The so-called internal control refers to the policies, measures and procedures formulated and implemented by enterprises to ensure the effective conduct of business activities, protect the safety and integrity of assets, prevent, discover and correct errors and frauds, and ensure the truthfulness, legality and integrity of accounting data. Broadly speaking, enterprise internal control refers to the enterprise internal management control system, including a series of necessary management measures to ensure the normal operation of enterprises. Internal control can be divided into accounting control and management control according to its different control purposes. Accounting control is related to protecting the safety of property and materials, the authenticity and integrity of accounting information and the legitimacy of financial activities. Management control refers to the control related to ensuring the implementation of business policies and decisions, promoting the economy, efficiency and benefit of business activities and realizing business objectives. Accounting control and management control are not mutually exclusive and incompatible. Some control measures can be used for both accounting control and management control.
The goal of internal control is to ensure the efficiency and effectiveness of business activities, the safety of assets and the reliability of economic information and financial reports. Its main function is to help managers achieve business policies and objectives; Protect the safety and integrity of all assets of the enterprise and prevent the loss of assets; Ensuring the authenticity and integrity of business information and financial accounting information, in addition, ensuring the legitimacy of internal financial activities of the unit is also the goal of internal control. Although good internal control can achieve the above objectives, no matter how perfect the design and operation of internal control are, it cannot eliminate its inherent limitations, which must be understood and prevented.
The Manifestations and Causes of Enterprise Internal Control Failure
Performance of enterprise internal control failure
Judging from the cases involving accounting violations in recent years and the audit results of enterprises by relevant departments, the failure of internal control of enterprises is mainly manifested in the following aspects:
In recent years, due to the confusion of enterprise accounting work, accounting information is distorted. The phenomenon of information distortion caused by false accounts is serious, such as the conventional system of printing (ticket) supervisor, the system of keeping and using important blank vouchers and the principle of "internal containment" in the division of accounting personnel, which can not be truly implemented; The filling of accounting vouchers lacks reasonable and effective original voucher support; Artificially fabricating accounting facts; Tampering with accounting data, setting up off-balance-sheet accounts, spreading costs indiscriminately, concealing or falsely reporting income and profits, etc.
The cost is out of control and the potential loss increases. In order to invigorate the economy, some enterprises allow department managers to spend a certain proportion of business expenses, but there is no clear regulation on the scope of application of this part of expenses, and there is no binding supervision mechanism, which leads to extravagance and waste of department managers and losses to the already meager enterprises; In some enterprises, the internal control management of property and materials is weak, the purchase and sale system of materials is lax, the responsibilities of procurement, acceptance, storage, transportation and payment are not strictly separated, the issued inventory is not handled according to the prescribed procedures, and it is not checked with accounting records in time. The damage, scrapping, inventory loss, backlog and unsalable sales over the years have not been dealt with, resulting in huge potential losses in the inventory, and the imperfect review system in economic exchanges has caused a large loss of state-owned assets.
Violations of law and discipline occur from time to time. Some leaders in charge of finance, enterprise managers and accountants take advantage of loopholes in lax internal control to accept bribes, embezzle public funds, misappropriate or steal funds, or collude with unscrupulous businessmen outside the enterprise to illegally occupy enterprise funds.
Cause analysis of enterprise internal control failure
Enterprise internal control failure, mainly for the following reasons:
The internal control system of enterprises is not smooth, which is mainly manifested in the following aspects: improper accounting post setting and staffing, too complicated business, too many part-time accountants, unclear authority, and inadequate accounting pre-audit, in-process audit and post supervision; A considerable number of enterprises have not established internal audit institutions, and enterprises that have established internal audit institutions have not fully played their due roles, and internal audit work has not received due attention and support.
At present, a considerable number of enterprises do not pay enough attention to the establishment of internal control system, and the internal control system is not perfect or the relevant content is not reasonable enough. The established enterprise internal control system is more often printed on paper and hung on the wall to cope with the inspection and audit of relevant departments, regardless of the implementation of the internal control system, which emphasizes the flexibility when encountering specific problems, making the internal control system a mere formality and losing its due rigidity and seriousness.
The performance appraisal mechanism of enterprise cadres is not perfect. For a long time, the assessment of enterprise cadres' political achievements and achievements is mainly based on the completion of profit targets, and there is a lack of comprehensive investigation of other related indicators. In order to speed up the economic development of this system, some business departments have issued some unrealistic economic growth assessment indicators without scientific argumentation, while some business leaders have shown their abilities by providing false accounting information and other means to "realize" the relevant indicators issued by higher authorities.
The quality of accountants is low. In recent years, the accounting team has expanded rapidly, but the ideological education and professional training of accounting personnel have not kept up. Some training is a mere formality, which can not improve the quality of accountants at all. The outstanding performance is as follows: some people who have no professional qualifications at all and rely on human relations to get into the accounting team only rely on the will of the leaders and don't know much about laws, standards and systems, but they dare not make statements or spend money; There are also some accountants who ignore financial discipline, obey the leaders' intentions for their own interests, and even assist the leaders, practicing fraud, resulting in distortion of accounting information and financial statements.
Weak external supervision In order to strengthen supervision, China has formed an external supervision system for enterprises, including government supervision (such as supervision by finance, auditing, taxation, securities supervision and other departments) and social supervision (such as supervision by certified public accountants and public opinion). However, with such a huge supervision system, the supervision effect is not satisfactory.
