Research On The Internal Control System Optimization Of Huishan Dairy Holdings Company Under COSO-ERM(2017) Perspective

The rapid development of economic environment makes realizing the maximization of value the first goal of the enterprise.On 6 September 2017,the new version of Enterprise Risk Management Framework was officially released by COSO,which combined risk and performance and fully embodied the functions of risk management,strategic realization and performance enhancement.As the most important part of the management activities,the internal control system should adapt to the new environment quickly.Huishan Dairy Holdings Company Limited(Huishan Dairy)encounted a sharp fall in share prices.As the first full-industry company in China,it has serious internal control issues.This paper discusses the principles and ideas of optimizing internal control system of Huishan Dairy,effectively compensate for the deficiencies of existing internal control and promote the realization of the goal of maximizing enterprise value.First of all,this paper expounds the topic selection and research framework.Through combing literature,this paper summarizes the three directions of internal control system,namely financial reporting,traditional risk guidance and value management,and summarizes ERM classic research.At present,the internal control study neglects "risk-profit equivalence",which affects its function of enhancing performance.It is not integrated with practice as well.Secondly,through the comparative study,this paper analyzes the motivation of optimizing internal control system from the perspective of COSO-ERM(2017).In order to link theory with practice,this paper also explains the problems of internal control in Huishan Dairy.Then,starting from overcoming the limitation,this paper combines the five elements of internal control with the five elements of COSO-ERM(2017),and constructs an internal control optimization system composed of three systems:basic management system,core implementation system and supervisory improvement system:formulate strategy and goal in the control environment which emphasizes"governance and culture";the core is risk management and control activities related with value creation;in order to detect the effect of the internal control system,monitoring,evaluation and improvement are necessary.On this basis,the paper puts forward the following measures to optimize the internal control system of Huishan Dairy.On basic management system,strengthening the supervision by the board of directors,setting up the functional departments related with performance and risk management,establishing a comprehensive information control system.With the help of BSC,it is necessary to break the strategic goal into specific risk management goals,establish risk management performance appraisal system,and optimize the risk management process and control procedure for the existing problems of Huishan Dairy.We should combine internal and external monitoring and improve the internal control through performance appraisal and evaluation of material changes.Finally,this paper puts forward the safeguard measures from four aspects.The application of COSO-ERM(2017)embodies the core logic of "managing with risk and promoting performance",reflecting innovations in research angle,theoretical framework and practice object.