Internal control refers to a series of methods, procedures and measures adopted by a unit for self-adjustment, restraint, planning, evaluation and control in order to achieve its business objectives, protect the safety and integrity of assets, ensure the correctness and reliability of accounting information, ensure the implementation of business policies and ensure the economy, efficiency and effectiveness of business activities.
Corporate governance includes rules, relationships, systems and procedures, which are all exercised and controlled by the trust institutions within the company within this framework.
Appropriate rules include local applicable laws and internal rules of the company. Relationships include those between all relevant people, especially those owners, managers, boards of directors, management authorities, employees and the whole community. Systems and procedures must deal with some events, such as authority, work indicators, safeguard mechanism, reporting requirements and responsible authorization.
From the above definition, internal control is different from corporate governance. First of all, the elements of corporate governance and internal control are different; Secondly, the structure of corporate governance and internal control is different. Third, the focus of corporate governance and internal control is different.
Corporate governance:
Narrow sense: it refers to a kind of supervision and balance mechanism of owners (mainly shareholders) to operators, that is, through an institutional arrangement, the rights and responsibilities between owners and operators are reasonably distributed. Its goal is to maximize the interests of shareholders and prevent operators from deviating from the interests of owners.
Broadly speaking, corporate governance is not limited to the checks and balances between shareholders and operators, but also involves a wide range of stakeholders, including shareholders, employees, creditors, suppliers and governments and other collectives or individuals with interests in the company.
Corporate governance is to coordinate the interest relationship between the company and all stakeholders through a set of formal or informal, internal or external systems or mechanisms, so as to ensure the scientific and fair decision-making of the company and ultimately safeguard the interests of all parties. The goal of corporate governance is not only to maximize the interests of shareholders, but also to ensure the maximization of the interests of all stakeholders.