5, ensure that the financial The quality of the reports and provide timely and reliable financial information.
external control environment, as discussed earlier, the organization must be subordinated to society through laws and regulations, professional ethics rules, the competition between different interest groups such as demonstrated by a series of demands, although managers can not easily exert influence on the external environment, but to make the internal control can effectively run, managers must establish an internal control system to recognize and meet the organization's external environment requirements. For example, the customer needs is an increasingly important external requirements. People are looking through management techniques such as total quality management to continuously improve the entire operation of this principle, explicit requirements for internal control should include strict quality assurance and supervision of the organization to meet external requirements.
effectively protect the organization's resources. The scarcity of objective requirements of the organization through effective internal control system to ensure its security and integrity. If the resource is not reliable, damaged or missing, the organizations ability to achieve its objectives will be affected. To protect a variety of tangible and intangible resources, first, to ensure that these resources from damage and loss is to ensure the rational use of assets and the necessary maintenance.
2, the enthusiasm of the staff is to determine the behavioral factors of the internal control running. Understand the control of human behavior, is essential for the effective operation of internal control. To achieve the control objectives, we must recognize that the normal needs of the people, and to minimize the abnormal behavior. Specifically, the full attention and respect for the role of employees in the internal control at the same time, emphasized the enthusiasm of the staff.
(a) internal environmental control
threats of internal controls to run in the threats
internal control refers to the negative phenomena of widespread prevent the internal control goals. Even a well-designed scientific system of internal controls, may also make it difficult to play a role by ignoring the threats of internal control to run. Therefore, we must fully understand and address these threats.
, economic and efficient manner to achieve organizational goals;
, general or special authorization by management authorities business activities;
environmental change. A good internal control system may change its operating environment weakened. Managers must pay close attention to changes in the way of changes in the environment and organizational operation, this change is to seize the opportunity to adjust and improve the internal control system.
internal control target to redefine the error checking and correcting the disadvantages
the development process of the internal control theory, the modern organization, internal control objectives is not in the traditional senseWorld Steel Pipe , but to the organization management of all aspects, showing a diverse, in-depth trend.
, economic and effective use of organizational resources. Because all organizations are operating in an environment of limited resources, an organization the ability to achieve its objectives depends on the ability to fully utilize existing resources to develop and design of internal control must be based on whether the guarantee to obtain the lowest cost high-quality resources (economic) and to prevent unnecessary extra work and waste (efficiency). For example, an organization can economic access to human resources, but may lack the necessary training and inappropriate production plan and the work efficiency is very low. The manager must establish policies and procedures to improve the operation of the economics and efficiency, and to establish operational standards to supervise the action.
3, conflicts of interest. The organization, conflicts of interest, especially senior management and organizational conflict of interest, will control system constitutes a significant threat.
, conspiracy. Incompatible positions and duties, even if we take the means of control, separation of duties, if employees are to attempt a total of collusion and fraud control to guard against the risks and unexpected events still occur.
For an organization, you need to clearly determine the potential risk of loss, and be quantified in order to design and implement cost-effective control program. To control for the purpose of risk assessment, direct focus on the nature of the risk and reliability, as well as feasibility and cost of the corresponding control. Risk assessment can be used to structure risk analysis model to assess the organization's overall risk individual or a business risk.
to protect the assets of the security and information integrity;
1, to adapt to the external control environment, improve the internal control environment. The control environment includes the organization's external environment and internal environment to achieve the highest goal of the organization's internal control must be carefully designed in order to adapt to the environment.
business management activities policy usually has two categories: 1) developed for the completion of management objectives, principles and policies, these policies must be consistent with national laws and regulations. After entering WTO, China's legal construction process will accelerate the construction of the various laws and regulations will gradually move closer to international practice, will be the constant introduction of new laws and regulations, understanding and application of new laws and regulations will be the various types of enterprises business management activities. China's legal construction is not a long time, contrary to the situation of the internal control system with the national laws and regulations have occurred, these illegal phenomena (such as labor law violations) in the community caused adverse effects.
