Research On The Internal Control Of SMEs In Procurement Process

In recent years, internal controls are attracted more and more attention. With the"Sarbanes - Oxley Act"and"Enterprise Risk Management - Integrated Framework"issued, in the Western Developed Countries, especially the United States, the Business Community has launched the construction of internal control to a climax. Chinese enterprises are also vigorously promoting the building of internal control under the guidance of the government; Theorists and Practitioners have also intensified their studies of internal controls. However, people are more concentrated in large enterprises and pay little attention to internal control issues of SMEs. At present, with the still spread of the global financial crisis, SMEs'internal control issues become increasingly prominent.Procurement business is one of links which are the most important and the weakest of controling in the operating of SMEs. The weak awareness of internal controls with some their own deficiencies would cause some serious problems including high procurement cost, poor quality, procurement fraud etc. ,bringing small and medium enterprises a serious crisis for surviving and developing. Therefore,it is very significant to strengthen internal control in the procurement process of SMEs and ,at the same time ,it is of great practical significance to study for appropriate internal control by focusing on the procurement process to explore internal controls for SMEs. Based on it, with analyzing the research results of internal control ,home and abroad, this paper captured internal control of the procurement aspect in the operation of SMEs as a research object and summarized the causes of the problems in the procurement process of SMEs through In-depth investigation into enterprises so as to try to build a strongly practical program of procurement internal control according to the procurement process and its internal control features.At first , this paper has sorted out the crucial elements and the practical needs for the construction of internal controls from the literatures , home and abroad , with the Literature Review Method. And then based on internal control standards and procurement internal control application guidelines , combining the elements of COSO Risk Management Framework,it has tried to build internal control in the procurement process of SMEs from three aspects (dimensions),namely,the determination of the procurement business processes and the main control content, the establishment of the procurement internal control system and the recognition of procurement internal control processes and the control points. As for these three aspects (dimensions),the first two is the foundation and the last one is the key,and this trinity has resulted in internal control matrix of the procurement eventually. The program——Procurement three-dimensional internal control program , firmly grasping the purpose for the scientific establishment and the effective implementation,has pointed out that it is feasible,on the one hand ,to establish the control layout from the line to the plane and carry out comprehensive control by improving the procurement process and procurement flow control vertically and perfecting the procurement control system horizontally;on the other hand,to conduct focus control by crawling critical control points in the process so that control can implement well. At the last, this paper , combining the theoretical study and practical study , has enriched and refined further the program through the practices in SL company, which makes it more operational ,aimed at a reference for a large number of SMEs in China.