With the further opening up of China, there are more and more Sino-foreign joint ventures in China. Establishing and strengthening audit supervision of joint ventures is a necessary measure to ensure the healthy development of joint ventures and an important way to ensure the preservation and appreciation of domestic investment. The internal audit supervision of joint ventures is different from that of ordinary units, and has its own characteristics in the establishment of audit projects, audit handling, audit focus and so on. The following author only talks about some views on the characteristics of internal audit of joint ventures.
I. The audit items shall be decided by the board of directors, and the audit institution shall entrust the investor's internal audit institution.
According to the Law on Chinese-foreign Joint Ventures and its implementing regulations, the organization of a joint venture is the board of directors and the management organization, and there is no shareholders' meeting. The board of directors is the highest authority of the joint venture and decides all major issues of the joint venture. At present, most joint ventures have not set up independent internal audit institutions, and their internal audit is generally entrusted by the board of directors to conduct internal audit of joint ventures. The usual practice is that the board of directors entrusts the internal audit departments of all shareholder units to form a joint audit team for audit. In view of the above situation, as the internal audit supervisor of the investment unit, after the implementation of the audit, the joint audit team generally does not make an audit decision on the joint venture, but only puts forward an audit opinion. The joint audit team will send the audited audit opinions to the chairman of the audited unit and notify the unit director to send them. The chairman will hold a board meeting to study and discuss the audit suggestions or opinions.
Second, the purpose of the audit is very clear. The goal of internal audit of joint venture is clear, and the first thing is to protect the property safety of Chinese and foreign investors.
The task and responsibility of internal audit is to expose and punish all kinds of violations of enterprise property. Through internal audit, we can know what the management organization is doing, how it is doing, whether it decides to operate according to the wishes of investors, whether there is moral hazard or adverse selection of operators, which leads to the loss of shareholders' wealth and profits from it. The board of directors of the joint venture company understands the performance of managers by reading the internal audit report, so as to decide the salary and treatment of managers and whether to stay or not.
Three. Relevant information should be collected in the pre-trial investigation stage according to the characteristics of the joint venture.
In the pre-trial investigation stage, the key materials to be collected should be: the articles of association of the joint venture, the capital contribution certificates of all parties to the joint venture, the annual financial report of the joint venture during the audit period and the audit report of the accounting firm on the annual report, the types of related transactions with shareholders (especially foreign shareholders), the company's main suppliers and sales customers, government approval, tax preferential policies, all bank accounts of the company, and various internal rules and regulations of the company.
The articles of association of a joint venture is a document that stipulates the purpose, organizational principles and management methods of a joint venture with the consent of all parties to the joint venture according to the principles stipulated in the joint venture contract. This is also a necessary legal document for the establishment of a joint venture. Through the articles of association of the joint venture, we can understand the following contents: the purpose, business scope and duration of the joint venture; Names, countries of registration, legal addresses, names, positions and nationalities of legal representatives of the parties to the joint venture; Provisions on the total investment, registered capital, capital contribution, capital contribution ratio, capital contribution transfer, profit distribution and loss sharing ratio of a joint venture; Responsibilities and appointment and removal methods of the board of directors, general manager, deputy general manager and other senior management personnel; Principles of financial, accounting and auditing systems; Principles of finance, accounting and auditing system.
The Accounting System for Enterprises with Foreign Investment stipulates that the annual statement and liquidation statement of a joint venture shall be accompanied by the audit report of a certified public accountant in China. This kind of audit report mainly focuses on the authenticity of enterprise assets, liabilities, profits and losses, and should fully refer to the external audit results when making internal audit plans.
Four. Matters needing attention in audit implementation stage.
