Enterprise internal control environment determines whether other control elements can play a role, is the basis for other factors to play a role, directly affects the implementation of enterprise internal control, and is the core of enterprise internal control. The Cao incident was caused by serious defects in internal governance structure and ineffective external governance intervention.
Second, information system distortion.
Cao (Singapore) cheated his superiors by making false accounts. The local regulatory authorities in Singapore have not found that Cao Singapore Company was also rated as the most transparent listed company in Singapore in 2004. Such a big loophole was covered up by Chen Jiulin's false accounting for so long that it happened without warning.
Third, management is out of control and supervision is ineffective.
Director of CAO (Singapore) and head of the asset and financial management department of CAO Group have never reviewed the company's annual report. However, internal audit usually exists in name only, and this kind of supervision is equal to nothing. In the course of operation, the internal control failed, the supervisory functions of the board of directors and the board of supervisors were vague, and the necessary internal audit was lacking, thus forming Cao's tragedy.
On June 9th, 2005, Chen Jiulin and other five senior officials of CAO (Singapore) were formally charged. Chen Jiulin faces 15 charges, including publishing false news, forging documents and being suspected of insider trading. The maximum penalty is 94 years' imprisonment and a fine of S $250,000. A few days later, Chen Jiulin was released on bail after raising S $2 million (US$ 654.38+200,000).
2. On March 15, 2006, Chen Jiulin pleaded guilty to six counts in the Singapore court, including conspiracy to defraud Deutsche Bank in 2004, forging financial documents, making false or misleading statements, engaging in insider trading, and failing to disclose the company's huge losses to the Singapore Stock Exchange in time. On March 2 1, the Singapore Basic Court sentenced Chen Jiulin and Chen Jiulin to four years and three months' imprisonment and fined S $335,000.
3. On February 6, 2007, China State-owned Assets Supervision and Administration Commission announced the decision on handling the CAO incident: Jiao Changbin, former general manager of CAO, was ordered to resign, and Chen Jiulin, former deputy general manager and general manager of CAO, was "double-fired". Sun Li, the newly appointed party secretary of Cao Group, took over as general manager. Before joining Cao Group, Sun Li was the general manager of China Petrochemical Sales Company.