A Case Study Of The Financial Risk Control Of State-owned Enterprises In A Province

Since reform and opening to the outside world,the state-owned enterprises in our country have experienced a high-speed development in asset,operational mechanism,geographical scope,and staff size,causing most of the state-owned enterprises have developed into large enterprise groups of different business forms.After the 1998 financial crisis,these enterprises have been facing increasing uncertainties.Some potential risks concealed and neglected during the period of optimistic economic situation have transformed into real crisis for enterprises,leading to operational difficulties and high risks.In such a situation,the large state-owned enterprise groups should figure out how to construct and perfect financial risk control system actively so as to reduce and remove their financial risks effectively.This paper firstly conducts theory study relevant to financial risks.It discusses and reviews the research literature of international and domestic financial risks.It also researches the theoretical basis of financial risk.It analyses the connotation and basic characteristics of financial risks.Meanwhile the characteristics and forming mechanism of the financial risks of the state-owned enterprise groups are deeply analyzed.This paper draws lessons from research experience and related theories.Starting with the typical financial risk cases of the state-owned enterprises in A Province in recent years,it studies the financial risks of the investment activities,financial activities,guarantee business,accounting and tax activities of the state-owned group enterprises as well as explores the causes of risks.Finally,aiming at the existing problems,by using financial and non-financial indicators,it designs a set of control system for the state-owned enterprise groups.For example: to improve the environment of financial risk control;to establish a financial risk investigation and information communication mechanism;to construct a dynamic early warning index system which can reflect the financial risks of the parent and subsidiary companies using the existing express system and financial performance evaluation standard of the state-owned enterprises;and to propose solutions to establish an effective long-term supervision and restraint mechanism.This paper attempts to establish an extensive financial risk control system of the state-owned group enterprises,which regulates management behavior in advance,strengthens the supervision and control in process and implements accountability afterwards.This promotes state-owned enterprises to improve continuously the ability of financial risk identification,control and resolution.This paper has certain theoretical guidance and practical reference for financial risk analysis and control of the state-owned enterprise groups.