Analyze the five elements of internal control in combination with an industry

1. Internal environment. The internal environment is the basis for the implementation of internal control by an enterprise, which generally includes the governance structure, organizational setup and allocation of rights and responsibilities, internal audit, human resources policy, corporate culture, etc.

2. Risk assessment. Risk assessment is to identify and systematically analyze the risks related to the achievement of internal control objectives in business activities in a timely manner, and reasonably determine the risk response strategy.

3. Control activities. Control activities are based on the risk assessment results, the enterprise adopts corresponding control measures to control the risk within the tolerance level.

4. Information and communication. Information and communication is the timely and accurate collection and transmission of information related to internal control by enterprises to ensure that information is effectively communicated within the enterprise and between the enterprise and the outside.

5. Internal supervision. Internal supervision refers to the supervision and inspection of the establishment and implementation of internal control, the evaluation of the effectiveness of internal control, and the discovery of internal control defects, which should be improved in a timely manner.

6. Internal control is a general term for a series of methods, means and measures taken by a unit to self-adjust, restrict, plan, evaluate and control within the unit 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.

1. Internal environment: The internal environment is the general term for various internal factors that affect and restrict the establishment and implementation of the internal control of the enterprise, and is the basis for the implementation of internal control. The internal environment mainly includes governance structure, organizational structure and distribution of rights and responsibilities, corporate culture, human resources policy, internal audit organization setting, anti-fraud mechanism, etc.

2. Risk assessment: Risk assessment is the process of timely identifying, scientifically analyzing and evaluating various incorrect factors that affect the realization of the internal control objectives of the enterprise and adopting countermeasures, which is an important part of the implementation of internal control. Risk assessment mainly includes goal setting, risk identification, risk analysis and risk response.

3. Control activities: Control activities are the methods and means to ensure that the internal control objectives of the enterprise can be achieved according to the results of risk assessment and combined with risk response strategies, and are the specific ways to implement internal control. The control activities are formulated in combination with the characteristics and requirements of the specific business and matters of the enterprise.

4. Information and communication: Information and communication is a timely, accurate and complete collection of various information related to the operation and management of the enterprise, and the process of timely transmission, effective communication and correct application of this information between the relevant levels of the enterprise in an appropriate way, which is an important condition for the implementation of internal control. Information and communication mainly include information collection mechanisms and communication mechanisms within and outside the enterprise.