Research On Internal Control Optimization Of HCKY Group

In 1992,Committee of Sponsoring Organization(COSO)issued the COSO report which has been widely recognized and applied by people from all walks of society.It has become one of the most authoritative theories of internal control and widely used in the theory and practice of internal control.With the acceleration of China's internationalization process,in May 2008,the Ministry of Finance,the Audit Office and other five ministries jointly promulgated the basic norms of internal control of enterprises in Chinese enterprises(It is known as the Chinese version of the SarbanesOxley Act).It has been 11 years since then.Looking back on the development process of internal control in these 11 years,we are glad to see the effectiveness of internal control in various enterprises,of course,we also find many shortcomings.At present,the contradiction between China's economic development and environmental resources is increasingly acute,and the development of the coal industry is facing serious problems.HCKY Group,as an old-brand coal enterprise located in the northeast,has been restructured by state-owned enterprises and influenced by many factors such as system.The construction of internal control in modern enterprises is slower in essence,while the domestic and foreign business environment is constantly changing,the industry competition is increasingly fierce,the coal resources are increasingly exhausted.Strategic transformation is the inevitable way.How to enable enterprises to rely on existing major industries and take the road of sustainable development in the transition period is the core of the company's strategy.Admittedly,the construction of internal control is not once and for all,but a dynamic process of improvement.Based on a thorough investigation of the design and operation of HCKY Group's internal control,this paper describes the status quo of its internal control from five aspects: control environment,risk assessment,control activities,information and communication,and internal supervision.In accordance with China's "Basic Standards for Internal Control of Enterprises" and "Guidelines for the Evaluation of Internal Control",this paper finds that the company has such defects as follows: weak control environment due to imperfect governance mechanism,weak corporate culture cohesion and weak implementation of development strategy;unscientific risk management and control due to unclear institutional responsibilities and confused evaluation procedures;and the non-standard control activity,which is caused by non-standard management of monetary funds and inventory purchase.Due to the imperfection of information system and communication channels,information communication is not smooth;and control supervision is not in place due to imperfect supervision institutions and weak supervision.Relying on the COSO framework,fully drawing lessons from domestic and foreign internal control theory and practical research results,this paper puts forward the main measures to optimize the internal control targeted HCKY Group,including: improving the organizational structure,enhancing the cohesion of corporate culture,improving the execution of development strategies to improve the control environment;scientifically defining the responsibilities of institutions and rationalizing the evaluation process to improve risk management and control.To scientifically define the responsibilities of institutions and rationalize the evaluation process to improve the scientificity of risk management and control;to standardize the management of monetary funds and inventory procurement to standardize control activities;to improve the information communication system and system construction;to strengthen the construction of internal supervision institutions,improve the quality of internal auditors,and strengthen the accountability system to improve the supervision mechanism.It is expected that the research results of this paper will be helpful to the construction of internal control of HCKY Group as well as coal and related industries.