Demand of Management Control in Chinese Enterprises

Abstract

Both management control theory and its practice are driven by the demand of management control. However, the development of internal control shows that external stakeholders’ demand dominates the improvement of internal control inside enterprises. This is also the same in China that the external regulators such as Ministry of Finance, Securities and Regulatory Committee, State-owned Assets Supervision and Administration Commission are in charge of the Internal Control Standards Committee and the formulation of Guidance on Internal Control for Enterprises. The external demand of internal control which is also known as “required to control” fits in the mission of regulation.

Appendix

Survey questions designed of Management control demand of listed companies’ investor

• Question 1. Management Control System is an important part of listed company operating mechanism.

• Question 2. Effective management control of listed companies can reduce the risk of fraud on investors.

• Question 3. Effective management control of listed companies can improve operating efficiency and improve company performance.

• Question 4. The merits of the company’s management control will not affect your investment decisions.

• Question 5. Lack of management control of listed companies will not affect the survival and development.

• Question 6. When investing, most want to invest in companies with high operating efficiency.

• Question 7. To ensure safety of the assets, provide true and reliable accounting information is the main objective of management control.

• Question 8. Management control goal is not just a simple troubleshooting, but should focus on improving operating efficiencies.

• Question 9. Management control objectives should be consistent with the company’s strategic goals.

• Question 10. Management control is a defensive mechanism; just to prevent damage occurred.

• Question 11. Management control mode is not affected by certain internal and external factors which produce a variety of modes.

• Question 12. One management control mode for the vast majority of the company exists.

• Question 13. Management control’s mode should be depending on the type of the company’s strategy and the company’s specific circumstances.

• Question 14. If not based on company’s strategy to design, management control is also able to play a role in normal.

• Question 15 management control designed according to the Company’s accounting business can be a good play.

• Question 16. The core of the management control is related to the corporate strategy.

• Question 17. Management control design process needs to focus on accounting factors (assets, liabilities, costs, etc.).

• Question 18. Management control can used formal control (regulation), can also used informal control (corporate culture, values).

• Question 19. Accounting work and accounting work is the most important quality control management control methods.

• Question 20. Compared with other means of control, internal auditing should receive special attention in management control.

• Question 21. As long to complete management control objectives, the specific control methods adopted, the use of several control methods are not important.

• Question 22. The main control method depends on the company’s strategy and their own characteristics.