SMEs in high-risk industry, the internal control of security costs

[Abstract] high-risk industries and enterprises in accordance with national and local governments to set aside the security costs with specialized purposes, are of special funds should strengthen internal controls. Paper discusses the cost of high-risk industry, small and medium security provision and use of the internal control system and the optimization of the internal control environment and other issues, security costs for the high-risk industry, the scientific management of small and medium enterprises for reference.

[Key Words] high-risk industries; SMEs; security costs; internal control

May 2004 to December 2006, the state has promulgated regulations to require coal companies, fireworks manufacturers and other high-risk industries and enterprises in provision for security costs; some provinces and cities have introduced local laws and regulations also require construction, non-coal mines, chemical extraction of high-risk industry standard security costs. enterprises in accordance with state and local governments to set aside the security costs, with a specific purpose, belonging to a special fund should be based on their characteristics and management requirements to develop the appropriate system and strengthen Financial Management.

Internal control refers to the units in order to improve the quality of accounting information, protection of assets of the security, integrity, and ensure that the relevant laws, regulations and rules and regulations such as the implementation of the Development and implementation of a series of control methods, measures and programs. SMEs in high-risk industries because most lack of funds, only reasonable and effective control of security costs, in order both to ensure safety in production enterprises, but also improve economic efficiency of enterprises, therefore, an urgent need for SMEs in high-risk industries to establish and improve internal control mechanisms to strengthen the management of security costs.


First, the strict control of the provision and use of security costs

(A) provision for security costs required
Currently, the safety standards for extracting costs differ according to the industry. If the standard for the extraction of coal mining enterprises: large and medium sized not less than 3-8 million tons of coal mines, small mines not less than 6-10 million tons of coal. Dangerous Goods Production enterprises to provision for the year based on actual sales, to take over the regressive approach extracted from month to month according to the following criteria: the year's actual sales revenue in 1000 million and below, in accordance with 4% extract; year's actual sales revenue in 1000 million to 10 000 million (inclusive), in accordance with the 2% of the extract; year's actual sales revenue in the 10 000 million to 100 000 million (inclusive), in accordance with the extraction of 0.5%; year's actual sales income 100 000 million or more parts, in accordance with the extraction of 0.2%. provincial security costs of extraction of high-risk industry, mostly based on sales revenue, accounted for 0.5% -4% range.

Security costs in the extraction, once the standard to determine extraction, high-risk industry, small and medium enterprises shall be subject to state or local government are strictly enforced, are not free to reduce the extraction ratio.

(B) the cost of the required use of safe use
Security costs are special funds, state and local governments clearly defined the scope of the use of special funds, high-risk industry, SMEs must be in accordance with the provisions of the proper use of security costs, security costs and draw the other boundaries of monetary funds to meet the enterprise security investment the need to ensure that the level of safety in production enterprises.

According to regulations, the security costs of coal mining enterprises are mainly used for mine ventilation, water and gas testing facilities and equipment expenditures, the safety of fireworks production costs of enterprises are mainly used for explosion-proof electrical equipment, machinery and equipment and improve facilities and safety risk source monitoring expenses. provincial security costs under the specific use of different, such as Shaanxi Province, the specific use of security costs are: enterprise security facilities and safety measures in funding for technology, major hazards, major accident hazard assessment, rectification, monitoring; and security costs in Guangdong Province using the range is more extensive, including "safety training of employees, education costs, costs of employees with labor protection products, safety facilities, equipment investment and maintenance costs, major hazards, major accident hazard assessment, rectification, monitoring and other expenses, emergency rescue equipment, equipment investment and maintenance costs, and emergency rescue drills. "

Second, the establishment of cost effective security system of internal control the use of funds

(A) the establishment of accounting system security costs
SMEs in high-risk industries from the current actual position, with all security-related costs and no separate accounting and management, but included in the various departments or the corresponding cost process, such as production costs, management fees and so on. If cost accounting system to establish security, safety and accident losses into account, analysis, to the system to effectively collect all kinds of safety input and output data for evaluation of safety engineering and safety measures of the economy, provide a scientific basis for rational, and thus make security decision-making more scientific, reasonable and effective to prevent wrong decisions. Meanwhile, the security cost accounting system, the establishment of SMEs in high-risk industries can expand the idea of ​​controlling costs, which can be sought in the broader area of ​​ways to control costs, develop more effective cost control measures to control security costs by increasing economic efficiency of enterprises.