Countermeasures to improve internal control of enterprises
Constructing a strict internal control system of enterprises
In the whole process of "supply, production and sales" in the front line of enterprises, we should integrate the system of mutual containment and restriction and establish a monitoring defense line with prevention as the main factor. Establish post supervision, that is, on the basis of routine accounting of the accounting department, conduct routine and periodic verification of its posts and business, and establish a monitoring defense line based on "blocking". On the basis of the existing audit, auditing and discipline inspection departments, an audit committee directly managed by the board of directors and independent of the audited department shall be established. The Audit Committee implements internal control over the accounting department by means of internal routine audit, outgoing audit, reporting and supervision and inspection of enterprise accounting statements, and establishes an effective supervision defense line based on "inspection".
The internal control system constructed at the above three levels will play a role of "preventing, blocking and checking" for the economic business and accounting departments of enterprises, and play an important role in finding problems in time and preventing and resolving the business risks and accounting risks of enterprises.
Strengthen the inspection and assessment of the implementation of the internal control system and establish an effective incentive mechanism.
In order to ensure that the enterprise's internal control system can play an effective role and be continuously improved, the enterprise must regularly check and evaluate the implementation of the internal control system, so as to know whether the enterprise's internal control system has been effectively followed, what problems have occurred in the implementation, why an internal control system cannot be implemented or not fully implemented, and estimate what consequences may or have been caused. Give moral encouragement and material rewards to those who strictly implement the internal control system; Those who violate the rules and regulations will be resolutely given administrative sanctions and economic penalties, which will be linked to the promotion and demotion of their posts. Only by combining pressure and motivation can we finally achieve the purpose of internal control.
Deepen the reform of the property right system and establish and improve the modern enterprise system.
Whether internal control can truly become the internal demand of managers is the key to whether the internal control system of enterprises will become a mere formality. To make internal control become the internal demand of enterprises, it mainly depends on two points: first, whether accounting information determines the decision-making of enterprises; The second is whether the enterprise wins the trust of the society by providing true accounting information. At present, many enterprises have not achieved these two points. On the surface, this phenomenon seems to be caused by the leaders' low understanding of financial discipline. In fact, many leaders knowingly commit crimes, and "not knowing or understanding financial discipline" is just an excuse. The deeper reason behind this is the property right system and agency problem. Therefore, only through the reform of property rights system and the establishment of modern enterprise system, enterprise leaders are closely related to the rise and fall of enterprises, and enterprise leaders will have the motivation to implement the internal control system of enterprises, and the internal control system of enterprises will really play its due role.
Strengthen the control of "people", the subject of internal control behavior, and implement internal control work.
The main actors of enterprise internal control failure, business risk and accounting risk are people (here refers to an enterprise from the leadership to the relevant business managers). Only by being consistent from top to bottom, communicating in time and mastering the thoughts, motives and behaviors of relevant personnel at any time can we do a good job in internal control. Specifically, in addition to the leadership itself should set an example, but also should do the following work:
It is necessary to know the thoughts and behaviors of enterprise accountants in time. Internal business personnel and accounting personnel must have their motives for breaking the law and discipline. Therefore, business leaders and department heads should regularly analyze the thoughts and behaviors of personnel in key positions, focus on whether they gamble, share stocks, do business, associate with social misdeeds and pursue extraordinary consumption, and grasp the external causes that may make relevant personnel commit crimes, so as to take measures to prevent and control them.
Conduct professional ethics education and business training for accounting personnel. Professional ethics education should strengthen the education of accounting personnel in terms of discipline, anti-corruption and honesty from both positive and negative aspects, enhance the self-discipline ability of accounting personnel, consciously implement various laws and regulations, abide by financial discipline, abide by the law, be honest and self-disciplined. To strengthen the continuing education of accountants, we should pay special attention to the training of basic business knowledge for those accountants with poor business ability, so as to improve their working ability and reduce technical mistakes in accounting business processing.
Strengthen external supervision and urge enterprises to constantly improve their internal control system.
Finance, taxation, auditing and other departments should rationally divide their work, establish a post responsibility system, and pay attention to strengthening information exchange between them, and exchange information regularly to form an effective supervision force.
It is necessary to strengthen the understanding, inspection and supervision of internal control of enterprises, strengthen law enforcement and enhance deterrence; The relevant departments must effectively supervise the quality of certified public accountants' practice, so that the social supervision responsibility of certified public accountants can be put in place; Encourage and support news media such as radio and television, newspapers and periodicals to expose the illegal activities of enterprises (especially listed companies) in order to give full play to the role of public opinion supervision.
Establish a good information communication system to improve the internal control effect of enterprises.
A good information and communication system can enable enterprises to grasp the operating conditions in time, provide comprehensive, timely and correct information, and communicate with relevant departments and personnel. At present, the accounting of large and medium-sized enterprises is basically divorced from the manual accounting process, and a large part of the internal control of many enterprises has been computerized, which not only saves time, improves work efficiency, but also reduces the influence of human factors on the internal control effect. In the future, we should pay special attention to the development and introduction of advanced enterprise financial and management software, and gradually establish a high-quality enterprise information communication system.
Strengthen the conscious control consciousness of enterprise leaders
The success or failure of internal control depends largely on the control consciousness and behavior of enterprise employees, among which the internal control consciousness and behavior of enterprise leaders are particularly important. From the analysis of the current situation of some enterprises in China, these enterprises are not without internal control, but have not been well implemented. Among them, it is often the enterprise leaders who take the lead in not implementing and destroying the established internal control procedures, resulting in the internal control being ineffective or just wrong. In the future, when formulating the relevant provisions of enterprise internal control, we should also clarify the responsibilities of enterprise leaders. Only in this way can enterprises meet the requirements of implementing internal control from top to bottom, thus promoting the healthy development of internal control system in Chinese enterprises.