How Can We Grasp The Pulse Of Financial Reform To Promote The Financial Reform Of Enterprises?

The publication of the guiding opinions on deepening the reform of state-owned enterprises marks the beginning of the reform of state-owned enterprises.

The reform of state-owned enterprises will change the governance mode and operation mode of state-owned enterprises, and will inevitably require changes in financial management.

So how should state-owned enterprises cope with these financial changes? How should CFO (chief accountant) grasp the pulse of financial reform to promote the financial reform of enterprises? This article will be an excellent interpretation for you.

The guiding opinions on deepening the reform of state-owned enterprises (hereinafter referred to as "guiding opinions") have been announced. In view of the outstanding contradictions and problems in the reform and development of state-owned enterprises, the guiding opinions comprehensively and systematically put forward a series of measures to deepen the reform of state-owned enterprises.

It not only embodies a consistent inheritance, but also reflects the innovation of advancing with the times. It embodies the synergy and coupling of reform, and embodies the pertinence and effectiveness of the measures.

There are many breakthroughs in the "guiding opinions" issued here. From the financial point of view, the main points are as follows.

The guiding opinions put forward that the reform of state-owned enterprises should be followed.

Economic law and the law of enterprise development persist in separating government from enterprises, separating government capital from ownership, separating ownership from management rights, and promoting state-owned enterprises to become independent market participants in accordance with their own laws, self financing, self financing, self risk and self-development.

A series of related important measures in the Guiding Opinions: implement the property rights and management autonomy of enterprises in accordance with the law; pform the functions of state-owned assets supervision institutions; promote enterprises to improve the market-oriented operation mechanism, promote the shareholding system reform of the company, actively introduce all kinds of investors; commercial state enterprises implement commercialized operation according to the market requirements; and independently carry out production and operation activities according to law.

The guiding opinions put forward that state-owned enterprises should be classified into commercial and public interest categories, and classified reform, classified development, classified supervision, classification and accountability, and classified examination, so as to promote the integration of state-owned enterprises and market economy.

The management methods of enterprises of different nature are even different in some aspects.

The classification of enterprises into commercial and public welfare categories has laid the foundation for classified management.

The current difficulty is that many state-owned enterprises, especially the central enterprises, have commercial assets and public interest assets. Some assets are classified as public welfare in the name of commercial and public interest.

The premise of realizing classification management is to separate the assets within the existing enterprises according to the principles of classification, and then merge similar items in a larger scope.

The guidance also pointed out that "all state-owned enterprises that need state ownership should actively introduce other state-owned capital to realize equity diversification", deepen reform to the group level, "create conditions to realize the overall listing of group companies"; "allow some state-owned capital to be converted into preferred stock, and explore the management system of special state shares in a few specific areas".

The flexibility of ownership structure will enhance the efficiency of enterprises and be compatible with national policy objectives.

The advantage of preferred stock is that state shareholders only get economic benefits from shares and do not have the right to vote, that is, the government pfers the right of management of enterprises in exchange for a stable income right.

The best example of national special stocks is Golden Share, which appeared in 1980s.

The British government implemented the British Telecom's privatization programme in 1984. The British government completely abandoned its ownership and earnings and retained only 1 shares.

The right of gold shares is mainly reflected in the veto.

The advantage is that the government can prevent state-owned enterprises from infringing upon consumers' interests and national interests after privatization.

At the 15th National Congress of the CPC in 1997, the strategic reorganization of state-owned enterprises was proposed.

In 1997, there were 262 thousand state-owned and state-controlled enterprises, and the number dropped to more than 119 thousand by 2006.

Since the establishment of the SASAC in 2003, the number of central enterprises has decreased from 196 to 112.

The "guidance" put forward "to promote state-owned capital to the national security, national economic lifeline and national economy and the people's livelihood important industries and key areas, key infrastructure concentration, forward-looking, strategic industry concentration, to the core competitiveness of the dominant enterprises."

Therefore, the central enterprises are expected to re organize the merger and the number will be further reduced.

In September 18, 2015, Premier Li Keqiang chaired a symposium on deepening the reform and development of state-owned enterprises, and pointed out that we should promote merger and reorganization of enterprises, grasp the disposal of "zombie" enterprises, long-term deficit enterprises and inefficient inefficient assets, improve the allocation and operation efficiency of state-owned capital, speed up technological pformation and internal potential exploitation, reduce losses, expand profits, enhance the vitality, competitiveness and risk tolerance of enterprises, and ensure the preservation and appreciation of state-owned assets, so as to create more social wealth, thereby promoting the overall improvement of macroeconomic operation.