Security costs accounted for the current financial accounting and cost accounting with some of the characteristics, it is a management accounting, the starting point and destination are for the safety management services. It can not rigidly adhere to the existing financial accounting and cost accounting rules and regulations, but should reflect their own special characteristics. Therefore, the security ideal for cost accounting method is mainly to accounting, statistics, accounting, supplemented by the basic features are: the apparent costs, mainly accounted for by the accounting method to get information, but in the specific use of These accounting methods, can be flexible depending on the circumstances, such as data collection do not have to set some of the original documents, there is no need for double entry bookkeeping, books and records can also be greatly simplified, the cost of imputation and allocation should be flexible and so on. The accounting methods of those who can not get the hidden costs, the use of statistical methods to obtain. on the information obtained by the accounting methods, accurate, complete, and through statistical means, the business information obtained by the means, in principle, requires only basic accuracy, but also does not require the original certificate as the basis for access to essential information.

(B) sound Financial Management system security costs
SMEs in high-risk industries to determine the safety plan cost plan the source of security costs and the specific use of security costs is an important basis for Financial Management. Business properly prepared and carefully plan the implementation of security costs, planned costs of provision and rational use of safe for the improvement of working conditions and safety businesses, improve the efficient use of investment in safety, are of great significance.

Security plans need to determine the cost of business plan of the increase in security costs, reduce and balance amount. In the preparation of annual plans, on the one hand balances according to plan early and plan the amount of annual extraction to determine the amount of funds available; another aspects of the use according to regulations and the actual needs of enterprises, determine the amount of annual expenditure plans and programs the amount of year-end balances, the overall balance.

As most of the security costs of technical measures for a variety of security projects and industrial hygiene projects, therefore, to arrange business plan expense of safety, but also the preparation of safety investment spending plans. Safe investment spending plans need to determine the annual business plan investment spending of safety occurred, resellers and balances.

(C) increasing the use efficiency of security costs
High-risk industry, security costs in arranging the use of SMEs, it should be carefully, and strive to save, spend the limited funds wisely, to do more with less, improve the effectiveness of the use of funds. In particular, the larger the amount of those one-time investment in the safety investment projects, feasibility studies should be carried out in advance, select the technically advanced and economically rational optimal solution, the gateway to a good use of funds. Meanwhile, expenses should also establish and improve the safety approval system, according to a predetermined secure funds to invest, strict examination and approval of each expenditure, the use of funds according to plans and systems to prevent losses and waste.

Project implementation process in the security, financial sector supervision and budget should be carefully correct implementation. Security needs of the project materials, equipment and other materials supplied by the company for relevant departments to plan, in conjunction with the Finance department and sign a contract supplier. Finance Department the timing of payments under the contract will include special material procurement costs of security expenditure on revenue and expenditure plan for payment according to plan. For no contract, temporary unplanned purchases must go through additional procedures required plans, or, the financial sector the right to refuse payment in order to prevent blind purchases.

Management fees for security, security management must submit cost estimates for approval by the Finance Department is charged only in the security costs. Financial departments should regularly conduct a cost analysis to identify the reasons for the actual cost from the budget, to take timely measures to reduce costs, the use of cost-effectiveness to improve safety.

(D) strengthen the analysis and control of security costs
Management level of security costs is the quality and efficiency of enterprise security a comprehensive reflection of the correct accounting of security costs on the basis of analysis, the purpose is to find enterprise security problems in production activities, in order to make the right investment decisions and management of the safety basis. different types of SMEs have different requirements for security costs, so the analysis of the content will be different. In general, the high-risk industry, the analysis of small and medium enterprises require a higher security costs, security costs have occurred need to know the total enterprise, understand the security costs preventive costs and losses of a proportional relationship between the costs, security costs and planning of the actual costs of security and the relationship between the various control targets.

