Listed companies in the Chinese mainland are lagging in establishing internal controls despite a looming deadline to put a framework of controls in place, a recent survey reveals.
More than half —56% — of the respondents in a survey of 126 companies by Deloitte Touche Tohmatsu said they either have no internal controls in place or their systems are not up to par. Listed Chinese companies have until July 1, 2009 to establish a system that complies with the Basic Standard for Enterprise Internal Control, which was agreed to last month by the China Insurance Regulatory Commission and several other regulatory agencies.
Among the obstacles to establishing internal controls, 57% of the respondents pointed to lack of attention, support and guidance from senior management as a major obstacle.