Abstract
Commercial banks occupy an important position in China’s financial system. In recent years, with the development of economy, a series of problems arise in the process of risk management and internal control, which have a negative effect on market economy. As a result, people pay more attention to internal control, hoping to establish a better internal control system and improve the ability of commercial banks to identify and prevent risks. This paper is based on the five elements of COSO control framework, and selects the nationwide joint-stock commercial banks—Shanghai Pudong Development Bank as a research case to study. Through the in-depth analysis of the control environment, risk assessment, control activities, communication and supervision mechanism of Shanghai Pudong Development Bank, we can find the defects of internal control system and give feasible suggestions.
Highlights
With the gradual advancement of China’s financial reforms, commercial banks have gained tremendous opportunities, but they are facing the challenge of breaking the barriers to market access for the banking industry and increasing competition in the same industry
With the development of economy, a series of problems arise in the process of risk management and internal control, which have a negative effect on market economy
We should establish an internal control information monitoring database, and continuously collect and summarize internal and external information related to internal control management
Summary
With the gradual advancement of China’s financial reforms, commercial banks have gained tremendous opportunities, but they are facing the challenge of breaking the barriers to market access for the banking industry and increasing competition in the same industry. Commercial banks have shifted their focus from traditional businesses to explore and launch innovative businesses They have put forward higher requirements for commercial banks’ internal control and risk prevention and control systems. China’s commercial banks have developed rapidly, and major commercial banks are committed to the construction of internal control systems It is precisely because of the lack of a complete internal control management system and the lack of awareness and prevention of various risks will cause vicious economic cases in the banking industry frequently. This will undoubtedly cause huge financial losses to commercial banks and cause serious financial losses, threatening the safety of customers’ funds and the development of the banking industry. It is urgent and important to strengthen the internal control system of commercial banks
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