Cases of internal accounting control in small and medium-sized enterprises

A shopping mall/KLOC-opened in October/September * *, and achieved sales of 90 million in just seven months. After one year, the annual sales reached 1.86 million yuan, and the tax profit was 13 1.500 yuan, and it entered the ranks of 50 large shopping malls in China within one year. Until the fourth year, its sales have been increasing, reaching 480 million yuan in the fifth year. Chain companies have been set up in various places. But after eight years of opening, the mall quietly closed! There are many reasons for the collapse of the group, but the extremely weak internal control is one of the main reasons.

Systematic analysis of internal control failure in "shopping malls"

1. Control environment failed.

Control environment refers to various factors that affect the establishment, strengthening or weakening of specific policies, procedures and their efficiency, including important meetings of enterprises, conduct, morality, values, quality and ability of enterprise managers, management philosophy and management concept of managers, enterprise culture, various rules and regulations of enterprises, information communication system, etc. Enterprise control environment determines whether other control elements can play a role, is the basis for other elements of internal control to play a role, directly affects the implementation and implementation of internal control and the realization of internal control objectives, and is the core of internal control. So, what is the internal control environment of the group?

(1) Operator's behavior, morality and values

The Group has no investment, and the legal representative is Wang xx himself. The group company will make a decision to entrust the operator to manage and operate the group joint-stock company; It is clearly stipulated in the minutes of the meeting of the board of directors of the group that "the board of directors agrees that the operators of the company shall withdraw the management fee according to the proportion of sales 1%. Thus, the operation mode of the group entrusted by the operator has been formed, which is different from the group with a set of people, two brands and headquarters. Since then, the general manager has implemented the management of the group and shopping malls remotely in other places. Wang xx is not only the legal representative of the operator here, but also the general manager of the group, and can allocate personnel and funds at will. As a result of this institutional arrangement, the reputation and personnel of the group are used by operators, and the operating profits of the group are occupied by operators, all of which are free of charge.

For another example, the mall borrowed 20 million yuan, but xx shareholders asked 6 million yuan to go to Chengdu to do real estate business for a friend of theirs. As a result, they lost all their money and paid off their debts with two buildings. Before the debt repayment procedure was completed, Gao xx said to the debtor, don't pay off the debts to the shopping mall. You give me two buildings and I will go to the shopping mall to pay back the money. In the end, the mall got nothing.

The above facts are only a very small part of the exposure of the group, but they can already explain the conduct and integrity of the group operators.

(2) Board of Directors

An important element of the internal control environment of enterprises is the board of directors. It is believed that enterprises should establish a strong board of directors, and the board of directors should play a real role in supervising and guiding the business decisions of enterprises. Within the group company, the board of directors has been paralyzed. It was not finalized until two years after the registration date of the group company. In the past two years, the decision-making level of the group company has been in a state of constant evolution and has not been standardized according to the articles of association. The board of directors never calls directors to vote on major decisions, and all things are decided by the general manager Wang xx alone. At the beginning of 1995, the chairman of Zhongyuan real estate, the major shareholder of the group, changed hands, and the new senior official thought that the equity transfer approved by his predecessor caused the loss of the company's assets, and refused to admit it, saying that he would not participate in the board of directors until the equity dispute was resolved. Since then, the group's top decision-making bodies and supervisory bodies have been paralyzed. For example, the naming right is displayed in intangible assets, and its transfer must be discussed and approved by the board of directors. But in fact, Wang xx has the final say. As long as he signs the agreement, others can build a chain company of shopping malls. In this group, the general manager is king and the board of directors is like a dummy.

(3) personnel policy and staff quality

People are the most important resource of an enterprise and an important internal control environment factor. Then, what about the personnel policy and staff quality of Zhengya Group?

