Abstract Internal control is an important symbol of modern enterprise management. Strengthening and improving the internal control system of enterprises has become the only way for enterprises to survive and develop. Improving the internal control system of the enterprise, improving the corporate governance structure and management information are of great significance to the development of the enterprise. This article explores the current status and existing problems of internal control in unlisted state-owned enterprises, and explores how to improve and enhance internal control.

Keywords internal control; state-owned enterprises; countermeasures

The so-called internal control refers to a unit's ability to achieve its business goals, protect the safety and integrity of assets, and ensure the accuracy and reliability of accounting information. , a general term for a series of methods, procedures and measures for self-adjustment, restraint, planning, evaluation and control within the unit to ensure the implementation of business policies and ensure the economy, efficiency and effectiveness of business activities. The purpose of enterprise internal control is to improve business management and increase economic efficiency. It arises from the need to strengthen business management and develops and improves with the development of the economy. The earliest controls focused on protecting the safety and integrity of property and the accuracy and reliability of accounting information, focusing on control over separate management of money and materials, strict procedures, and strengthening review. With the development of the commodity economy and the expansion of production scale, economic activities have become increasingly complex and have gradually developed into internal control systems.

On April 26, 2010, five ministries and commissions including the Ministry of Finance, the China Securities Regulatory Commission, the National Audit Office, the China Banking Regulatory Commission, and the China Insurance Regulatory Commission jointly issued the "Corporate Internal Control Supporting Guidelines" (Cai Kuai [2010] No. 11), together with the 2008 The "Basic Standards for Enterprise Internal Control" released in 2017 marked the establishment of my country's enterprise internal control standard system. According to the provisions of the documents of the five ministries and commissions, the system has been implemented step by step in my country's listed companies and unlisted large and medium-sized enterprises since January 1, 2011.

1. The current situation of internal control of state-owned enterprises in my country

Since the 1990s, with the development of the economy and the deepening of reform and opening up, Chinese enterprises have gradually begun to pay attention to the impact of internal control on enterprises. positive effects on operations. From the perspective of endogenous factors, as the company's scale continues to expand, this is due to the need to cope with increasingly fierce market competition and meet the needs of business expansion; from the perspective of exogenous factors, its motivation mainly comes from the requirements of various regulatory agencies. At present, the internal control levels of state-owned enterprises are very different. There are companies with internationally leading internal control levels, while there are also companies with internal controls that are still in a primitive state or even lack internal controls.

According to the "Guidelines on Internal Control of Listed Companies" issued by the Shanghai Stock Exchange and the Shenzhen Stock Exchange, although listed companies generally publish internal control self-assessment reports, there are still only a few companies that have issued internal control audit reports. What's more, the internal control level of my country's unlisted state-owned enterprises is generally lower than that of listed companies. However, based on regulatory requirements and corporate development needs, most companies have already begun to build internal controls.

In unlisted companies, after the company reaches a certain scale, especially after the number of branches increases, the business area expands, and the industries involved are diversified, the top management has control over the subordinates due to the "multiple points and wide range". The business and financial information of the unit will produce deviations. Therefore, enterprises often put forward the need for internal control out of their own needs. Therefore, state-owned enterprises carry out internal control work relatively early. However, due to the limitations of external regulatory requirements, the internal control level of unlisted companies basically depends entirely on the ideas and wishes of their top managers. Therefore, the current internal control level of state-owned enterprises in various countries is uneven.

2. Analysis of problems and causes of internal control in my country’s non-listed state-owned enterprises

After years of operating system reform, Chinese enterprises have gradually established Relatively supporting business processes, supervision systems, auditing and internal control systems have been put in place. Although some progress has been made, there are still internal control deficiencies in management. The author believes that the specific problems and reasons are mainly reflected in the following two aspects:

(1) Internal control environment

1. Due to long-term operation under the planned economic system, it has been subject to administrative intervention for a long time , the influence of the appointment system of senior management organizations, and the concept of internal control of enterprises is weak. After the reform of the economic system, the separation of government and enterprises remains theoretical to a certain extent, and enterprises do not operate completely independently in practice.

2. The corporate governance structure that modern enterprises should have has been weakened. Theoretically, corporate governance is based on the structure of "separation of powers" and "mutual checks and balances" among the shareholders' meeting, the board of directors, and the board of supervisors. A sound governance structure is conducive to the effective operation of internal control. However, in practice, the functions of the corporate governance structure have been weakened, and companies have failed to fundamentally establish a corporate governance mechanism that meets the needs of corporate development.

