The Research On Optimizing Internal Control Of Procurement And Payment In H Tobacco Industry Company

Long-term monopoly management brings enormous profits to our tobacco companies,and also causes the weakness of their risk consciousness and internal control. Especiallywith the intensifying competition of international market, foreign cigarettes begin to seizeChina’s market, this contradiction will become more prominent. The development ofChina’s tobacco enterprises encounter a bottleneck. The tobacco enterprises start torecognize the importance of internal controls for the development and stability of businessoperation. Procurement and payment is an important part of internal control.Well-established internal control of procurement and payment plays an important role inreducing the costs, guarding against the risk of purchasing and ensuring the normaloperation of production.The procurement business of the tobacco industry enterprises is different from thenormal one. It has two procurement models, market and plans, which make their internalcontrol of procurement and payment particular. This paper chooses H Tobacco IndustryCompany as a example, combining with the current situation of its internal control ofprocurement and payment and its industry characteristics, analyses the existing problem ofits internal control of procurement from five elements which are the internal environment,risk assessment, control activities, information and communication, internal supervision.And finally according to the problems related, we put forward the correspondingoptimization proposals. This research is aimed at promoting the company’s internal controlof procurement and payment, and also has some use for reference to tobacco industry. Thispaper, based on the basic theory of internal control, points out that the company needs tobuild a sound internal control environment from the aspects of governance structure,human resources policies and risk management culture, ensuring the implement foundationof the internal control of procurement and payment. And it also needs to build a dynamicrisk evaluation system to promote its ability to detect and defuse the risks. In addition, thepaper puts forward the improvement measures related to tobacco leaf and other materialspurchasing control activities. What’ more, it proposes that the company should perfect itsinternal and external information exchange mechanism and speed up the construction ofinformation technology to intensify the communication in procurement and paymentactivities, and establish the daily continuing monitoring and independent reportingmechanism to strengthen the supervisory role of internal audit in material procurement.