1. Judge a book by its cover. 199* At the end of the year, large shopping malls in Guangzhou, Shanghai and Beijing opened one after another, and the management staff was seriously inadequate. The organization has recruited hundreds of young people from Xi 'an. After short-term training, they will be sent to three places. Because I don't know my personal situation, it depends on my name and appearance. I was sent to Guangzhou, Shanghai or Beijing as a manager or director. I have good facial features and speak clearly. Others are salespeople.

2. Use people at will. Zhou xx, the announcer of the Art Troupe of Shopping Mall, was appointed as the general manager of a chain shopping mall.

3. cronyism. The cousin of a shopping mall leader, a former farmer in the suburbs of Zhengzhou, was appointed as the general manager of a large shopping mall in Beijing; Two wives and brothers of a leader, Shandong farmers, have also been entrusted with important tasks; Even his nanny was appointed as the financial director of the group distribution center.

(4) enterprise property rights and organizational structure. The mall is a joint-stock enterprise jointly funded by * * Provincial Construction Bank Leasing Company and * * Real Estate Company, in which the leasing company is RMB 6,543.8+0.02 million, accounting for 565.438+0% of the shares, and Zhongyuan Real Estate Company is RMB 980,000, accounting for 49% of the shares. As the mall plans to be reorganized into a joint stock company, it will issue shares to the public. According to relevant regulations, a listed company must have more than five shareholders to be eligible for listing. Due to various reasons, the restructured joint stock limited company failed to go public. However, some virtual equity transfers have been recognized by government functional departments, that is, 565,438+0% of the original equity of Jianxin Leasing Company was transferred to 65,438+08% of the industrial development company and 65,438+00% of the real estate company; Transfer 49% equity of the original * * real estate company to * * enterprise development company 18% and to * * trust and investment company 18%. Because the transferee failed to pay the share purchase price in time as agreed, it buried a huge financial hidden danger. Especially later, the new chairman of * * real estate company thought that the equity transfer approved by his predecessor caused the loss of the company's assets and refused to admit it. The chaotic situation of group property rights relations is thus formed.

The group has a "goods distribution center", whose function is to distribute goods for stores and four direct chain stores. The center is responsible for ordering directly from the manufacturers, with the purpose of reducing the procurement cost and preventing the shopping malls from taking kickbacks when purchasing on their own. However, the price of all the goods delivered by the center to major shopping malls is not only far higher than the wholesale price in the wholesale market, but even higher than the retail price in the free market! The "goods distribution center" has actually become a big black hole.

The above four aspects clearly illustrate the control environment of the group. If its internal control environment is like this, its final outcome is also expected.

2. Risk awareness is not strong

Environmental control and risk assessment are the keys to improve the efficiency and effect of enterprise internal control. How does the Group conduct environmental control and risk assessment? Wang xx, the former general manager of the group, summed up six lessons from past business mistakes, four of which involved understanding and grasping risks.

The first is "insufficient understanding of the market and insufficient understanding of the situation". In the process of our progress, not only did we encounter the pressure from our domestic business counterparts, but the massive entry of foreign retail industry also caused us a great impact, which led us to think that the more advanced business model was washed to pieces at once.

The second is "overconfidence, optimism and taking it for granted, and the result is that the arrogant will fall."

The third is "in the face of the dilemma of the retail industry, our adaptability is poor, and the whole operation has entered a dead end, and finally it has reached the end of its tether."

The fourth is that "the ability to resist risks is poor, and things will be chaotic when they are chaotic." These lessons show that there is a lack of risk concept and risk management mechanism in the thinking of group management, so the ability to resist risks is extremely low.

