Although good internal controls to achieve the above objectives, internal controls, but no matter how perfect the design and operation, it can not eliminate its inherent limitations. Such limitations must also be aware of and increase prevention. Mainly as follows: (1) subject to the limitations of the principle of cost-effectiveness; (2) If the differing levels of responsibility of the staff of the neglect of control procedures, misjudgment, and even collusion, fraud and other internal and external collusion often leads to failure of internal controls; (3) Management abuses his power, go beyond control, to set or ignore the implementation of internal control, but also make the establishment of internal controls exist in name only. Second, the basic structure of the internal control The basic structure of the internal control. Include the control environment, accounting systems and control programs in three areas: (A) control environment. Control environment refers to the establishment or implementation of a policy having an impact on a variety of factors, primarily reflect the unit managers and other personnel to control the attitude, awareness and action. These include: management ideology and management style, flat organizational structure, management functions and the constraints of these functions to determine the method of authority and responsibility, managers, monitoring and inspection work on the use of control measures, personnel working principles and its implemented, affect the business units of various external relations. (B) the accounting system. Refers to units set up accounting systems and accounting supervision of accounting methods and procedures for operational activities. Effective accounting system should accomplish the following: 1, identify and record all real economic operations in a timely and sufficiently detailed description of economic operations in order to right the economy in the financial and accounting reports to make appropriate business category. 2, measuring the economic value of the business in order to record its financial accounting report, the appropriate monetary value. 3 to determine the economic business occurred at a time, so that the economy of business records in the appropriate accounting period. 4, in the financial and accounting reports in an appropriate expression of economic operations and disclosure of related matters. (C) control procedures. Control procedures that managers develop policies and procedures to guarantee the achievement of certain objectives. These include: business and economic activities in the economy right of approval; a clear division of responsibilities related to personnel, and effectively prevent fraud; vouchers and bills to set up and use, should ensure that operational and is properly documented; property and its use must have access to records protection measures; right has been registered to conduct business and its valuation review and so on. Third, a basic form of internal control The basic methods of internal control are: organizational planning control, authority to authorize the control, budget control, physical control, cost control, risk control and audit controls. (A) To organize planning and control. According to the internal control requirements, the unit in determining and improving the organizational structure of the process, should follow the principle of separation of incompatible duties, the so-called incompatible duties, are those If a person or department as both possible fraud, also be able to conceal their corrupt conduct their duties. Unit of economic activity can usually be divided into five steps: the authorization, issuance, approval, implementation and recording. Under normal circumstances, if the above steps by a relatively independent of each person (or department) to implement, we can guarantee the separation of incompatible duties, easy to play the role of internal controls. Organized planning control mainly include two aspects: 1, the separation of incompatible duties. Such as the accounting in the accounting and cashier in the case of incompatible duties, need to separate. Should be separation of duties typically include: to authorize a particular transaction should be separation of duties; the implementation of an economic business functions and auditing functions of the business should be separated; the implementation of an economic business functions and records of the business functions should be separation; custody and recording functions of a property, the property should be separation of duties and so on. Separation of incompatible duties is based on the assumption that the two people unconscious with the possibility of committing an error is very small, while a person a potential for fraud is greater than two people. If you break this assumption, the separation of incompatible duties can not play a controlling role.