1, to ensure the effective realization of organizational goals. Any organization has its specific target, in order to effectively achieve organizational goals, which constitute the organization's resources (property, human, knowledge, information must be timely), rational organization, integration and utilization, which means that these resources To under control or certain control operations. If an organization fails to achieve its objectives, the organization engaged in their own activities, we must ignore the integral role of resources, ignored the importance of economy and efficiency. A hospital has a good doctor, competent staff and advanced equipment, but if these conditions are not fully used in medical, the hospital is not efficient. For example, if the patient because the hospital poor diet and not make patients recovered, the hospital did not achieve its objectives. Internal control system goal is to promote the goals of the organization. Therefore, all the organizational activities and control activities must be based to promote the organization to achieve the highest goal.
, accounting on the assets of the concept of exclusion of some important economic resources, such as human resources and information. To achieve organizational goals is bound to be of such resources protection and rational development and utilization of, otherwise, the person's ability and knowledge will be destroyed or lost to other organizations. Information theft, abuse and bribe, therefore, focus only on the integrity of information while ignoring its safety is also a one-sided.
risk refers to the event itself, the uncertainty, it has objectivity. Enterprises in the market economy environment. Will inevitably encounter all kinds of risks, in order to avoid risks, risk assessment mechanism should be established. The risk of external risks and internal risks. External risks, including political, economic, social, cultural and natural. Internal risk from the decision-making mistakes, poor implementation, production failure. Risk control should include the establishment of enterprise risk assessment agencies, to prevent circumvention of risk measures, risk information feedback, and guard against the risk reward system. The existence of risk and the objective environment. When these conditions change. The size of the nature of the risk will also change, and has the potential to reduce or eliminate certain spatial and temporal scales.
human resources is the fundamental wealth of the organization gain a competitive edge, high-quality workforce is an organization the ability to act "and amplifier. An organization's staff on behalf of the organization to invest heavily in training, skills and knowledge, its role is difficult to replace. Therefore, the working environment, especially the internal control environment is not only to contribute to their well-being, but also to cultivate their loyalty to the organization.
traditional theory emphasizes the accuracy and reliability of accounting information is accurate, but because of the accounting information system should also collect a lot of non-financial information and internal control needs to ensure all data and information relevant to the decision-making and reliable.
1, the manager is not enough integrity. Internal control in order to make the honest people honest, and can not effectively prevent the moral hazard of managers. In an organization, management (also known as white-collar) If you do not obey the effective operation of the code of ethics will seriously interfere with the control system.
internal control objectives are to achieve the complexity of the constraints to achieve the way
affect internal control objectives. System studied and summarized, we can draw effective way to achieve internal control objectives.
3, cost control is a key factor in assessing control effectiveness. Control only economically viable in the health, safety, and other similar "primacy" of the concept of consideration in order to be implemented. Any control behavior will have costs, cost control, including control of the tangible costs, loss of opportunity and time to the implementation of the control and staff to control the resentment and discontent caused by the loss. These costs in the design and operation of internal control, be sure to not to implement control eventualities arising from errors, inefficiency and fraud organizations subject to the risk of loss associated with trade-offs. In general, the potential loss is the value of a single event, the number of incidents and events that pose a risk function. Potential losses will significantly increase as the value or importance in the organization; a seemingly trivial errors or inefficient because of frequent and they become serious; the nature of certain assets (such as cash) than the other assets more vulnerable to fraud, abuse and destruction of the damage.
these understandings of the traditional theory on the internal control objectives that few, all the motives of internal control, but with the level of excellence of the organization of the external environment continues to change and organizational management, internal control objectives have recognize clearly the existence of certain deficiencies and limitations. In:
addition. Organizations are also a factor in the environmental control organizations under the new situation is the allocation of resources and the ability to play structure, it is the process of the integration mechanism of integrated enterprise capabilities, best allocative efficiency through the deployment of limited resources. Control of the organization is to stimulate cooperation and innovative ability. Able to maintain the best form of this ability is a learning organization, the vitality of the organization from the constant updating of knowledge. Only in this way, the control role of organizations in the environment in order to effectively play.
4, to prevent and detect fraud and error;
the internal control objectives of expansion
accounting information is true and complete both the internal control target, but also a means of internal control basic, very important, accounting is through a true, complete accounting The record of the information, summary reports on the means to achieve corporate accountability for the implementation of the assets of the enterprise and the economic and business activities, supervision and management functions. Under the modern enterprise system and corporate governance structure is not fully developed, the distortion of accounting information has not yet been radical, corporate information is true and complete as the basic objective of internal control is consistent with the current situation of Chinese enterprises.
follow another important aspect of cost-effective, that is, the internal control without leaving any traces into every aspect of the organization and management. We should try to avoid the internal control as part of an independent auxiliary. The reason is that the control into the organization's entire management system can significantly reduce the cost control and good control effectiveness.