3. Lack of proper control activities

Control activities are policies and procedures to ensure the implementation of management instructions, aiming at helping enterprises to ensure that necessary actions are taken against "risks that make enterprise goals impossible to achieve". There are almost no control activities in the operation of the group, or even if there are so-called policies and procedures, they exist in name only and have no practical effect. And look at a set of data: the annual celebration cost of the group exceeds 700,000 yuan; A shareholder of the group borrowed 8 million yuan from the shopping mall, and there was no debit note. Later, 3 million yuan was returned, and the book and receipt of the remaining 50,000 yuan mall showed "project payment"; Another shareholder of the group borrowed 570,000 yuan from the mall on 1993, and no one urged him to keep an eye on it 1997. The management cost of the mall is as high as 186 billion yuan. If the control activities of the group are all like this, how can we ensure that the instructions of the management can be realized?

4. Poor communication of information

A good information and communication system helps to improve the efficiency and effectiveness of internal control. Enterprises must identify, obtain and convey appropriate information in a certain form within a certain period of time, so that employees can perform their duties smoothly. Within the group, the information communication system hardly exists. It is said that the group does not need cost information, does not calculate the payback period and rate of return, and does not collect market information. The accounting information system was arbitrarily controlled by the management, and a large amount of funds were misappropriated, but they did not know where to go. In this group, information system is no longer a tool for management and control, but a microphone for top managers, and information changes with their wishes.

5. Lack of internal supervision

Enterprise internal control is a process, which is realized through a large number of systems and activities in the process of human management. In order to ensure that the internal control system is effectively implemented and the implementation effect is good, and that the internal control can adapt to the new situation at any time, it is necessary to supervise the internal control. This mall, since its opening, has not had a comprehensive and thorough audit. Occasionally, local internal audits found that millions of yuan of funds were transferred out, and then they went away. The general manager has the final say on everything. Of course, subordinates including internal auditors have no right to speak. It can be seen that the extreme lack of internal supervision is a fait accompli

Enlightenment: Perfecting Enterprise Internal Control

In the group, there are problems with the five elements of internal control, which will inevitably lead to bankruptcy. Although it is only a case of China enterprises, this phenomenon is quite common. At present, China's accession to the WTO is just around the corner, and the fierce competition from the outside world, especially multinational companies, has brought more and more pressure and faced more and more severe challenges to China enterprises. If we deal with competition in this situation, the result is not difficult to predict. Therefore, how to improve their own competitiveness and how to participate in the trend of world competition in a more positive state will be the main problems and difficulties faced by China enterprises. The economic reality urgently requires China enterprises to establish and improve internal control as soon as possible, so as to improve the efficiency and effect of internal control. In reality, the operating efficiency of enterprises in China is generally poor; Accounting fraud is serious and financial reports are seriously distorted; The violation of laws and regulations by enterprises is becoming more and more serious and has become a common phenomenon. There are many reasons for these phenomena, but the lack and defects of internal control are hard to escape. The problem is that many enterprises in our country have not realized the importance of internal control, and there are still many misunderstandings about internal control, thinking that internal control is just ten piles of manuals, documents and systems, or that internal control is internal cost control and internal asset safety control. There is even no concept of internal control at all.

We believe that the improvement of internal control of enterprises in China can be achieved from two aspects: first, the establishment of a standardized internal control system by authoritative departments; The second is to make mandatory arrangements for internal control audit of enterprises, so as to have both.

