Research On Internal Control Optimization Of Private Enterprises' Listing Strategies

Since the 17th Stock Issuance Review Committee of China Securities Regulatory Commission took office,the IPO has been strictly reviewed,and the internal control normative issues have become its focus.As of October 19,2018,88 of the 245 companies in the meeting had been rejected,and 16 companies were suspended.The overall pass rate was only 57.55%,and the previous success rate was over 80%.It is more obvious than the drop.According to the results of the meeting of the Issuance Review Committee,47 companies were clearly identified as having internal control problems,and internal control problems frequently occurred in various business activities such as capital activities and sales operations.Problems of internal control can hinder the successful listing of companies,so companies should pay special attention to the construction of internal control during the listing process.As the main boost of the development of China's economy,private enterprises need to pay attention to their internal control problems.Because there is more kinship within private enterprise,it is easy to form a situation of human system rather than legal system.Therefore,under the background of the supervision layer to strengthen the supervision and relatively tighten the IPO audit criteria of the companies applying for listing,in order to be listed successfully,private companies have to make the internal control meet the standards first,which means to ensure that its internal control system is sound and effectively implemented,to compliance with the requirements of the SFC and other regulatory departments.Based on this,this paper explores how private enterprises should optimize their internal control under the listing strategy,so that the internal control of enterprise construction can meet the requirements of listing supervision and meet their own management needs to a certain extent.This paper has carried out research on this issue in the form of case study.The selected case XN company is a typical private enterprise.In the process of preparation for listing,it also encounters the situation that the internal control is not standardized and the control of many business activities is flawed.The problems of XN's internal control are systematically analyzed and improved from both the factor level and the business level.The internal control audit conclusions and the changes in the company's agency problems indicate that the company's internal control optimization program has certain effects.The conclusions of this paper are as follows:(1)Internal control problems hinders the successful listing of the company,and the law that high past profit leads to high pass rate will no longer apply.In the process of listing,private enterprises should pay attention to the normative problems of internal control,in which the capital activities and sales operations are the main points.(2)The internal control of private enterprises can be optimized based on the factor level and the business level.The optimization at the factor level includes the internal environment,control activities,risk assessment,information and communication,and internal supervision optimization.The optimization of the business level should be based on the control objectives of the corresponding business,and set control measures for the key control points.(3)The internal control system is not a fixed pattern.It is necessary for a company to construct its own internal control system in combination with development strategies and external environment,and establish an internal control system that conforms to its own characteristics.At the same time,after the completion of the internal control system,it is also necessary to verify whether there are defects in the design stage and continue to improve during the operation.It is hoped that through the research of this paper,it can provide some experience for the internal control construction of private enterprises in the stage of listing,and it can also make a little effort to enrich the research on the internal control of private enterprises in China.