3, the traditional theory only emphasizes the operational efficiency, ignored the importance of organizational performance as a measure of economy and effectiveness. Efficiency is a measurement of the relationship between inputs and outputs (the effective operation in the production process produce products with the lowest consumption), economic measure of the cost of inputs (economy operating at low cost to produce products of acceptable quality), the effectiveness of involving to the actual results and objectives.
as a special resource in a modern society, information, and its loss, damage and theft will affect the organization's competitiveness and operational capacity. Therefore, an organization's database to prevent unauthorized access and use.
Overview of internal control objectives
internal control objectives is to determine the internal control operating mode and direction of the key to understanding the internal control of the starting point of the basic theory. From the perspective of the evolution process of the internal control theory, the concept of internal control in general after an internal accounting controls, internal control, internal control structure and the internal control components main stages. Overview of these theories, the internal control objectives are summarized as follows:
2, obey the policies, procedures, rules and laws and regulations. In order to coordinate the organization's resources and behavior to achieve organizational goals, managers will develop policies, plans and procedures, and to oversee the running and make the necessary adjustments in a timely manner. On the other hand, the organization must also obey the laws and regulations formulated by the community through government, external control imposed by the professional ethics rules, and among interest groups and competitive factors. Internal control, if you can not take full account of these external constraints, to provide their will threaten the survival of the organization. Therefore, the internal control system must ensure compliance with all relevant laws, regulations and rules.
(b) Risk control
these recognize the bias and limitations, leading to an important cause of ineffective internal controls implemented in the organization. Therefore, further expand the connotation of internal control, understanding and defining internal control objectives is particularly important.
4, to ensure that the quality of information. In addition, managers need relevant, reliable and timely information to establish organizational goals and communication of policies, plans and methods to control the behavior of the organization. In fact, control and information are inextricably linked, and decision-oriented information subject to internal control, did not complete the internal control will not be able to guarantee the quality of information. In other words, managers need to use the information to monitor and control organizational behavior, decision-making information systems, especially accounting information system is also dependent on the internal control system to ensure the provision of relevant, reliable and timely information. Otherwise, the manager's decision-making is likely to cause irreparable damage to the organization. Therefore, the internal control system must ensure the correctness of the data collection, processing and reporting control.
organization's internal control environment are those by managers of their own subjective efforts and decisions influencing factors. Such as forms of organization, organizational structure, organizational image, employee behavior, resource size and structure, many factors influence and determine the organizational culture of the organization. Organizational culture involves the collective experience of the staff of the organization operating mode, the consensus on how the organization the way. Organizational culture both reflect and affect employee attitudes and behavior, organizational culture is useful, then the control must be conducive to such a culture. In an organization, its culture is bureaucratic and legalistic, employees tend to comply with the "bookishness" behavior; In contrast, customer-oriented culture, "what are likely to occur will be prevalent . Customer needs orientation of organizational culture to encourage creativity and innovation, while the former is negative. The establishment of the internal control objectives and methods of the scientific culture of initiative and innovation culture without losing the mechanical limitations of organizational culture on internal control has an important significance.
Of course, control will be a result of the employees do not understand, sloppy, fatigue and loss of efficiency, at the same time, control may also be due to the employees do not understand or do not agree with hostility and take the negative attitude of these eventualities organizational goals and behavior are a threat. Therefore, a healthy internal control system should not only promote the achievement of organizational goals contribute to positive behavior, but also to prevent harmful behavior and events.
4, the traditional theory implicitly emphasizes the negative role of internal control, that is only emphasized the specific policies and procedures to deter and prevent unnecessary behavior, while ignoring the internal control only "to prevent" Incentive dual function. "Control" is not a simple mechanical "limit" to ensure that the effect of internal control, internal controls must be an organization, an effective mechanism to motivate employees to achieve organizational goals.
