considerable attention in the Chinese economy to recently announced Basic rules for Enterprise Internal Control (C-SOX), which enters into force in July 2009. The provisions of this Regulation will be a huge effort for many companies.
The Basic Standard Enterprise internal control was announced in the summer of 2008 by the Ministry of Finance, China Securities Regulatory Commission (cSRC), China Banking Regulatory Commission (CBRC), the National Audit Office, and the China Insurance Regulatory Commission (circ). The new regulation intends to increase the effectiveness of internal controls in listed Chinese companies, thus reducing risks for companies and their stakeholders.
companies listed in either of the two major exchanges Chinese stock (Shanghai and Shenzhen) must conduct self -evaluations internal control their report on an annual basis and hire qualified auditors to review the effectiveness of internal controls them. C-Sox are over 2000 companies in China.
Many companies have hired consultants and advisers to register, test and upgrade internal controls to prepare C-Sox followed. However, without cultural change and appropriate investments in technology that automates the documentation, assessment and remediation of internal controls, you need to allocate the same amount of capital year after year to be consistent with the C-Sox. In order to reduce the cost of long-term compliance, companies need to make the focus on internal control part of their corporate
Below are six checkpoints for how seriously the company takes the internal control :.
1) Internal control owned by management
2) The management clearly assign responsibility for the training and monitoring of internal controls
3) The assessment of control is done regularly and are well documented and are carried out by trained staff
4) Comprehensive and business eligibility criteria are used to assess the control
5) Control deficiencies are reported to management and corrected in a timely
6) Controls built new processes and procedures are implemented
This checklist was designed to encourage the organization to make a culture shift towards risk awareness and responsibility. Success against this checklist will give you a good picture of how serious the company is able to meet the challenges of C-Sox.
criterion for success in C-SOX implementation is to ensure support the entire organization. While responsibility for risk management and compliance ultimately sit with the CEO and the board, progressive companies will go to push responsibility for various parts of the organization. C-SOX projects require the participation of multiple levels of organization, and compliance projects to be successful, companies must make their staff active participant in the integrated project team. People need to prepare for compliance consultants or auditors, and the company will commit staff and resources to make effective use of external consultants.