The Research On The Internal Controls Of Revenue&Receivables Cycle Of Luoji Company

Currently many domestic and foreign scholars are doing the research oninternal control. Many of them are largely focused on the definition of internalcontrol and the impact of SOX404provisions to domestic enterprises andcountermeasures of enterprise and the most of them are theoretical discussions, butfor specific establishment of the internal control system and implementation arenot much. In recent years, Chinese companies are developing and growingincreasingly, expanding from the domestic market to overseas markets graduallyand even a lot of them have coming into the overseas stock market for financing.The establishment of the internal control system is not only for the compliancerequirements of the SEC of U.S.A but also for the company’s business operationscan develop healthy. However, most of Chinese enterprises are very young andinexperienced, especially in the area of internal control. Facing the new trend,companies must improve overall risk management method to enhance the abilityagainst resisting risks. Therefore, China’s enterprises should take the opportunityof building internal control system to integrate, improve and enhance the existingrules and policy.The full name of this thesis’ study object——Luoji, has already establishedits own comprehensive internal control system,. Both of its two parent companiesare Fortune500companies and have listed on the American Stock Exchange.Based on the "Enterprise Risk Management----overall framework" the latestversion which issued by COSO for the overall framework, the author describes theoverview of Luoji’s overall internal control, especially focuses on the study ofLuoji revenue and receivable cycle, and then analyzes and disclose the defect of itsinternal control system. Reference to advanced concepts and concepts and methodsof internal control system, complying with china and international common laws,regulations and policies and Luoji’s domestic business operating conditions canmake out an optimized solution with scientific methods and tools, which cansmooth the whole process, achieve control functions, improve capital efficiency,reduce risk, improve turnover, reduce inventory, increase sales profits, evenenhance market competitiveness and maximize the internal control’s effect.Combining goals of public, investor and corporate with internal control to realize and achieve objectives of strategic, business, reporting, complains and assetsecurity.