Research On Internal Control Optimization Of ZY Rural Bank

Rural banks are the smallest entities in China’s financial system.They not only have the characteristics of flexible operation and strong adaptability,but also have the particularity of serving customer groups with low knowledge level and poor risk resistance ability,but also have strong loan demand and small amounts.Rural banks actively respond to national policies,implement rural revitalization strategies,assist in inclusive finance,and provide high-quality services,which can greatly alleviate the financing difficulties and expensive problems of small and micro enterprises,"agriculture,rural areas,and farmers",and private enterprises,and become a bridge that connects the county economy to the last mile.But recently,the economy has been hit hard,and the development of the banking industry has been hindered.In addition to facing the uncertainty of the external environment,village banks are often criticized for their internal management.For example,in the first half of 2022,six village banks in Henan and Anhui were successively exposed to thunderstorms.This incident has sounded an alarm bell for the management of village banks.In order to assist village banks in eliminating internal and external threats,while ensuring the correct implementation of strategic guidelines,sound internal control is particularly important in the operation and management of village banks.Currently,more than 60% of China’s rural banks are located in the central and western regions of China.The research object selected in this article is the ZY Rural Bank located in a district or county in Chongqing.This bank has a short history of establishment and rapid development,but at the same time,it also exposes internal control gaps that need to be addressed in operational management.The theoretical basis of this article is mainly around the theory of five elements of internal control to design questionnaire questions and analyze the defects and causes of internal control of ZY village banks.At the same time,it also uses the principal-agent theory to analyze the corporate governance structure.In the early stage,the basic status quo of internal control of village banks and ZY villages and towns across the country was described by reviewing and sorting out domestic and foreign literature on internal control of village banks and the rules and regulations related to internal control of ZY village banks.This article adopts the questionnaire survey method and interview method,in which the implementation object of the questionnaire survey is the entire staff of the bank,and introduces a reliability and validity test on the questionnaire results,revealing such defects as poor applicability of the internal control environment,weak risk identification ability,low efficiency of control activities,lack of information and communication,and formalized supervision and control activities;Then select experienced employees from each department to conduct on-site interviews,verify the defects again,and analyze the causes from the five aspects of internal control environment,risk assessment,control activities,information and communication,and supervision and feedback.At the same time,summarize and extract from the interviews to improve the internal control environment construction,establish a reasonable and applicable risk management system,clarify the division of responsibilities Improve the efficiency of information communication and implement the recommendations of post supervision evaluation.The optimization research on the optimization of the bank’s internal control will not only help the bank to discover the shortcomings in the implementation of its internal control in a timely manner,but also propose improvement countermeasures for the shortcomings,hoping to help the sustainable development of the bank and maximize the effectiveness of internal control in operation management and supervision.At the same time,as a typical village bank,the bank also hopes to further enrich the theoretical and empirical research on the internal control of village and town banks in China,and provide certain guidance and reference for other village and town banks.