Control environment refers to the internal culture and values of fund management companies, which will affect the attitude of management and employees to participate in control activities. Management needs to formulate policies and norms that can create a reasonable control environment and maintain a good reputation through transparency, fairness, honesty and limited operation.
2. Risk assessment
Fund management companies need to evaluate the possible risks, analyze their risk types, potential severity and probability, and incorporate them into the internal control plan, formulate preventive measures to reduce risk exposure and losses.
3. Control activities
Control activities are the most basic part of the fund management company's internal control plan, including a series of control measures to prevent, discover and correct potential risks and ensure that the company's business activities comply with laws, regulations and internal regulations. The scope of control activities is very wide, which can include various financial and non-financial activities, such as account management, risk management, internal audit and division of labor system.
4. Information and communication
Information and communication refers to an important part of the internal control of fund management companies, including the internal information management and communication mechanism of the company and the relevant information and communication with the outside. Fund management companies need to improve the information communication mechanism to ensure the coordination among various departments within the company, timely information transmission and accurate information, so as to better play the function of internal control.
Step 5 manage
Supervision refers to the last important link of internal control of fund management companies, and it is the key link to ensure the effective implementation of internal control. The management should supervise the internal control system, including the implementation of various control measures, the accuracy of risk assessment and the perfection of information and communication. At the same time, the fund management company should also conduct internal audit and risk assessment regularly to ensure the effectiveness and sustainability of the implementation of the internal control system.
To sum up, the five basic elements of internal control of fund management companies are control environment, risk assessment, control activities, information, communication and supervision. These factors interact to form the internal control framework of fund management companies, which ensures the stability, systematicness, compliance and efficiency of the company's business activities and protects the interests of investors.