"Promoting the mixed ownership reform of state-owned enterprises" is one of the key points in the reform of state-owned enterprises.

The guiding opinion calls for the introduction of non-state-owned capital to participate in the reform of state-owned enterprises.

In the fields of oil, natural gas, electricity, railways, telecommunications, resource development, public utilities and other fields, a number of projects that conform to industrial policies and are conducive to pformation and upgrading have been launched to non-state-owned capital.

In fact, Sinopec in the oil field has fired the "first shot" of the mixed ownership reform of central enterprises.

In July 2014, Sinopec formally announced the plan for attracting investment from the mixed ownership reform, and decided to introduce social and private capital through the way of increasing capital and expanding shares.

However, for mixed ownership, private entrepreneurs have both enthusiasm and misgivings. They worry that they will be deprived of independent business opportunities and make private enterprises a vassal of state-owned enterprises.

In view of this worry, the guiding opinions stipulate that the state-owned enterprises should be able to develop a mixed ownership economy.

For state-owned enterprises that are suitable for further reform of the mixed ownership system, we should give full play to the role of market mechanism, adhere to the policies of the land, the strategy of industry, the strategy of enterprises, the independence and independence, the appropriate control and the appropriate participation.

We should exercise the same rights and share the legitimate rights and interests of all shareholders.

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State assets are hard won and are the common wealth of the whole nation.

For this reason, the guiding opinions put forward to strengthen the internal supervision of enterprises, strengthen the supervision of departments and posts where power concentration, capital concentration, resource enrichment and asset accumulation, prevent abuse of power, establish a sound and effective external supervision mechanism, implement information disclosure, and strengthen social supervision.

The guiding opinions clearly stipulate: "it is necessary to strictly investigate the responsibility of dereliction of duty of the relevant personnel for the serious violation of law and discipline in the enterprise, and do not pursue, concealment, report or investigate."

First of all, the guiding opinions put forward the establishment of a hierarchical management system for leading personnel in state-owned enterprises, the implementation of professional manager system, the smooth passage of existing managers and professional managers, and the board of directors hiring and managing professional managers in a market-oriented manner, and reasonably increasing the proportion of market selection and appointment.

Secondly, the guiding opinions put forward a differentiated salary allocation method for leading officers of state-owned enterprises to match the selection method, adapt to the functional nature of enterprises, and link with business performance.

Leaders of state owned enterprises appointed by the Party Central Committee, the State Council and local Party committees, governments and their departments shall reasonably determine the basic annual salary, performance annual salary and tenure incentive income.

The market-oriented salary allocation mechanism for the professional managers selected by the market can be explored and improved in a variety of ways in the medium and long term incentive mechanism.

Once again, the "guidance" put forward "explore the implementation of mixed ownership enterprise ESOP", we must adhere to the pilot first, on the basis of experience gained steadily and orderly advance, through the implementation of employee stock ownership to establish incentive and restraint long-term mechanism.

The guiding opinion defines several principles for employee stock ownership: establishing a long-term mechanism for incentive and restraint; especially, the key employee stock ownership is to let scientific and technological personnel hold shares, not everyone holding shares or holding shares on average, and puts forward the concept of talent capital; mainly adopts the ways of increasing capital and expanding shares and setting up new capital contributions; and establishing a mechanism for circulation and withdrawal.

The above six points put forward new requirements and challenges to the financial management of state-owned enterprises. The financial management of state-owned enterprises must conform to the general trend of the reform of state-owned enterprises. Timely pformation can enhance the financial management level of state-owned enterprises while improving the efficiency and quality of state-owned assets while helping state-owned enterprises reform.

State owned enterprises are all owned by the whole people. They are important forces to promote the modernization of the country and safeguard the common interests of the people. They are also the important material and political foundation for the development of our party and our country's cause.

Financial management is the core of enterprise management, which has a profound impact on the daily operation and long-term development of enterprises.

Since the reform and opening up, China's state-owned enterprises have experienced a long development period, and have made considerable progress. They have been integrated with the market economy as a whole, and the quality and efficiency of operation have been significantly improved.

In the international and domestic market competition, a number of backbone enterprises with core competitiveness have emerged. They have made due contributions to China's economic development and people's livelihood improvement.

At the same time, the financial management system of state-owned enterprises is improving day by day, and the level of financial management is improving day by day.

Especially in recent years, state-owned enterprises have carried out bold exploration and practice in financial management. The overall financial management of state-owned enterprises has undergone many gratifying changes.

However, we should soberly realize that the financial management of state-owned enterprises is still facing many problems and challenges. There are still some problems which are not in line with the operation of modern enterprises, and there are still many aspects that are not suited to the reform trend of state-owned enterprises.

