Problems and difficulties in internal control work

Main problems in internal control audit:

The design goal is not concentrated.

When designing the internal control system, if the enterprise ignores the goal orientation, it may lead to the problems of unfocused design objectives and unclear thinking: first, it pays attention to the specific objectives of internal control and ignores the strategic objectives of internal control system design to serve the development of the enterprise; Second, after the adjustment of strategic objectives and the change of business model, internal control procedures can't keep up with the pace of enterprise reform; Third, the internal control system focuses on detecting fraud and preventing risks, ignoring the truthfulness, reliability and integrity of financial reports and management information, which is manifested in the imbalance between process control and result control. Senior managers tolerate or even instigate accounting fraud and give up internal control in order to falsify performance, conceal profits or evade taxes.

Critical control point deviation

The design of enterprise internal control system should cover the board of directors, management and all employees at the level, involve various management activities in the object, and penetrate into all links such as decision-making, implementation, supervision and feedback in the process. The selection of key control points is the core of formulating internal control system, and grasping key control points can effectively avoid internal control vacuum. For example, a key control point in the sales collection link is that the sales staff shall not directly collect the sales money. In order to facilitate work, some enterprises allow salespeople to collect sales money directly under certain conditions. This internal control system makes it possible for criminals to intercept, misappropriate or even embezzle this money.

three

Cost-benefit imbalance

The design of internal control system needs to emphasize control efficiency and effect, reasonably weigh the relationship between cost and income, and avoid two extremes: first, the preference for cost saving, even for important business and events, high-risk business areas, is unwilling to invest necessary control costs; Second, the control efficiency is high, the designed control program is cumbersome, the management is rigid but lacks the necessary flexibility, and the implementation is difficult and inefficient. In order to master the cost-effectiveness principle, we need to remember that internal control is not complicated, but useful.

four

Reproduction without personality

Due to the differences in ownership form, organization form, industry characteristics, business model, business scale and corporate culture, enterprises also have different requirements when implementing internal control. It is understandable to learn from other people's experience. If you simply copy it, the internal control system can't fully reflect individual differences, and it can only be regarded as a facade, so it is difficult to be operational.

five

Enterprise development is difficult to adapt.

Some enterprises follow the tradition of internal control system, and once established for many years, it is difficult to adapt to the development of enterprises, which makes the internal control system unable to be improved and perfected with the changes of external environment, business adjustment and innovation and the improvement of management requirements, and makes enterprises have no countermeasures in the face of new situations and problems. Therefore, the internal control system of enterprises should also keep pace with the times.

six

Inter-departmental collaboration has decreased.

Some enterprises equate internal control with internal accounting control, and think that internal control is the responsibility of the financial department to supervise other departments, which often leads to a passive situation in which the financial department only attaches importance to internal control without the cooperation and support of other departments. The misunderstanding of senior managers, especially those who are directly responsible, the limitation of their own abilities, management preferences and other factors may weaken the synergy effect of internal control among enterprises.

seven

Control program disjointed

The internal control procedures of enterprises should be closely related to business processes, and relevant control requirements should be extended to all business chains. After the business chain changes, there should also be corresponding control programs to adapt to it, otherwise the problem of control program disconnection may occur. For example, in contract control, some enterprises only pay attention to the review and signing of the contract, but not to the implementation and change of the contract, or although they pay attention to the implementation of the contract, the tracking control procedure only involves the initially signed contract, without in-depth analysis of the reasons for the change of the contract and careful understanding of the content of the change of the contract terms, which makes the control procedure out of touch.

eight

Trust transcends supervision

The organizational structure, post setting and allocation of rights and responsibilities of enterprises should be scientific and reasonable, so as to ensure that the rights and responsibilities of different departments and posts are clear, which is conducive to mutual restriction and supervision. However, the problems of customary substitution system and trust beyond supervision are manifested in many enterprises. A few people have special power over internal control, and the departments in charge of supervision are marginalized and dare not exercise their supervisory power.

nine

System adaptation environment

The design of internal control system should be based on the working environment of enterprises. Different working environments and personnel arrangements have different requirements for internal control. Some enterprises do not have branches in overseas business outlets, and the procurement, warehousing, storage, sales and collection of overseas business outlets rely entirely on the work of the same department. With the expansion of the operation scale of outlets, the longer their independent operation time, the greater the risks faced by enterprises. In this business environment, if there is no proper internal control system arrangement, it is impossible to solve the problem only by relying on internal audit and surprise inspection.

