Research On Internal Control Of Procurement And Payment Business Of Company A

With the continuous changes of the global economic environment,Chinese enterprises are facing fierce competition and challenges,internal control has become an effective barrier to prevent and resist risks.The rapid development of information technology and the change of the operating environment prompted the COSO Committee to release the “Internal Control-Integration Framework” in May 2013.The framework has important reference for the improvement of China’s internal control system.Manufacturing industry is an important part of our national economy.It plays a pivotal role in economic development and social stability.Procurement and payment business is not only an important part of manufacturing enterprises,but also a key channel for enterprises to generate capital links with the outside world.A perfect internal control system of procurement and payment business can reduce the procurement cost,standardize procurement behavior,prevent procurement risks,and ensure the normal operation of production.First of all,the paper sorts out domestic and foreign scholars’ research on internal control,and introduces the research methods and contents.This paper discusses the evolution process of internal control,and points out that the paper draws on the relevant contents of the five-element model and 17 basic principles in the 2013 “Internal Control-Integration Framework”.The paper introduces and compares the “Internal Control-Integration Framework” issued by COSO Committee in 1992 and 2013,and expounds the relevant theories of internal control of procurement and payment business.Secondly,the paper chooses Company A as the case object and conducts a field investigation.The study uses the in-depth interview method and walk-through test method to obtain the basic profile of Company A and sort out all the business processes.On the basis,the paper focuses on the status quo of internal control of procurement and payment business.Through the analysis of the status quo,we find many problems in the internal control of procurement and payment business of Company A,including: the control environment is not ideal,the risk assessment mechanism is not perfect,the control activities are not strictly enforced,the communication channel is not smooth,and the supervision and review mechanism is weak.Finally,according to the five-element model,17 basic principles,China’s internal control requirements,and the status quo of Company A,the paper proposes measures for Company A to optimize the internal control of procurement and payment business,including: improve the procurement and payment business system construction,strengthen the human resources construction of the procurement and payment business,standardize information system permission setting;establish a "3+1" defense line for risk management,identify,evaluate and respond to the risks of procurement and payment business;clarify the procurement management department,standardize some emergency material requisition processes,improve the supplier management mode,optimize procurement contract approval and evaluation process,strengthen the testing procedures for purchased parts used for the first time;improve internal communication mechanism and focus on external information communication;improve internal and external supervision mechanisms of procurement and payment business.This paper hopes to provide some reference for other manufacturing enterprises through a more detailed and comprehensive study on the internal control of company A’s procurement and payment business.