3. Enterprises lack the inherent need for risk assessment. In the era of planned economy, planning replaced the resource allocation function of the market. In the era of market economy, risks are everywhere. However, many companies still make business decisions with the color of planned economy, and even make decisions based on "patting their heads", which has no influence on the market. Risk awareness is insufficient, let alone assessment and quantification. In the absence of corresponding internal control mechanisms, decisions are largely made based on the management's feelings, and the development of the enterprise can only be blind.

4. Internal and external supervision mechanisms.

On the one hand, because the organizational structure of Chinese enterprises is often hierarchical, their internal control supervision mechanism is only a top-down subordinate supervision mechanism. On the other hand, external supervision mainly comes from local competent departments and audit authorities, and the motivation for supervision is administrative. Neither internal nor external supervision is entirely based on interest concerns.

(2) Internal control mechanism

1. The internal control subject is absent. At present, the boards of directors and managers of many state-owned enterprises are basically "two brands, one set of people". The company's operating decision-making power is concentrated in the hands of insiders, resulting in the absence of corporate property rights entities, unclear rights and responsibilities, and the need to strengthen internal control. The beneficiary subject is vague, and the controlling subject is in name only. Not to mention internal control rising to the level of corporate governance to prevent certain insiders from eroding the interests of owners.

2. Internal control objectives are simple. The foundation of internal control lies in the positioning of internal control objectives. Internal control objectives should not only include the accuracy, truthfulness, completeness and effective protection of accounting information, the enterprise's operating efficiency, the reliability of reports, and compliance with laws and regulations, but also include the enterprise's strategic goals and other contents. However, the operators of state-owned enterprises in my country often only start from a simple perspective, treating headaches and pains, and rarely consider the governance level.

3. Weakening of internal control execution. At present, most state-owned enterprises generally develop a series of internal control systems based on specific circumstances, and some have even refined them to control links and control points at various levels. Formally speaking, internal control has been solidified in words. However, in reality, the implementation of internal control is unsupervised and difficult to implement. As a result, rules are not followed, rewards and punishments are not strict, and the internal control system of the unit is only "written on paper and hung on the wall."

4. Internal control lacks corporate culture support. Corporate culture has a profound impact on internal controls. A good corporate culture provides an excellent environment for the implementation of internal controls. However, the lack of a corporate culture recognized by all employees makes it difficult for employees to identify and implement internal control regulations, which greatly reduces the implementation of internal control systems.

3. Countermeasures to strengthen internal control of Chinese enterprises

(1) Continuously improve the corporate governance structure of modern enterprises

It is necessary to strengthen mutual checks and balances among the board of directors, management and supervisory boards In particular, it is necessary to enhance the voice of the shareholders' meeting and form an internal governance structure with clear rights and responsibilities, coordinated operation, effective checks and balances, and suitable for the company's development requirements as soon as possible.

(2) Incentives and constraints must be combined in internal management

Only by achieving an organic combination of incentives and constraints in internal management can managers have both complete business management rights and Enhance the awareness of fulfilling fiduciary obligations with due diligence, thereby maximizing corporate value.

(3) Implement a strict assessment system with clear rewards and punishments

Effectively implement the internal control system, and achieve rewards that make everyone envious and even jealous in terms of spiritual, material and even job promotions. For those who violate regulations or even cause heavy losses, they must not only be linked to job appointments and removals, but also be given corresponding disciplinary sanctions. Financial penalties must also have a sufficient impact on the parties involved.

(4) Strengthen the control of the internal accounting system

First, it is necessary to clarify the responsibilities and authorities of accounting personnel; second, it is necessary to strictly enforce accounting work disciplines and procedures, so as to act in accordance with the rules , reduce human intervention, improve accounting management efficiency and quality, and prevent risks. In this way, the enterprise's internal control awareness can be effectively implemented and controlled in micro-economic activities, the whole system is established, strict discipline is implemented, the level of control is improved, and reform and control together become an effective way for enterprises to resolve risks and create benefits.

(5) Strengthen the performance of internal audit functions

On the one hand, it is necessary to strengthen the construction of the audit team, enrich the audit strength, and improve the overall quality of the auditors; on the other hand, it is necessary to pass strict assessment Rewards and punishments can improve the subjective initiative of auditors. In addition, the scope of auditing should be expanded from the current special auditing based on financial revenue and expenditure, infrastructure, etc., to the implementation and evaluation of the internal control systems of each unit. Units that have the conditions to do so must establish an internal control and compliance department to handle internal supervision functions.

(6) Highlight the effectiveness of external supervision

According to relevant regulations, finance, taxation, auditing and competent authorities must form a joint force to increase law enforcement and implement effective internal control of enterprises. Supervise and promote state-owned enterprises to continuously improve internal controls. At the same time, it is necessary to establish and improve relevant laws and regulations so that the accounting firms hired by enterprises can further audit the internal controls of enterprises and provide objective evaluations on the basis of effectively performing their financial audit functions.

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