Discussion On Internal Control Of Investment Banking Business Of XN Securities Company

As one of the three traditional business segments of a securities company,investment banking plays an important role in the development of securities companies.In recent years,with the continuous opening of China’s capital market,the China Securities Regulatory Commission has successively launched the GEM and the New Third Board.Some securities companies have taken this opportunity to implement the “radical” incentive system and to undertake investment banking projects.Whether it is the "radish chapter" case of Guohai Securities Company or the "flickering reorganization" case of Southwest Securities Company,it reflects the "heavy business development,light business quality","heavy business scale,light business risk" of securities companies,and The fundamental reason is that the development of investment banking business is seriously out of touch with the internal control of securities companies.As the core intermediary of the securities market,securities companies are the bridge between investors and financiers,and are the key link to identify and prevent risks in the securities market.Like most companies,there are many problems in the internal control of securities companies,and because the financial industry in which securities companies are located is characterized by high risks,virtuality and vulnerability,its internal control problems are more prominent than those of ordinary companies.Studying the internal control mechanism of the investment banking business of securities companies not only has micro-values for promoting the standardization,normalization and institutional development of the internal control of securities companies,but also has an important macroscopic view on the smooth operation of the securities market and the sustained and healthy development of the entire national economy.This article consists of five parts: The first part is the introduction of the article.The content of this part mainly introduces the macro background of the repeated violations of the investment banking business of securities companies and the overall situation of internal control of securities companies,and clarifies the importance of improving the internal control of investment banking business of securities companies.Next,the domestic and international research results of internal control and risk management of securities companies are described.Finally,the research methods,research ideas and framework of this paper are briefly introduced.The second part is the theoretical basis.It expounds the concept of investment banking business of securities companies and the theoretical basis of internal control,including the overview of investment banking business of securities companies(the characteristics and basic processes of investment banking business of securities companies),the objectives and methods of internal control of investment banking business,and the main risk points of investment banking business.The third part is the case study.The status quo of XN securities company’s internal control is introduced,including the establishment of the internal control organization of the investment company’s investment banking business,the responsibilities and authority of the internal control department,the compliance reporting system of the investment banking business,and the kernel program of the investment banking business.The fourth part is the case study.The defects and causes of the internal control of the investment banking business of XN Securities are analyzed.Firstly,it analyzes the design flaws and implementation defects of the internal control system of the investment banking business of XN Securities Company,and then deeply understands the deep reasons behind the failure of internal control through the COSO internal control framework.The fifth part is the conclusion.From the above analysis,the defects of the internal control of the investment banking business of XN Securities Company in this case are obtained,and corresponding countermeasures and suggestions are obtained.Through research,it is found that there are four reasons for the failure of the internal control of the investment banking business of XN Securities Company,namely,the internal control environment is weak,the salary incentive system is malformed,the investment banking business process lacks control,and the investment banking business information system is backward.This paper believes that XN Securities Company should strengthen the internal control environment,improve the risk awareness of business personnel,improve the budget system of compensation system and investment bank project expenses,reshape the core process of investment banking business,deepen the quality control and compliance management of investment banking business processes,and promote Measures such as information construction of the internal control system of the investment banking business were improved.