risk assessment. Almost all aspects of production and operation risk assessment. In many types of risk control, credit risk assessment and contract risk assessment is the work of the enterprises under the new economic situation a basic and recurrent. Credit risk assessment is the possibility of losses in the recycling process of Accounts Receivable. Enterprises should develop a customer credit evaluation index system, to determine the credit award criteria require the customer credit approval procedures and credit in the implementation of real-time tracking. Contract risk assessment is the process of signing the contract and fulfill a legal dispute led to the corporate respondent World steel pipe network editing , to predict the possibility of losing. To guard against the contract risk. The enterprise shall establish contract drafting, approval, signed, to carry out supervisory and control procedures for response measures in the event of default. Risk assessment is generally subject to the identification, analysis, management and control process, the process of identification and analysis of risk is an ongoing process, is a key factor in effective internal control, but also to provide users with the assurance measures of decision-useful accounting information
(c) policy applicability of control
, but as the market economy continues to improve the competitiveness of enterprises in addition to technical factors, as well as management factors can also be said that the level of management will be the key to the enterprise can continue to survive. In this case, the accounting information is true and complete the basic objective of internal control is not enough. Accounting information users want a variety of decision-making by providing decision-useful accounting information. Therefore, we should put the internal control as a dynamic systems engineering. The objectives of internal controls should be adjusted with the changes in the environment outside the enterprise and internal control should continuously enrich the content and development. Such as e-commerce development of a paperless, no place of the emerging industry, which produced a series of internal control; the emergence of virtual enterprises control subjects and objects identified difficulties. These new circumstances and new problems requiring the existing objectives of internal controls continue to expand and shift the focus. To adapt to environmental changes, internal control objectives need to be extended to the following areas.
in internal control, environmental control has two basic elements of a person, an organization. Is an important factor in the control environment, he is both the main body of the internal control, but also the internal control objects. "" Mainly refers to two groups, the enterprise's employees and management. Internal control objectives, the final decomposition of the implementation to the employees, the employees have a larger impact on the quality of the implementation of the control, internal control is to inspire employees to achieve control objectives enthusiasm. Management internal control of the implementers, managers in a dominant position in the control process, control the extent and effect of the quality of managers have a great relationship. Competition in the market able to flow and optimized allocation of the Human Capital; survival of the fittest rules of the market to create a strong binding incompetent operators should be eliminated. In other words, operators, selection and exit are relying on the role of market mechanism. Only in this way to the rational allocation of human resources, internal control objectives can be effectively implemented, can significantly improve business efficiency.
5, the neglect of the authorities. A serious threat to any control system is to pay less attention of the authorities. A well-designed system of internal controls, if the manager put it aside, it would mean no internal control. The same time, management has ignored the internal control, set a dangerous precedent for the organization's staff, the long run, this trend will be prevalent in the fierce competition, which will undoubtedly set the dangerous situation.
"control" the term is usually linked with the restrictions on movement, however, if you want to remain competitive in the modern organization must not be rigid and lack of flexibility. The face of deregulation, increased competition, vibrant financial markets, the rapid development of technological innovation and liquidity, hopeful labor, the modern organization needs more than ever, sharp and vibrant. Policies and procedures to maintain a reliable system and to ensure consistent action necessary, but if these procedures and systems are too repressed and binding, once the problems, the staff will be unable to resolve. Therefore, organizations should strive to foster a reward staff, to encourage innovation, integrity and reliable control of the environment.
early hierarchical structure compared to the modern organization more flexible and to encourage employees more involved in management. Even in the most simple organization, the interaction of organizational structure requires common goals and guidance to achieve these goals through strategic and tactical decision-making and operation of the control process. Although the control is intended to regulate organizational behavior to achieve organizational goals, but this does not simply reduce that impede the realization of the objectives. In order to prevent and solve the problem, the internal control system must encourage the behavior of those who have a positive effect on the achievement of organizational objectives. Internal control is an inherently "inspire those activities have a positive effect on the achievement of organizational objectives; dual function to prevent the threat to organizational goals".
2) the choice of accounting policies in the agency relationship, the operators often take advantage of the asymmetry of information by selecting a favorable accounting policies to manage earnings. Flexibility and variability of the economic business, accounting methods, procedures, there are certain choices, select the goal is to better reflect the financial position and operating results, select only the useful decision making. But in the actual management of the process operators to use the advantages of internal control to select accounting policies do not meet the actual situation. To a certain extent, this choice affects the quality of accounting information. In order to avoid the occurrence of this phenomenon, it is necessary to monitor the implementation of the policies in the enterprise management through a system of internal control by comparative analysis of policy options to meet the requirements of the laws and regulations, in line with the requirements of the business objectives.