All these require the financial managers of state-owned enterprises to stand in the perspective of the overall reform of state-owned enterprises, and assess the situation and reform.

In recent years, the Ministry of Finance and the SASAC have introduced a series of policies and measures to strengthen the financial management of state-owned enterprises, such as comprehensive budget and internal control.

After several years of efforts, the effects of these policies and measures are beginning to show.

Generally speaking, the development and changes of financial management in state-owned enterprises are mainly reflected in the following four aspects.

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The new accounting standards were formally implemented in the listed companies in January 1, 2007. Since 2008, some unlisted state-owned enterprises have been piloted. So far, they have basically covered all state-owned enterprises.

The convergence of new accounting standards and international accounting standards emphasizes that accounting information should reflect the economic essence of an enterprise in a real, objective and comprehensive manner.

The great leap forward and breakthroughs in the construction of accounting standards for state-owned enterprises have made accounting more standardized and unified, and the quality of accounting information has been significantly improved.

Capital management is the main content of enterprise financial management, and is also one of the core of enterprise management.

By strengthening capital management, we can effectively curb the confusion of capital management, inefficient use of capital and even loss of state assets in enterprise management.

At the same time, in order to further standardize the operation order of state-owned enterprises, promote the macro control and control of capital raising and utilization and its comprehensive balance, it has played an important role in controlling capital risks, giving full play to the scale efficiency of funds and improving the efficiency of use.

Faced with the rapid changes in the external macroeconomic situation and the increasingly complex market competition, the SASAC has timely launched the financial risk early warning work for state-owned enterprises.

The system monitors and analyzes four types of risk indicators, such as corporate debt risk, cash flow risk, profitability risk and investment risk, to help enterprises understand financial risks, take corresponding measures in time, and take appropriate control and prevention, which has played a positive role in reducing enterprise risk.

The SASAC will guide and supervise the budgetary work of enterprises from such aspects as budgeting, budget expert examination, budget approval, budget adjustment, and budget execution analysis.

Through comprehensive budget management, the operation and management level of enterprises has been greatly improved, and the efficiency of enterprise operation has been improved.

Internal control system is a common practice of Listed Companies in the world.

The implementation of internal control system in state-owned enterprises has very important practical significance in standardizing the management of state-owned enterprises, reducing corruption and fraud in enterprises, and slowing down the risks of enterprises.

Since 2012, the Ministry of finance has issued a number of policies to strengthen the internal control of enterprises. So far, most of the state-owned listed companies have established a relatively perfect internal control system.

Management accounting has gone through more than 30 years of exploration in China, and has made many practical and theoretical achievements with Chinese characteristics in cost management, budget and performance appraisal. Many advanced models and representatives have emerged, such as Baosteel Group, Haier, etc.

The explorations of these enterprises in the field of management accounting not only make themselves taste the sweetness, but also give demonstration and encouragement to other enterprises.

Since the publication of the "guiding opinions on the comprehensive promotion of the management accounting system" in 2014, management accounting has entered the fast lane in the development of state-owned enterprises, especially large and medium-sized state-owned enterprises, and many state-owned enterprises begin to manage accounting construction.

With the change of the world economic situation, the intensification of the international market competition and the deepening of the reform of state-owned enterprises in our country, the financial management of state-owned enterprises is facing many difficulties.

To sum up, there are mainly the following questions.

In the structure of power, most enterprises have established a system of leadership responsibility.

This is a prerequisite for discussing the governance structure of state-owned enterprises.

Take the 169 wholly state-owned enterprises directly managed by the state SASAC as an example, the enterprises registered under the enterprise law adopt the general manager responsibility system, which is a general manager with a manager team to conduct business, and the general manager is the leader; while the state-owned independent funded companies registered under the company law, although the board of directors is set up, the board of directors is almost all of the units and is highly coincident with the management team of the company, so the chairman is in charge of the system and the chairman is the leader.

Therefore, we can say that in a wholly state-owned enterprise, the foundation of governance structure is the "leader in charge" system.

Some of the state-owned enterprises in some areas even though equity has been diversified and shared by a number of state-owned interest entities, the unit leadership is still under complete control.

Most state-owned enterprises have established the board of directors and board of supervisors in accordance with the law. In theory, this is a check and balance force.

However, in most state-owned enterprises, all system construction processes are carried out under the direct command and control of the unit leadership.

The board of directors is often unable to "director", and the board of supervisors is often unable to "supervisor".

The status quo of China's state-owned enterprise governance is a common situation and an accurate description.

For a long time, our country has implemented a kind of corporate governance structure that lacks checks and balances and is inefficient.

