Research On Internal Control Of Procurement Business In Engineering Materials Enterprises

During the past decade,many great achievements have been established in China’s infrastructure construction.Enterprises in engineering construction have actively involved in and affected on the speed and quality of infrastructure construction.To improve the quality and efficiency of procurement,and ensure orderly supply with controlled costs and risks,various large construction groups have established engineering materials companies that are specifically responsible for procurement.As a “grain grass official” at the construction site,these enterprises must be professional in procurement with lower cost and high quality,in addition to overcoming the pressure of their own development.In this thesis,we took the procurement business in service-oriented engineering enterprise as the research object.To improve the internal management quality of procurement business,we focused on risk control by optimizing internal control measures,and the efficient procurement of engineering materials enterprises for projects construction.Firstly,we introduced the background of the procurement business of engineering materials enterprises.By reviewing the theories and current status of internal control and procurement business,we confirmed the objectives and contents of this research,as well as the study methods.Secondly,we analyzed the characteristics of procurement business based on several theoretic frameworks,such as proposals from the Committee of Sponsoring Organizations of the Treadway Commission(COSO),and norms for the application of internal control of enterprises jointly issued by the Five Ministries and Commissions of China.We examined the process of the procurement business in service-oriented engineering enterprise,and summarized the key control points according to the guidelines.Thirdly,we provided a case study of the procurement business in China Railway X Materials Co.,Ltd.We elaborated the status of internal control of the procurement on both company and business level by identifying on-site procurement risks.We employed the hierarchical and five key factors analysis of procurement risks to clarify the internal control problems existing in company’s procurement business.Last,we proposed several improving solutions to these existing problems,including creating a healthy internal environment,establishing a scientific risk assessment system,implementing effective control activities,building an effective information platform to communicate,and organizing professional internal supervision.With the above-mentioned actions,we would hope to improve the risk control of the procurement business of China Railway X Materials Co.,Ltd.,increase the supply efficiency while ensuring the quality with lower cost,reduce the risk of the procurement chain of the Group’s main business construction sector,and finally achieve high-class efficiency and effectiveness of the group-level operation.