Links to Research Papers Download http://www.hi138.com control security costs of security costs is actually the dynamic management process, that is, the production process of enterprise security for all cost calculations and rigorous analysis, pointed out that the deviation promptly corrected, the safety cost management to achieve the desired control objectives of the process. high-risk industries according to their production and operation of small and medium characteristics and safety features, take various measures to control security costs. common measures include: the preparation of the budget plan security costs, improve Employee awareness of security costs, strengthen the use of safety equipment and facilities management, emergency plans, security costs to establish a scientific management model, creating a positive safety culture and so on.


Third, create a good internal control environment

(A) the cost of increased security risk management awareness
Put into use in enterprise security costs has some risk, specifically refers to the process of making the investment in safety, due to insufficient understanding of safety investment properties, resulting in enterprise security inefficient allocation of investment resources, combined with a variety of difficult to predict and control The role of accident factors, which eventually led into the effects of corporate security for achieving the desired goals, or a production safety accidents, leaving the enterprises have suffered losses.

High-risk industry, SMEs are often more in the Development process is to consider size of the business expansion, market Development, and consideration of risk is relatively small. Risk is everywhere, in the course of business enterprises should fully understand the investment risk of Enterprise Security is an objective reality, and try to completely avoid is not possible. only increase the cost of enterprise security risk management awareness, it can increase its sensitivity to various Risk Factors, and response capabilities, thus improving the efficient use of security costs.

(B) improve the responsibility system for security costs
Safety is a high-risk industries SMEs sustained, stable and healthy Development of the foundation, and security costs is to improve enterprise security and financial security level of production, therefore, the management of security costs must be under the leadership of enterprise managers by the Finance department of the management, while clearly the financial sector and security management responsibilities and to establish accountability and improve the management of security costs. Its main contents are: First, management of the financial sector as the cost of full-time security department, responsible for the security costs of extraction, accounting and analysis; II Safety management is the use of funds, to make use of the Program and Budget, the Finance department and consent before use; Third, financial departments should regularly check the security costs of safety management departments use to promote rational use of safety management security costs .

(C) management of information security costs smooth channels of communication
Security costs of enterprises not only need to bear the main responsibility for the financial sector, enterprise security need the active participation of the productive sector and close coordination, which play an integral monitoring force, therefore, information and communication systems will affect the cost of enterprise security and efficiency of internal control effect.

At present, SMEs in high-risk industry, accounting and management of security costs is no uniform organizational structure design patterns, but to observe a principle that is conducive to improve management efficiency, ensure the flow of information. There are two forms available: one by the financial accounting cost accounting department is responsible for organizational security, that the establishment of financial and accounting sectors Accounting Professional Group (permanent body), with the necessary accounting staff at regular periods. For smaller companies, only need to specify the person responsible for Accounts can be; second by the enterprise security management cost accounting department is responsible for organizational security, control operator can do with and counted as effective, and continuously improve the safety management level. no matter what manner, need financial and accounting department personnel on a regular basis and security management personnel to communicate and exchange. ●

[References]
[1] Ministry of Finance, National Development and Reform Commission and the State Administration of Work Safety, the National Coal Mine Safety Supervision Bureau. On the adjustment costs of extracting coal production safety standards to enhance security costs of coal use and management and supervision of the notice [EB / OL]. Http : / / www.cdwso.chengdu.gov.cn/detail.asp?ID=1031.

[2] Ministry of Finance, the State Administration of Work Safety. High-risk industries and enterprises cost of safety Interim Financial Management [J]. ACCOUNTING, 2007, (1), :77-78.

[3] Yang Shiyong, Zhu Xueyi. Coal production cost accounting and management of security problems and countermeasures [J]. China Coal, 2007,33 (4) :69-70.

[4] Wang Linjie. On the capital investment cost of the coal enterprise security management and use of [J]. Coal safety, 2006, (9) :74-75 Links to Research Papers Download http://www.hi138.com