Credulous management system

Enterprise management systems often have certain limitations. Some enterprises lack the evaluation of the effectiveness and adaptability of the system flow and internal control, the process reengineering is not thorough, the management system and control link are out of touch or even contradictory, the system update is not timely, and the internal control work relies too much on the management system, resulting in the exclusion effect of the two main lines of the system flow and control procedure, which may lead to management confusion and control procedure failure.

Problems and difficulties in internal control work

The ever-changing market intensifies the competition among enterprises, and the wide application of high technology brings new business risks. In order to survive and develop, we must strengthen management, improve efficiency and fully understand the importance of internal control. Many units have made unremitting efforts to establish and improve the internal control system as an important task. However, due to various reasons, many enterprises in China still have no internal control system, resulting in distortion of accounting information and confusion of financial revenue and expenditure management. At present, there are still some problems in the internal control of Chinese enterprises:

1. The management concept is not in place and there is no sense of urgency.

For a long time, due to the influence of planned economy and traditional management ideas, methods and means, some enterprises in China have not paid enough attention to accounting work, the basic accounting work is weak, the implementation of national unified accounting system is not in place, the person in charge of the unit has intervened in accounting work administratively, and internal accounting supervision has become a mere formality. Most enterprise managers don't know enough about internal control theory, lack knowledge and still have a gap in understanding. In addition, many enterprises do not pay enough attention to the establishment and implementation of internal control. Even if some relevant systems are formulated, they are basically departmental systems of accounting management or financial management, even divorced from business, which is far from specific implementation.

2. The corporate governance structure is not standardized.

The establishment and effective operation of internal control system depends on a good internal corporate governance structure. The separation of ownership and management rights of modern enterprises has expanded the management scope, increased the management level and decomposed the management functions, which objectively requires standardizing the corporate governance structure, strengthening internal control and protecting the legitimate rights and interests of owners and creditors. However, in recent years, after the reform of state-owned enterprises, although the corporate governance structure has been formally established, it is far from achieving the effect of internal rights checks and balances. Many companies have a chairman and general manager; In some state-owned enterprises, the members of the board of directors are all managers, so it is difficult for the board of directors to play the role of supervising managers. The operation of financial accounting information system is directly led by enterprise managers, and financial supervision is overhead. The corporate governance structure of mutual checks and balances cannot be established, and the internal control system cannot operate effectively, so the phenomenon of "officials give figures and figures give officials" is inevitable. Accounting information distortion, arbitrariness and corruption hinder the development of enterprises and affect the economic order, which is one of the important reasons for false figures and false statements.

3. The external regulatory environment is not in place.

Internal control focuses on execution. Although the internal control system of some units is relatively perfect, the external supervision environment is not in place and the internal control has not been well implemented, so that many enterprises have made accounting fraud. If all functional departments of some units have set up bank accounts and small treasuries, the fund management is seriously out of control; Some units even have the phenomenon that the responsible person absconded with huge amounts of public funds. The loss of external supervision has become a hotbed of corruption, and moths occur in administrative organs and financial systems almost every year, resulting in a large loss of state-owned assets, and the interests of the country and the people cannot be guaranteed.

1. Establish the concept of "people-oriented" and constantly promote the innovation of internal control system.

The orientation of internal control of enterprises in China has always been from the perspective of basic audit. From the perspective of perfecting corporate governance and improving the status quo of state-owned enterprises, internal control needs to be repositioned, and it cannot be repaired only in some aspects. Any standardized system should not only consider the limitations of current conditions, but also have some long-term development vision. Taking the formulation of relevant internal control norms as an important measure to improve corporate governance and state-owned enterprises, the positioning of internal control is determined on the basis of the original definition of internal control, and revised according to the current conditions, so as to meet the requirements of international norms on the basis of conforming to China's national conditions.

