Release of the Report of 2020 Internal Control Index for Zhejiang Public Companies
The impact of spreading Covid-19, intensified international trade, industry transformation and upgrading, financial problems, and increasing internal and external risks seriously impede the sustainable development of enterprises. Therefore, internal control and continuous improvement are particularly important for enterprises to achieve healthy development and effective risk control.
On December 19, 2021, the School of Management, Zhejiang University, together with the Academy of Global Zhejiang Entrepreneurship, Zhejiang University, the Listed Company Association of Zhejiang, Zhejiang Association of CFO and the Institute of Finance and Accounting, Zhejiang University, jointly released the 2020 Internal Control Index for Zhejiang Public Companies.
Meanwhile, 2021 Symposium on High-quality Development of Public Companies & the Release of Internal Control Index for Zhejiang Public Companies, was successfully opened online. Experts, scholars and industry elites from government, universities, and public companies gathered to discuss the theme of Digital Intelligence Innovation: Exploring New Boundary of Internal Control. The event attracted widespread attention of streaming media as well as the industry.
The Report of 2020 Internal Control Index for Zhejiang Public Companies is one of a few important research results in terms of the internal control evaluation of public companies in China. The Report was compiled by the team of Prof. CHEN Jun, Head of Finance and Accounting of ZJU-SOM, and Director of the Institute of Finance and Accounting, Zhejiang University. The report was first released in 2017 and published annually based on the systematic analysis of data from public companies in China.
According to the Report, the threshold of Top 30 Internal Control Companies of Zhejiang Province has been gradually raised in recent five years. Compared with last year, there are 12 public companies in Zhejiang that have been listed in China Top 100 Internal Control Companies. The total number of Zhejiang enterprises listed in the top 100 ranked third in China, the same as that in 2019. It is worth mentioning that enterprises of emerging industries accounted for more than half of the Top 30 Internal Control Companies of Zhejiang Province for the first time. Among them, companies in the new energy industry took the highest proportion, followed by new energy vehicle enterprises. Enterprises in biotechnology, information technology of new generation and high-end equipment industry took a relatively low proportion. About half of the nine newly listed companies belong to the new energy industry, indicating that companies in key industries cultivated by the country have great space to improve their development quality.
By comparing Top 30 companies in this year and last year, the Report found that, in 2020, the complex international situation, the domestic reform, and the impact of Covid-19 have brought great challenges to the development of enterprises. Many enterprises with poor internal control are in a dilemma, while enterprises implementing sound internal control and attaching great importance to sustainable development can maintain a good trend. The Report also indicated that, the public companies in Zhejiang Province made the most outstanding progress in information communication quality, which can be attributed to the digitization of enterprises and intelligence of finance.
Besides, the private economy of Zhejiang Province continued to be dynamic, and there are a considerable number of private enterprises that has been listed in the Top 30. However, most state-owned enterprises selected in the Top 30 are public state-owned enterprises. The Report suggests that Zhejiang should make use of the radiation effect of benchmarking enterprises, and improve the overall internal control level of public companies in the province.
The Report of 2020 Internal Control Index for Zhejiang Public Companies has been released for five years and aims to improve the internal control and risk prevention capability of public companies in China, and to promote the sustained, healthy and high-quality development of capital market in China and public companies in Zhejiang Province.