The Key Points Design Of Internal Controls On Sales And Collection Cycle For ABC Corporation

The occurrence of financial fraud and accounting fraud cases like Enron, WorldCom and others has made serious impact on the normal order of U.S. and international capital markets. Some research results show that internal controls deficiencies are the main factors that result in business failure and, ultimately, business operators taking risks to deceive investors and the public. In recent years, China's enterprise reform has increasingly become the central link of the entire economic system reform. With major effective reform measures being taken, such as the consolidation and reorganization, mergers and acquisitions, separating secondary lines of business from core, etc., the overall quality of China's large and medium enterprises and their operating quality, innovation ability and international competitiveness has improved significantly. Therefore, the study of internal controls is of great significance for the promotion of raising Chinese enterprises management level, the guarantee of accounting information quality, the improvement of corporate governance structures and information disclosure system, the protection of investors'legal interest and the guarantee of the effective performance of capital market.In this paper, based on the evolution of interpretation of internal controls in the West and in China, first, expound the theory of internal controls, then review the six stages in history that people went through on the understanding and appreciation to internal controls, and get a deeper understanding of the intension of internal controls from several aspects like the internal controls concepts, objectives and design principles. On the basis of theory, conduct depth analysis on ABC Corporation sales and collection cycle internal controls. First, introduce ABC's general background, then analyze in detail ABC's sales and collection cycle internal controls'weaknesses-Sales rebates and credit management, conduct detailed analysis of the existing problems of this phenomenon, and find the causes of the problems, Based on the above, apply the basic principles of internal controls and design the key points of ABC's internal controls system on sales rebates and credit management. Last, review the research paper content, draw a conclusion and indicate the paper's limitations and the need of further study.