2. Standardize the corporate governance structure.

From the owner's point of view, enterprises should not only bring the process of top managers exercising their rights into the monitoring scope of internal control, but also take it as the key monitoring object of internal control. It is necessary to clarify the responsibilities of the shareholders' meeting, the board of directors, the board of supervisors and the managers, so that the decision-making system, the management system and the supervision system can perform their respective duties, operate in a coordinated manner, and effectively check and balance. Improve the internal management supervision mechanism of enterprises, emphasize the supervisory role of the board of directors, managers and corporate finance, and make the establishment, operation and management of accounting institutions more suitable for the requirements of modern enterprise system. Standardized corporate governance structure helps to overcome the opportunism of management and provide a better external control environment for internal supervision of enterprises.

3. Strengthen external supervision.

At present, accounting fraud in state-owned enterprises has been repeatedly banned, in the final analysis, because there is a huge demand for accounting fraud. Although fraud is risky, the benefits brought by accounting fraud may be magnified by geometric series. Compared with the illegal cost after fraud is investigated, the former is irresistible. The comparison between "opportunity income" and "disclosure cost" is the key for counterfeiters to decide whether to take risks. As far as the actual situation is concerned, it is extremely difficult to "compress" the "opportunity income" of financial fraud, and increasing the "leakage cost" is a very realistic means of containment. In order to reverse the distortion of accounting information, it is imperative to strengthen external supervision, increase judicial intervention and punishment, force relevant personnel to enhance their sense of responsibility, put pressure on enterprises, and turn this pressure into a driving force to urge enterprises to implement internal control.

Problems and difficulties in internal control work

At present, the main problems existing in the internal control of administrative institutions are:

1. Lack of effective cost control.

Administrative institutions generally lack strict administrative cost control standards, especially hospitality, office expenses, conference fees, utilities and so on. Even if the internal expenditure standard is established, the system of reimbursement is still adopted.

2. Weak control of fixed assets

After the implementation of centralized government procurement system, the purchase of fixed assets in administrative institutions has been effectively controlled, but the use management still lacks relevant internal control, and the phenomenon of emphasizing purchase over management is more common. If the regular property inspection system is not established according to the regulations, the purchased fixed assets are not registered in time, the subsidiary ledger of fixed assets and physical cards are not registered, and the responsibilities are not clear, which leads to the inconsistency of assets accounts and asset losses.

3. Weakening of financial management

The work of the financial department is limited to bookkeeping, accounting and reimbursement, which is out of touch with business control. Do not understand the decision-making, implementation process and results of major issues in this unit, and fail to implement necessary financial control and supervision over business departments. Bill management is not in place. No regular or irregular spot check system has been established, and there are problems of deferred payment of income and misappropriation of public funds; Failure to submit and write off the used bills in time will easily lead to problems such as income not being recorded and "small treasury" being set up privately.

4. The post setting is not reasonable enough

Due to various reasons, the post arrangement of some units is not reasonable, and there is a phenomenon that one person has more posts and incompatible posts work part-time. Bookkeepers, custodians, economic and business decision-makers and managers are not well separated and restricted, and there are phenomena such as cashier and recheck, procurement and custody, and there are management loopholes.

5. Weak budget control

First of all, the budget preparation is relatively rough. Department budget preparation is generally based on the financial situation of the year, the income and expenditure of the previous year, the characteristics and business of the budget unit itself, and it is not detailed to specific projects, so the budget expenditure can not meet the requirements of verification one by one. Secondly, the budget is not rigid enough, the planning and scientificity of the budget are not strong, the budget is adjusted and added frequently, and the use of funds is unpredictable, which weakens the constraint and control of the budget.