The Case Analysis Of Tietong Branch Company's Internal Control

In 2008, the ministry of finance had issued the "Basic Standards For Enterprises' Internal Control System" with other four ministries. This event can be seen as a starting point of the internal control system construction. After that we can use laws to regulate the enterprises to develop the internal control system. On the other hand, the appearance of the inefficiency of internal control systems set off alarm bells, as the result, the construction of internal control system draws more attention of the society. Recently, in the reformation of SOE, many experts are working to develop better methods to find the way that establish a scientific internal control system and modify the risk preventing process and guarantee asset safety. Consequently, it is necessary for us to figure out the significance of the construction of internal control systems.I obtain our sample from a branch company of China Mobile Tietong in Y province (hereafter referred to as Branch company). The main purpose of this research is to analyze the drawbacks in the sample company, so I use actual surveys, the control test to evaluate the effectiveness of the internal control system and cases analysis as research methods. Then combine the current situation of the branch company, and take the factors of internal control construction, business development and management into consideration, according to the 'Basic Standards for Enterprises' Internal Control System' and neoinstitutional economics theory to analysis the problems in the branch company. In this paper, I pay more attention to the deficiencies of the recent internal control systems on the transformed services. To alleviate internal control inefficiencies, this paper offered some proposals. And discussed about how to build and enhancing a self-enforcing mechanism. After that, I follow and monitor the implementation of the improvement proposals. By reviewing the results, summarized the experiences for other similar enterprises.I obtain the sample over the year 2015-2016, which is a period of reformation and services transforming. The internal control environment is just in the period of primary development, it is unavoidable to find some problems in their internal control system. This paper point out the problems of the enterprise such as the internal control system does not include the control methods of transformational business when the system was designed, the control point setting is not enough, and the regulations and rules can not match well with internal control system. For the problems found by control test, I analysis how the regulation impact on the employee according to the theory of neoinstitutional economics. In addition, this paper also point out that the internal control system in branch company has several partial failures in fields of contract negotiation, cost control, the inner and outer environment, information system and so on. And analysis the problems in accounting controls based on the internal accounting control system, point out the problems in ameliorating and perfecting the supervisory and appraisal system. Then provide some systematic suggestions for the application of internal control system and the self-enhancing internal control system.The advices I offered is constructive. This research has formed a significant part of the construction of the internal control systems in the sample company. Based on the results of this research, the management of the company has make improvement in their internal control systems.Lastly, since we examine the situation of the internal control systems of the sample company and the companies in the same industry, which makes it possible for us to draw a conclusion that the contraction of internal control environment and self-enforcing mechanism is the key of ensuring the effectiveness of internal control, particularly for those enterprises having retransformed period. This paper may play an important role in the research of internal control systems for further study.