The state-owned enterprises under this governance structure have various problems, such as the absence of shareholders, insider control, nominal meetings of shareholders, lack of effective incentive and restraint mechanisms for managers, too many related pactions between listed companies and controlling shareholders, and imperfect information disclosure mechanism.

Under such a governance system, the operation of state-owned enterprises in many respects does not conform to the basic characteristics of enterprises, unlike independent market players.

The application of the assessment results is not enough. Few executives of state-owned enterprises take the blame for resignation because of their unsatisfactory performance. Some enterprises have experienced serious losses and executives pay high bonus. Many state-owned enterprises are not professional managers in the strict sense. Some of them lack the level of business. Some enterprises are insolvent, but they are still on the precarious stage, but still rely on state subsidies or implicit subsidies. Some state-owned enterprises do not follow the principle of maximizing corporate profits while making major decisions, but decide on the basis of the relationship between high-level leaders and other local leaders. Some enterprises appear to be insolvent, but the government still needs to exert their influence in order to maintain stability. For example, although the SASAC has formulated the central enterprises assessment system, it has conducted an examination of top management.

All these indicate that state-owned enterprises have not yet become independent market players with independent decision-making, self financing, self development and self risk.

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In addition to a small number of state-owned listed companies, most state-owned enterprises have low level of accounting application.

There are widespread problems such as incomplete basic data, irregular accounting items, and strict implementation of the account system.

The application level of financial accounting is not high, and of course, it can not be regarded as management accounting.

First, the consciousness of capital operation is not high. Some managers of state-owned enterprises are lack of sufficient understanding of the capital market due to their own education and experience restrictions, and have weak sense of asset allocation through capital market.

Two, many state-owned enterprises themselves are not well managed, and their operation efficiency is not high enough, so it is difficult to distribute their property through the modern capital market, and the level of capital operation will not be guaranteed.

Three, there is a lack of high-level capital operation teams.

Capital operation requires a high-quality capital operation team. At present, many state-owned enterprises have low level of financial management team, so they are not competent.

Relying solely on the third party organization will make enterprises face the risk of core information leakage.

With the deepening of the reform of state-owned enterprises, mergers and acquisitions are inevitable. If the level of capital operation of enterprises can not be significantly improved, it will be difficult to adapt to the future development.

At present, there is a common problem among financial managers in state-owned enterprises, that is, they are skilled in accounting business, but relatively weak in financial management, especially in the management accounting and modern management methods.

This is mainly due to the fact that in the current education system, the financial profession pays much attention to the imparting of book knowledge and lacks the training of personnel management quality.

Similarly, the follow-up education for financial personnel is only focusing on updating professional knowledge, but lacking the comprehensive ability training, resulting in the lack of senior financial accounting talents who can participate in management and strategic decision-making and solve complex management problems, thus restricting the further improvement of financial management level.

Managers of some state-owned enterprises lack initiative. They always listen to their superiors, and do not actively learn and explore in financial management.

Lack of professional ethics leads to some unlawful phenomena, resulting in the loss of state-owned assets.

There are many problems in the internal audit of state-owned enterprises, including internal control audit standards and key points are not clear, internal control audit lacks organizational guarantee, internal control audit methods are backward, and internal control auditors' professional quality is generally low.

These problems in internal audit restrict the improvement of internal control mechanism, weaken internal supervision, and increase the operational risk faced by enterprises.

Many state-owned enterprises have problems such as the loss of state assets, the malpractice of individual managers, and the frequent occurrence of irregular pactions. These problems are the reflection of the imperfect internal audit.

First of all, at present, state-owned enterprises generally have the problem of unscientific investment decisions. Investment decisions lack strict system, or do not carry out the existing system, making decisions blindly and blindly, resulting in many projects difficult to make profits after being launched, and many enterprises blindly follow suit and lead to overcapacity.

Secondly, many enterprises do not have strict system guarantee for financing and financing, ignoring the cost of capital and blindly obtaining capital, leading to the high cost of capital.

Thirdly, the fund management, procurement, inventory, asset management and outsourcing of many state-owned enterprises.

Such systems have problems such as unscientific process, loopholes in their implementation and inadequate implementation.

These problems often lead to various financial accidents and risks, which affect the long-term and sustainable development of enterprises.

Finally, many state-owned enterprises have not established and implemented strict bidding system, resulting in frequent corruption in major projects.

Although some large state-owned enterprises have advanced financial management platform, many small and medium-sized state-owned enterprises are backward in financial management software and hardware, and the information level is relatively low.

Some managers lack correct understanding of financial management information construction, and financial support is not enough.