(1) In the audit, we should pay attention to whether the joint venture has implemented the principle of equality and mutual benefit in accordance with the provisions of the contract and articles of association, whether one party has seriously infringed upon the interests of the other party, and whether it has sent directors against the wishes of the investors and infringed upon the interests of the investors. This situation should be fully disclosed in the audit report. This kind of thing is common in the following forms:
1, foreign investment is false. At the initial stage of the establishment of a joint venture, we should focus on reviewing the capital contribution, such as whether the capital contributions of all parties to the joint venture are in place in time and in full, whether the equipment invested is overpriced and whether the technology invested is advanced and applicable, so as to ensure the authenticity and legitimacy of the paid-in capital of the joint venture. During the audit of Sino-foreign joint ventures, it was found that most of the capital invested by the foreign party was in kind, mainly all kinds of equipment, and only a small part was cash or non-cash. Some contracts stipulate that both parties will invest in cash, and the foreign party will open a letter of credit to buy equipment overseas on the pretext of reducing remittance and remittance procedures, which is actually equivalent to physical investment. It is difficult for us to grasp its true and accurate price, and the handlers have a certain rebate, which is quite considerable. When we verify the capital, we must determine the paid-in capital according to the price provided by the invoice. It is impossible to know how much the foreign party actually paid, which is equivalent to harming the interests of domestic investors in disguise.
2. Joint venture is not joint venture, which loses the purpose of joint venture and makes domestic investors unable to get the due investment income. The investment motive of some foreign investors is to promote equipment or raw materials. They use equipment as capital contribution, offset their paid-in share capital with high profits from selling equipment, and even make a big profit. In order to buy cheap raw materials, some try to lower the price as much as possible in the name of underwriting the export of products, and then sell them abroad at high prices to obtain high commercial profits; Others sell raw materials to joint ventures at high prices, making the cost of enterprises too high and unable to achieve profitability. They don't intend to get dividends from the joint venture. They are only interested in making money for themselves, regardless of the interests of China investors.
Analysis on the Internal Audit Characteristics of Sino-foreign Joint Ventures: Free www.paper800.com on Paper Network
3. Foreign shareholders occupy the funds of the joint venture company for free and become registered capital in disguise during the operation period. In some joint ventures whose suppliers are foreign shareholders, joint ventures are often required to pay in advance when purchasing raw materials; In some joint ventures whose sales customers are mainly foreign shareholders, the amount of accounts receivable is large and takes a long time, so it cannot be recovered in time. The daily working capital of the joint venture even depends on short-term loans, which virtually increases the cost of the enterprise; Some foreign shareholders have also withdrawn cash from the joint venture by borrowing, and have been in a state of withdrawing registered capital for a long time.
(2) Audit focus of internal control of joint venture. 1. During the audit, it is necessary to understand the leadership system of the joint venture and see whether its board of directors can hold regular meetings, make decisions on major issues and play its due role. Check whether there is a situation in which one party or Mozambique's managers override the board of directors and directly impose their will on the enterprise.
2. The internal control system of a joint venture is generally decided by the board of directors, and special attention should be paid to the internal audit. Article 33 of the Regulations on Financial Management of Foreign-invested Enterprises stipulates that "the standards and management measures for expenses such as travel expenses, food subsidies and board members' fees of foreign-invested enterprises. It should be made by the board of directors and reported to the competent financial authority or the competent department of central enterprises for the record. " This practice is actually a restriction on managers, requiring operators to maximize the interests of shareholders in the course of operation and not to charge fees at will. In the actual audit, we often encounter some reimbursement regulations, expense responsibility system, salary and bonus distribution system formulated by the company's management, which have not been reported to the board of directors for the record or approved by the board of directors. External audit generally pays little attention to internal control system, and the board of directors lacks effective ways to understand this aspect, so internal audit should focus on it.
(3) Preventing moral hazard and adverse selection risk of operators is one of the objectives of internal audit of joint ventures. The moral hazard of operators is mainly reflected in the fact that operators have done nothing wrong, but they have not worked very hard to increase their leisure time. Doing so does not constitute a legal and administrative responsibility issue, but a moral issue, and internal audit cannot give an exact evaluation. Adverse selection of managers refers to the goal that managers abandon shareholders for their own goals. In joint ventures, it is mainly reflected in the following two aspects: first, the preparation of Sino-foreign joint ventures is not only to introduce capital, but more importantly, to introduce advanced technology and advanced management methods. Some operators often use the advanced technology and management methods introduced by joint ventures to register companies in the name of themselves or their families and engage in enterprises that have commercial competition with joint ventures in order to achieve their own profit goals. Second, operators transfer advanced technology or management measures privately in a paid way and profit from them.
