On the Importance of Enterprise Internal Control in Financial Management

The Importance of Enterprise Internal Control in Financial Management

1, the construction of internal control system is a legal requirement that enterprises must abide by.

Article 27 of China's Accounting Law, which was implemented in 2000, clearly requires that "all units should establish and improve their own internal accounting supervision system". Specific requirements: The responsibilities and authorities of the approving personnel, the handling personnel, the property keeping personnel and the recording personnel of economic and business matters should be clear, separated and restricted from each other.

In view of the frequent hot spots of economic fraud in Chinese enterprises and the weak internal control of small and medium-sized enterprises, the Ministry of Finance has promulgated seven internal accounting control norms in recent years to urge enterprises to establish effective internal control systems.

2. The construction of internal control system is an inevitable requirement for deepening the internal management of enterprises.

In recent years, with rich professional knowledge and practical experience, the Group has achieved sustained growth in the scale and quality of assets, cross-regional development projects in Nanjing, Nantong and Wuhu, and diversified properties such as real estate, hotels and shopping malls have flourished. In the process of development, enterprises have accumulated many good internal control systems. At present, they need to be supplemented and improved according to the current situation, form a unified and complete system, and generally form a system of checks and balances between business departments and business links within the enterprise, which will undoubtedly promote enterprise management to a new level and promote the rationalization and standardization of enterprise business processes.

3, the concept of internal control

Internal control can be defined as a process, which is influenced by the board of directors, management and other personnel of the enterprise. This process aims to achieve the following objectives and provide reasonable protection: ① to protect the safe, complete and effective use of enterprise assets. ② Ensure the reliable and timely provision of accounting information and management information. ③ Ensure the implementation of various management policies, systems and measures formulated by the enterprise. ④ Try to control and reduce unnecessary costs and expenses, and achieve greater profit targets for enterprises. ⑤ Prevent and control all kinds of mistakes and abuses, and formulate and take corrective measures in time. ⑥ Ensure that all production and business activities of the enterprise are carried out in an orderly and effective manner.

In order to achieve the purpose of internal control, standards for measuring actual performance should be established in advance; Correctly record the implementation of economic business, compare work performance with standard objectives, find differences, analyze the reasons for differences and the influence of various factors on differences; In view of the deviation from the objectives and standards, put forward corrective measures to remedy.

4. Suggestions on strengthening internal control.

4. 1 Establish a good control environment

Internal control mainly includes environmental control, business control, risk assessment system control, internal supervision and audit control. Among these controls, environmental control is the basis that affects other components of internal control. The interior of any enterprise exists in a certain environment, which is an atmosphere, shaping the corporate culture and affecting the control consciousness of employees and the consciousness of implementing control. The quality of the control environment directly affects the compliance and implementation of the internal control of the enterprise and the realization of the overall strategy and tactics of the enterprise. To establish a good internal control environment, we should pay attention to the construction of internal control environment in enterprises, including management concept, mode and style, organization, methods of authorizing and distributing responsibilities, management control methods, human resources policies, etc. , so as to ensure the real implementation of the system and truly achieve the purpose of internal control.

4.2 Strengthen the internal containment system in all aspects of the enterprise.

Internal containment means that when a specific business is divided, the whole process of the business cannot be completed by one department or one person, but other departments or personnel must participate, and the departments connected with it can automatically check the correctness of the previous work. It includes proper authorization, division of responsibilities for incompatible work, vouchers and records, access control and independent inspection. This kind of restriction includes the mutual restriction between superiors and subordinates and the mutual restriction between relevant departments. For example, in the process of collecting and classifying accounting information, in addition to the preparation of documents, there must be audit and approval by the accounting supervisor; Another example is the cash flow business, such as the examination and approval of cash receipts and payments, keeping seals, bookkeeping, etc., which should be managed by division of labor and contained with each other.

4.3 Strengthen the internal audit system of enterprises

Strengthen the assessment, supervision and restraint mechanism, give full play to the role of internal audit of enterprises, truly play the role of internal auditors, supervise and protect the safety of enterprise assets and property, and supervise the rational and legal development of enterprises.

In the second half of this year, the Group began to conduct internal audits of its subsidiaries and branches, focusing on the construction and implementation effect of its internal control system, and exchanged relevant opinions with the management and financial departments, which achieved good results. [Page]

4.4 Strengthen the implementation and enforcement of the internal control system

Every enterprise has its own series of control measures, methods and procedures, but the specific implementation process will be more or less affected by some factors, such as business philosophy, organizational structure, the quality and conduct of managers, information systems, human resources policies and so on. , and can not be completely effectively controlled. Our company used to have long-term business dealings with a company, with frequent accounts receivable. However, due to the negligence of the specific manager in tracking the collection link, the sudden delay in payment was not found in time. After we passively learned from a third party that the company had started to move and evacuate, the relevant departments of our company immediately took measures to let the company use part of its property as collateral. Although the emergency measures made up part of it, the enterprise still lost money. In fact, this kind of thing can be effectively prevented. As long as the handling personnel strictly follow the current account management measures, regularly collect and report, the relevant departments strictly control the aging of accounts receivable, and promptly clean up and remind abnormal accounts receivable, this kind of thing will not happen, at least the loss can be smaller. This case reminds us once again that we must strengthen the internal control of enterprises, change our concepts, get out of misunderstandings, strengthen supervision, supervise implementation, establish standards and improve mechanisms in order to achieve the goal of internal control of enterprises.