There are many factors that affect the development of enterprises. After 1950s, people's analysis and understanding of the causes of enterprise failure began to be consistent: the main source of enterprise failure lies in internal management risks rather than external risks. Therefore, to realize the sustainable development of enterprises, only internal risks can be controlled. At present, enterprises in China are facing severe financial risk challenges. How to prevent and resolve financial risks and establish a sound real-time and effective internal control system is the key. Due to the potential and harmfulness of financial risks, preventing and controlling financial risks has become an important part of various business organizations. As an important means to prevent financial risks, internal control has been increasingly studied and valued. Based on the present situation of enterprise internal control, this paper analyzes the problems existing in the internal control system for preventing enterprise financial risks, and puts forward corresponding improvement suggestions. In my opinion, to strengthen the prevention of financial risks of enterprises in China, we must first improve the internal control system of enterprises in China.
Based on the analysis of the "CAO" incident, this paper introduces the present situation of various internal control systems in Chinese enterprises, their influence on financial risks, and the importance of internal control in preventing financial risks. Based on how to improve the construction of enterprise internal control system framework, this paper puts forward some corresponding suggestions for the relevant financial risks in reality.
Keywords: internal control; Financial risk; risk prevention