(D) Costs and expenses are not true, and there are many columns with few columns or many columns with imaginary columns. The joint venture lacks a strong supervision mechanism. In order to achieve the assessment goal of the board of directors, the management of the joint venture has become more and more concealed in falsifying expenses. Certified public accountants are the legal audit supervisors of foreign-invested enterprises, but they can't audit Chinese or other affiliated enterprises, which makes it possible for joint ventures to adjust their costs through current accounts; Tax supervision is also divided into internal and foreign-related, and rarely joint operations, which gives enterprises the opportunity to overstay their costs to some extent.
(5) The foreign-related business of the joint venture fails to fulfill the obligation of withholding and remitting according to the regulations, which brings the risk of tax inspection. Article 19 of the Income Tax Law of People's Republic of China (PRC) for Enterprises with Foreign Investment stipulates that "if a foreign enterprise obtains profits, interest, rent, royalties and other income in China without establishing an institution or place in China, or establishes an institution or place, but the above income has no actual connection with its institution or place, it shall pay 20% income tax". The income tax paid in this paragraph shall be paid by the taxpayer as the actual beneficiary and the payer as the withholding agent. The tax shall be deducted by the payer at the time of each payment, and the withholding income tax return shall be submitted to the local tax authorities.
5. The laws and regulations for making audit opinions and decisions according to law are different from those of other enterprises.
The audit of Sino-foreign joint ventures shall be based on the Audit Law of People's Republic of China (PRC), the Law of People's Republic of China (PRC) on Sino-foreign Joint Ventures, the Accounting System for Foreign-invested Enterprises, the Financial Management Regulations for Foreign-invested Enterprises and the Income Tax Law for Foreign-invested Enterprises. At the same time, the articles of association of the joint venture and the decisions and minutes of the board meeting can be used as the audit basis. For the problems found in the audit, the qualitative basis must be sufficient and accurate, and the audit opinions must be appropriate and feasible. These bases must be stated in the audit report for discussion and study by the board of directors.
In a word, compared with the internal audit of other organizations, the internal audit of Sino-foreign joint ventures has its own characteristics. In practical work, an effective audit plan should be formulated according to these characteristics, and the legitimate rights and interests of Chinese and foreign investors should be safeguarded from an objective and fair standpoint, while the national interests should not be infringed, so as to achieve the audit purpose of promoting the healthy development of joint ventures.
Cultural differences between Chinese and foreign joint ventures: conflict and integration
Joint venture is not only the basic form of utilizing foreign capital in China, but also an important channel for China to introduce advanced technology and equipment and learn from foreign advanced management experience. However, it must be noted that because Chinese and foreign partners come from different countries and regions, with different social, political, legal systems and cultural backgrounds, the resulting business philosophy, management decision-making thinking and enterprise behavior are also very different, so management conflicts are inevitable in the process of cooperation. It is of great significance to correctly understand the cultural differences between China and foreign countries, strive to integrate different cultures and eliminate management conflicts, so as to promote the development of joint ventures.
Different cultural backgrounds, especially the differences between Chinese and western cultural backgrounds, are manifested in many aspects in the management of joint ventures. To sum up, these differences mainly include:
(1) values. The core structure of the value system is different, which is manifested in the cultural conflict of personality orientation.
Oriental culture, represented by China and Japan, developed on the basis of Confucian ethics. This is an agricultural culture with peasant society as the main body, and also a patriarchal system culture based on patriarchal blood relationship; Western culture, represented by Europe, America and other countries, is developed on the basis of ancient Greek culture and Jewish Christian culture, and is a commercial social culture and civil social culture with civilians as the main body. Therefore, the development direction of eastern culture is to emphasize group, morality and practicality, while the development direction of western culture is to emphasize individual, science and speculation. These two different cultural systems determine the overall differences in the construction and development orientation of personality traits between the East and the West.
Oriental personality embodies the interpersonal role cognition and behavior pattern accumulated in long-term agricultural culture. Personality needs and self-value orientation. Its basic characteristics are: strong dependence and introversion; Taking the harmony of nature as the truth; Taking interpersonal harmony as good and harmony between man and nature as beauty; Pay attention to frugal, closed and leisurely behavior; Pay attention to family members. Western personality is a synthesis of values, social mentality and behavior patterns formed under the influence of western religious culture and commercial civilization. Its basic characteristics are: strong autonomy and individualistic experience; It has obvious extroverted and open color; It embodies the model of equality and democracy in social communication.
