In this Issue:
- Internal Control for Business in China
- Internal Control Review: Audit and Evaluation
- Internal Control for Day-to-Day Operations
- Using ERP Systems to Improve the Internal Control of Your Business
Experienced investors in China have invariably encountered instances of fraud. In 2016 alone, China’s fraud market was worth an estimated RMB 100 billion – about US$14.8 billion – according to government statistics.
However, while fraud is a well-known issue for foreign investors doing business in China, many companies underestimate the risks of fraud occurring from within their own organizations. Cultural differences and language barriers frequently cause misunderstandings and lapses in operational protocols, especially when senior managers are based overseas. Other times, the threats are more malicious, with opportunistic employees taking advantage of an unstructured business environment for their own gain.
The answer to limiting exposure to these risks is internal control. Internal controls are processes implemented by an organization to limit the potential for mismanagement and increase operational efficiency. These processes range from checks and balances to ensure no single employee has too much authority within a company, to establishing best practices for business activities at all levels of an organization.
In this issue of China Briefing magazine, we provide foreign investors with best practices for implementing internal controls in China. We explain what makes China’s internal control environment distinct, and why China-based operations need to prioritize internal control. We then outline how to execute an internal control review to gauge organizational resiliency and identify gaps in control points, and introduce practical internal controls for day-to-day operations. Finally, we explore why ERP systems are becoming increasingly integral to companies’ internal control regimes.
China Briefing is published by Asia Briefing, a subsidiary of Dezan Shira & Associates. We produce material for foreign investors throughout Asia, including ASEAN, India, Indonesia, Russia, the Silk Road, and Vietnam. For editorial matters please contact us here, and for a complimentary subscription to our products, please click here.
Dezan Shira & Associates is a full service practice in China, providing business intelligence, due diligence, legal, tax, IT, HR, payroll, and advisory services throughout the China and Asian region. For assistance with China business issues or investments into China, please contact us at firstname.lastname@example.org or visit us at www.dezshira.com
Dezan Shira & Associates is a pan-Asia, multi-disciplinary professional services firm, providing legal, tax and operational advisory to international corporate investors. Operational throughout China, ASEAN and India, our mission is to guide foreign companies through Asia’s complex regulatory environment and assist them with all aspects of establishing, maintaining and growing their business operations in the region. This brochure provides an overview of the services and expertise Dezan Shira & Associates can provide.
This Dezan Shira & Associates 2017 China guide provides a comprehensive background and details of all aspects of setting up and operating an American business in China, including due diligence and compliance issues, IP protection, corporate establishment options, calculating tax liabilities, as well as discussing on-going operational issues such as managing bookkeeping, accounts, banking, HR, Payroll, annual license renewals, audit, FCPA compliance and consolidation with US standards and Head Office reporting.
In this issue of China Briefing magazine, we lay out the challenges presented by China’s payroll landscape, including its peculiar Dang An and Hu Kou systems. We then explore how companies of all sizes are leveraging IT-enabled solutions to meet their HR and payroll needs, and why outsourcing payroll is the answer for certain company structures. Finally, we consider the potential for China to emerge as Asia’s premier payroll processing center.