the realization of it’s goal. So far, our listed companies have mostly disclosed their internal control report, and their internal control evaluation standard tends to be consistent. But the current internal control evaluation standard has some problems, like it’s incompleteness, ignoring the process, and failing to reflect the causes of internal control defects. Therefore, we need to perfect it.Based on the analysis of the current internal control evaluation standard, I find some problems and attempt to improve it. The internal control evaluation standard is divided into process evaluation and result evaluation standard. According to the five elements of internal control and their child elements, I design a series of indicators as a standard to evaluate the process of internal control. Use the Analytic Hierarchy Process(AHP) and Fuzzy Comprehensive Evaluation Method to transform the qualitative indicators into quantitative ones. Results evaluation standard is based on the objectives of internal control,referred to our present internal control evaluation standard, also the defect recognized standard. The evaluation subject according to the level of the internal control goal achieved to measure the effectiveness of internal control. Finally, we average the above two results to get the final result of the internal control evaluation. The evaluation criterion overcomes the drawback of the existing evaluation standard, make the evaluation more comprehensive.So that the internal control is evaluated from both the process and results. Meanwhile, in the evaluation of each indicators, we need consider both the internal control design and implementation, so we can easily find out the causes of internal control defects or weaknesses and to modify them. The internal control evaluation standard starts from the elements of internal control, thus make the internal control evaluation standard more reliable. The internal control evaluation standard effectively solve the problems of our current evaluation standard and make it more perfect. For enterprises, this standard contents certain meanings, both theoretically and practically.