(2) management mode. Different market systems show cultural differences in economic models.
Anglo-American market economy, German social market economy and Japanese market economy are three representative forms of capitalist market economy model. These different market economic models mean different cultural backgrounds and values. Based on the different price orientations, the market economy in the United States and Britain is called individual capital Doctrine, while the market economy in Japan and Germany is called enterprise capitalism. The basic difference between the two is that the former emphasizes personal value, enterprise profit maximization and consumer economics; The latter emphasizes the value of community, emotional investment of enterprises and producer economics.
As the basis of market economy, multinational corporations fully embody the relationship between culture and economy. Multinational companies usually have strong economic strength, and global business strategy provides them with development opportunities. However, due to the contradiction between strategic objectives and implementation behavior, the global strategy of multinational corporations is often in trouble. Pluralistic and definite international cultural environment and cultural friction are the fundamental reasons why multinational companies lose market opportunities, have low efficiency and are difficult to achieve expected benefits. The global strategy of multinational corporations is hindered by the cultural troubles faced by multinational corporations or the neglect of cultural friction by managers. A decision is impeccable in theory, but it encounters many obstacles in implementation; The same decision is quite effective in A, but it may not be handy in B, or it is because the friction caused by culture is difficult to be overcome by business strategies such as product diversification and complex organizational structure, and the deviation caused by culture can only be corrected by adjusting culture.
(3) organizational structure. From the perspective of hierarchical system, it is manifested as cultural conflict in organizational design. The influence of cultural factors in enterprise organizational design is mainly reflected in two aspects: one is to clarify the position and role of individuals in the organization and maintain a certain power distance. The second is to establish an appropriate management control system and correctly evaluate the degree of personal efforts. In an organization with a large distance of power, the position and role of individuals in the organization is not so important, and collectivism tends to dominate. In this cultural atmosphere, the evaluation system and methods of the organization are organized by managers, and the training and reward mechanism is established by groups. Each member regards himself as a member of the cooperative body and maintains close cooperative relations with other members. On the contrary, in organizations with small power distance, individualism requires that performance evaluation must be based on individual behavior, efficiency and achievements, and fully affirm the contribution to individual organizations.
Some foreign enterprises are often confused by the failure of well-designed goals when organizing design. As we all know, the operating performance of foreign-funded enterprises depends not only on their own strategic planning and organizational nature, but also on the economic development level and culture of the host country. The work motivation and values of different nationalities directly affect the performance of overseas investment. Europeans pay attention to power and status, Americans appreciate innovation and achievements, and Japanese advocate team spirit and coordination. Relevant research also shows that people's value orientation will change at different stages of a country's economic development. In times of economic difficulties, individuals are more willing to accept authoritarian or paternalistic channels; During the economic boom, people tend to demand fairness and democracy. Collectivism culture makes
Enterprises can adopt a joint international competition strategy; Individualism-oriented companies often participate in the competition on the basis of emphasizing the maximum profit of a single company, and rarely unite with other companies. Even the government has restricted the cooperation between enterprises by enacting anti-monopoly laws. For example, Japanese companies emphasize the spirit of cooperation, which is a non-price trade barrier that can effectively prevent foreign competitors from entering. American enterprises do not have this interdependent relationship. Individualism culture determines that they can improve product quality and win competition through innovation and creation. Compared with collaboration, they hope that their wisdom, skills and contributions will be recognized and rewarded by society. In other words, it is easier for enterprises with advantages in technology and product quality to enter the American market than the Japanese market.
(4) Management culture. Decision-making thinking is different from mode, which is manifested in cultural conflict in management. With the development of management science, people's position and role in enterprises have experienced three leaps: from economic man who pursues material and economic interests to social man in social relations, and then to cultural man who is dominated by values. All excellent enterprises attach importance to corporate culture and the role of people as the main body of corporate culture in enterprise innovation.
