Optimization Of H Company's Internal Control System

According to China Statistical Yearbook 2015,there were more than 1.37 million business corporations in the same year,but most of them were SMEs that lack a modern management system.The average "life expectancy" of such SMEs is approximately 2.9 years(2015 Report on the Development of China's Private Enterprises).The fundamental causes for the"premature death" of these enterprises are that they lack the perfect internal control system and financial risk management system and that their internal control mechanism is less efficient or fails to function.Guiding the enterprises to establish effective internal control culture and control mechanism is crucial to maintaining the stability and security of the national market.In both China and foreign countries,there is huge number of articles or literatures on internal control.Therefore,the subject of this thesis is how to design and implement the internal control framework system of SMEs and how to avoid financial risks.This thesis combines standard specifications and actual cases,and has adopted the research methods such as chart analysis and data classification analysis.It directly explores the existing problems and causes for the internal control system of H Company,and offers some solutions and suggestions.Eventually makes a comparative study based on the five components of the COSO framework and the actual situation of H Company,and thus puts forward suggestions and steps for optimization of the internal control system of the company.As for the author,the development of the company's internal control system is a systematic project,which requires the support and cooperation of the company's employees at all levels.The effectiveness of the internal control system has positive correlation with the degree of emphasis on internal control system by the policy-makers and management of the company.Establishing a good internal control system can improve the operation efficiency of the company,but in setting up internal control system an enterprise must take into account the internal and external factors that influence internal control in order to achieve expected results.The mutual balance of cost and profit should be emphasized in designing internal control system and the cost should not be neglected for the sake of pursuing perfection of the internal control system.The design of the internal control system should fit in well with the development strategy of an enterprise and the construction of the internal control system should correspond to the long-term development strategy of the enterprise.There is no universal standard or model for internal control system and the enterprise should fully understand the limitations of the theories of internal control.In the end,it has verified the central thesis,that is,the enterprises can only set up an effective internal control system according to their own characteristics and in combination with the five components.