1. Establish internal control standard system.

First of all, it is an international practice to establish an internal control standard system. For a long time, internal control has always been regarded as the internal affairs of enterprises and belongs to the responsibility of enterprise management authorities. Throughout the process of definition, explanation, modification and re-modification of internal control by American Institute of Certified Public Accountants (AICPA) for many years, it is not difficult to find that MCPA has always believed that the objectives of internal control are to protect enterprise assets, check the accuracy of accounting information, improve operating efficiency, and promote enterprises to implement established management policies. No matter how these goals are arranged and combined, serving the internal management and operation of the enterprise is its constant feature. In the past, the research on internal control mostly focused on system design and audit, focusing on improving the methods of internal control and improving the quality and efficiency of audit. Until 1973, the US Congress passed the Foreign Corrupt Practices Act (FCPA), which stipulated that every enterprise should establish an internal control system to prevent this kind of behavior. According to the accounting standards provisions of the bill, if an enterprise fails to meet the internal control objectives proposed by the American Auditing Standards Board, it may be fined $6,543.8+0 million, and the responsible person may be sentenced to imprisonment for less than five years. At this point, establishing and strengthening internal control has become the legal responsibility that enterprises should fulfill. 199 1 year 1 1 month, the "Judgment Guide" issued by the Federal Council of the United States pointed out that if even one employee of the company is found guilty, the company will be subject to compulsory fines, and the amount of fines can be as high as hundreds of thousands to millions of dollars. The promulgation of this regulation has strengthened managers' attention to compliance with regulations, and compliance with appropriate regulations and avoidance of possible fines have also become an important part of enterprise internal control. 1992, a special committee composed of AICPA, AICPA, AICPA, American Accounting Association (AAA) and COSO Committee put forward the Announcement on the Comprehensive Framework of Internal Control, arguing that "internal control is subject to the board of directors, management authorities and other staff. The process aimed at achieving (1) operational effectiveness and efficiency (2) reliability of financial reports (3) compliance with appropriate laws, regulations and other objectives and providing reasonable guarantees. " The internal control is expanded and five elements of internal control are put forward. The American Institute of Certified Public Accountants believes that the report is of epoch-making significance. "Its role is like the early GAAP, and its future position in the management field is the same as today's GAAP." COSO report has been widely recognized, and countries and professional organizations all over the world have followed the COSO report to re-study internal control, adopted the latest concept of COSO report and issued their own announcements. It can be seen that the establishment of a standardized internal control system has become an international practice.

Secondly, the establishment of internal control standard system is an important condition to ensure the reliability of financial reports and the compliance of enterprises with laws and regulations. The typical feature of modern enterprises is the separation of ownership and management rights. Due to the decentralization of equity, business owners (including equity owners, creditor owners and human capital owners, etc. ) and other interested parties can generally only understand the operation and management of the enterprise through financial reports and other information issued by the enterprise. There is a serious information asymmetry among operators who are outsiders, such as owners, government departments and material suppliers. Therefore, one of the objectives of internal control is to ensure the reliability of financial reports, and the other is to ensure compliance with company laws and regulations. From these two objectives, we can see that strengthening the internal control of enterprises is not only a voluntary and conscious behavior of enterprises, but also a responsibility and obligation of enterprises, which is the embodiment of enterprises' responsibility to external interest groups. Therefore, it is an important condition to establish a complete internal control standard system as the standard of enterprise management behavior.

Finally, the establishment of internal control standard system is conducive to unifying views and updating ideas. At present, the understanding of internal control of enterprises in China's accounting theory and practice circles is still at the stage of internal containment system, internal control system or internal control structure, and the understanding is still not unified, and there are even many misunderstandings. Moreover, different industries and departments, such as business, justice and accounting, have different understandings of internal control and lack the same "language" when communicating with each other. Even in the CPA profession, the understanding of internal control is mostly limited to its impact on audit work. Therefore, the establishment of internal control standard system can not only provide a unified basis for all parties to communicate and understand, but also provide standards and methods for enterprises to evaluate and improve internal control. Based on the above understanding, we suggest that relevant departments organize forces to strengthen the research on internal control in time. China's legislature should make a comprehensive and in-depth study of internal control of enterprises on the basis of COSO report with the strength of all relevant departments in the United Nations, including theoretical circles, practical circles, professional groups, associations and intermediaries, establish a set of internal control standard system with unified connotation and strong operability like COSO report, and issue or put forward guidelines, so that enterprise management authorities or certified public accountants can have evidence to follow and rules to follow. Moreover, the brand-new concept and spirit of internal control should be conveyed to all relevant personnel, and the standards used by management authorities to evaluate internal control, certified public accountants to audit internal control and investors to review internal control should be unified as much as possible to reduce the possible expectation gap.

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