Oriental culture, like flowing water, is the easiest culture to survive in the world, and one of the important reasons is its strong adaptability and flexibility. However, the inevitable result of being too flexible is not paying attention to the establishment and implementation of the formal system, taking a pragmatic attitude towards environmental changes and adapting to the times. Therefore, in enterprise management, the system is often ignored by enterprise managers. Enterprise managers have no interest in formulating systems, and even when implementing formal systems, they are often abandoned "flexibly" because of so-called special circumstances or special needs. The role of the formal system has been weakened, and we can only rely on "rule by man". In this way, the level of morality, knowledge and ability of managers determines the success or failure of enterprises. A declining enterprise may become prosperous by changing a leader. On the contrary, successful enterprises may get into trouble because of the adjustment of leadership. It is not uncommon for one person to start a factory and one person to close down.
Western culture is based on system, and enterprise management pays attention to principles and pursues efficiency, but it also has inevitable defects.
Cultural differences between Chinese and foreign joint ventures: conflict and integration
First, the integration of high-level decision-making and business philosophy culture means that both sides have their own business objectives, business objectives, business philosophy and decision-making thinking. The infiltration and integration of decision-making mode, etc., strive to make both parties' business objectives consistent, business ideas integrated, decision-making thinking interlinked, and decision-making mode in line with objective reality.
Second, the middle management culture of enterprises includes the integration of management ideas, management methods and management styles.
Most foreign managers of joint ventures grow up in a mature market economy environment and keep in touch with foreign parent companies. Most of them have a set of modern enterprise management ideas, management theories and management methods that meet the market requirements and reflect the changes of the times. This requires China managers to abandon conservative psychology, learn useful advanced management theories and experiences with an open mind, and boldly absorb them.
In short, a management system with standardized system, novel concept, scientific method and flexible mechanism should be formed through complementary ideas, system establishment, mutual learning of methods and mechanisms. Realize autonomy in decision-making, be completely market-oriented in operation, form its own characteristics in products, be well received by consumers in corporate image, establish a people-oriented concept in tariffs, and form a standardized on-the-job training and personal career development plan and an effective incentive mechanism.
Third, the integration of corporate mass culture includes the integration of values, customs, life and behavior. Enterprise culture plays a soul role in enterprise management. The corporate culture of a joint venture is the internal unity and external expression of the integration of Chinese and foreign cultures, and the multi-faceted integration of Chinese and foreign cultures can be realized in the highest form through the construction of corporate culture.
A joint venture should aim at the integration of Chinese and foreign cultures and good cooperation between the two sides, fully grasp the characteristics, advantages and disadvantages of Chinese and foreign cultures, absorb the essence of the two cultures, achieve "learning from each other's strong points, learning from each other's strong points, creating characteristics", and pay attention to combining the actual situation of the enterprise to form a whole culture composed of production and operation organizations, technologies, products and management with its own characteristics; Form a unified business philosophy, unified enterprise purposes and objectives, unified management ideas, unified enterprise ethics and code of conduct. This can not only eliminate the differences and conflicts between Chinese and foreign cultures, but also better integrate these differences, form a common goal, a harmonious working atmosphere, strong cohesion and centripetal force, and thus achieve good cooperation between the two sides.
Establish a people-oriented thinking, form a standardized on-the-job training and personal career development plan and an effective incentive mechanism.
Third, the integration of corporate mass culture includes the integration of values, customs, life and behavior. Enterprise culture plays a soul role in enterprise management. The corporate culture of a joint venture is the internal unity and external expression of the integration of Chinese and foreign cultures, and the multi-faceted integration of Chinese and foreign cultures can be realized in the highest form through the construction of corporate culture.
A joint venture should aim at the integration of Chinese and foreign cultures and good cooperation between the two sides, fully grasp the characteristics, advantages and disadvantages of Chinese and foreign cultures, absorb the essence of the two cultures, achieve "learning from each other's strong points, learning from each other's strong points, creating characteristics", and pay attention to combining the actual situation of the enterprise to form a whole culture composed of production and operation organizations, technologies, products and management with its own characteristics; Form a unified business philosophy, unified enterprise purposes and objectives, unified management ideas, unified enterprise ethics and code of conduct. This can not only eliminate the differences and conflicts between Chinese and foreign cultures, but also better integrate these differences, form a common goal, a harmonious working atmosphere, strong cohesion and centripetal force, and thus achieve good cooperation between the two sides.