Some staff members lack the ability to use modern information technology to manage financial and hardware, resulting in failure to fully play their role in purchasing financial equipment.

Cost control is an important factor to form the core competitiveness of enterprises. The strength of enterprise cost control is directly related to the competitiveness of enterprises.

The state-owned enterprises generally have such problems as idle resources and overstaffing. The problem of manpower cost is particularly serious. It is urgent to enhance control consciousness and improve control ability.

The so-called financial pformation of state-owned enterprises is to change the financial management concepts, operating mechanisms, systems and models that do not conform to modern enterprise management and market economy, upgrade the backward financial management hardware and software, grasp and apply advanced financial management techniques and means, and promote their own financial management capability to become the core competitiveness of enterprises.

The financial management of state-owned enterprises, as the core of the management of state-owned enterprises, is the proper meaning of the new round of state-owned enterprise reform.

If we only push ahead with other aspects of reform without touching financial management, such as performance appraisal, mixed ownership, equity incentive, employee stock ownership and reorganization of state-owned assets, reform will be difficult to carry out. From this perspective, the pformation of state-owned enterprises' financial management is the forerunner and forerunner of the reform of state-owned enterprises.

With the economic deflation of the developed countries such as Europe and the United States, the market environment of most of our state-owned enterprises has undergone tremendous changes. Some enterprises are facing the pains of production capacity. Some enterprises are facing the test of the technological upgrading of their products.

Against this background, state-owned enterprises must accelerate the pformation of financial management, pform the past accounting type, report type financial management, turn to control type and management type financial management.

Financial management departments should not indulge in accounting and reporting again. We must take a global view and use financial data and financial knowledge to explore new profit growth points. We must make use of all resources and advantages to carry out capital operation and re optimize the allocation of enterprise resources; we must do everything possible to control enterprise costs and strengthen cost management; we must do everything possible to finance and prevent the emergence of capital chain crisis.

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The pformation of the concept level is to change the financial management concepts inherent in the state-owned enterprises which are not in line with modern enterprise management and socialist market economy. First, establish the concept of state-owned enterprises, and establish the concept of modern enterprise management, establish the concept of modern enterprise management, set up the concept of enterprise staff competition, mount the upper and lower, and enter into the energy, set up the idea of the rise and fall of employees' salaries, adjust dynamically and link the achievements, establish the concept of modern incentive mechanism, establish the concept of equal competition and common development of various ownership economy, establish the concept of openness and pparency of financial information, and establish the idea of fulfilling social responsibility and low carbon environmental protection development.

The pformation at the institutional level is to change the financial management system and mechanism which do not conform to modern enterprise management and socialist market economy, promote enterprise governance, build modern enterprise system, and develop state-owned enterprises as competitive independent market players.

Specifically, it is to promote equity reform, determine the structure of ownership suitable for the enterprise, perfect the incentive mechanism and system construction, formulate staff incentive system and evaluation system in line with the market environment, strengthen the construction of internal control, comb the various processes and details of enterprise operation, establish corresponding internal control system according to the characteristics of enterprise business and financial operation, establish and perfect the accounting system that is in line with the market, and formulate the implementation plan and detailed rules for management accounting in line with the actual development and needs of their own development.

The technical level is to upgrade backward financial management software and hardware, master advanced financial management techniques and means, and constantly improve their financial management level and capability.

Specifically, we should change the traditional accounting and reporting forms, vigorously study, apply and develop management accounting, play a more important role in the development of enterprises, play a greater role, learn and apply the incentive measures and methods adopted by advanced enterprises at home and abroad, mobilize the enthusiasm of employees as much as possible, attract talents, retain key talents, maximize the value of human capital of enterprises, learn, master and apply modern capital operation means and methods, improve the allocation level of state-owned capital, learn, master and apply modern risk early warning, control technology and means, strengthen the construction of internal control, and enhance the risk identification and prevention ability of enterprises.

It is too low to master the knowledge of modern financial management, to adapt to the modern financial development, and to adapt to the development of modern finance, and to be able to adjust the financial management team through the training of modern financial management skills. In order to improve their financial management ability, employees who are weak in financial management knowledge and need to improve their financial management skills should be trained in a timely manner. For the lack of high-quality financial backbone and leading personnel, they should be selected through social channels; financial team assessment and incentive mechanisms should be drawn up; financial team promotion and elimination mechanisms should be formulated; and financial teams should be allocated rationally according to the actual conditions of enterprises. Neither the senior personnel nor the low-level talents should be allocated. The financial pformation at the team level is to adjust the past financial team, select the suitable high-level financial management personnel as the chief accountant or CFO, and let it lead the pformation of the financial team.