The Research On Internal Control Of Procurement Activities In KR Furniture Company

With the continuous development of social economy, the increasing in internal control failures, and therelease of the systems of internal control standards, people have recognized the importance of establishingand implementing enterprise internal control for enhancing risk prevention capability and businessmanagement standards. The furniture industry has been relatively rapid developing, but now thecompetition in this industry is growing in intensity as this industry continues to mature and the policies ofreal estate and forest resources protection are enacted. How to control risks and how to reduce costs is thekey to success for enterprise. However, the procurement costs of this industry have been high, which issubject to national policies, the shortages of raw materials, the low level of purchasing management, andthe furniture demand for individuality and diversity. So the furniture industry urgently needs to introducenew methods of management and information technology, standardizes the procurement activities, controlsthe procurement risks, improves business management standards, reduces procurement costs, and enhancesenterprise’s core competitiveness. In this context, this paper studies the internal control of procurementactivities in KR Furniture Company.First of all, this paper introduces the background, the significance and the research status, identifyclearly the purpose of this paper, the research ideas and the research methods. Secondly, this papersummarizes the relevant theories, including the related theory of procurement activities and the standard forenterprise internal control. Thirdly, this paper summarizes the characteristics of the furniture industry. Bydescribing the types of this industry, industrial scale, sales models, production models and procurementactivities, this paper distinguishes the furniture enterprises from other enterprises. Fourthly, this paperintroduces the basic situation of KR Furniture Company, analyzes the main problems in the internal controlof procurement activities of KR Furniture Company. These problems include the lack of professional andtechnical personnel, the imperfect risk assessment mechanism of procurement activities, makingprocurement planning difficulty, the lack of effective supplier management, the low level of information,and the lack of dedicated internal oversight bodies. By these problems are summarized in the five elements of internal control, this paper analyzes the internal and external causes. Finally, according to these problemsin internal control of procurement activities of KR Furniture Company, this paper starts with theoptimization study of internal control of procurement in KR Furniture Company, which starts with the fiveelements of internal control. This optimization study is focused on optimizing the internal environment,improving risk assessment mechanism of procurement activities, and strengthening control activities of theprocurement process. Simultaneously, this paper applies the relevant theory of supply chain managementand information technology to improve the level of supplier management and ensure information deliveredtimely, accurately, completely.By the study of the internal control of procurement activities in KR Furniture Company, this paperhopes that people begin to emphasis on procurement activities in furniture industry, especially theapplication of internal control in the procurement activities of this industry. At the same time, this paperalso hopes to provide guidance and recommendations for the construction and optimization of internalcontrol in this industry, continually improve the business management standards in this industry.