A Research On The Construction Of Internal Control System In Z Company

Originating from China's Western Zhou Dynasty, the theory of internal control developed fast in the USA and then was widely recognized and spread worldwide. Modern China's development history was quite different from other countries, which had led Chinese enterprises to only focus on how to expand market share or how to show a good financial statement by revealing financial data, but ignored the important role of internal control playing in the process of achieving their ultimate development goals. Companies, especially for listed companies, should study on establishing the internal control system that can be implement effectively and in line with their development as well as China's regulatory requirements, which bothers managers of so many enterprises.According to above situation, the author has done some research on Chinese listed companies' establishment of internal control system, taking a certain Chinese listed company for example that is called Z in this article. For doing better research on various problems existing in the process of internal control system establishment and figuring out effective solutions to those problems, the author read and studied a number of theories of internal control based on current regulatory requirements on internal control.This article consists of the following 7 chapters: Introduction, Review of Internal Control Theory, Brief Introduction of Z Company, Analysis on the Internal Control management in Z Company, Analysis on the establishment of Internal Control in Z Company and Conclusion. Chapter 1 is going to introduce the background, significance, research methods and general context of this article, and then lead the coming context. Chapter 2 is to review the conception of internal control and its evolution, and then summarize the development of internal control as well as establishment of some relevant subjects systems to internal control. Chapter 3 is taking Z Company for example and introducing its basic situation. Chapter 4 analyses Z Company's current management of internal control in details by introducing the situation of establishing internal control and points out some problems existing in the process of establishing internal control system. Chapter 5 is about building the system of internal control management in Z Company. Chapter 6 makes objective evaluation and effective proposal for Z Company's internal control system and comes to a conclusion in Chapter 7 at last.In the article, the author focuses on the following points:Firstly, the article introduces the 5 phrases in the process of development of internal control, especially expatiate both COSO report and the framework COSO-ERM which are quite important for development of modern internal control theory.Secondly, the article discusses a feasible system of internal control with the combination of institutional economics.Thirdly, taking Z Company for example, the article introduces its achievements of the first round of internal control establishment and points out some problems existing in the process of that establishment. Meanwhile, it also shows the situation that domestic listed companies like Z Company should launch internal control in no time. For establishing effective internal control system, listed companies should rebuild their organizational structure, re-definite relevant responsibilities and then establish a feasible internal control framework according to domestic regulatory requirements and SWOT-model analysis on Z Company.Finally, the author proposes some advice for improving Z Company's internal control by rebuilding its internal control system and analyzing those problems existing in the company's internal control system, which other companies also can learn from.