Internal Control Research Of Corporate Purchasing

In past decades, construction of enterprise internal control has attracted much attention of businesses and entire communities. There is much research on internal control both in China and abroad. This has been concerned primarily with establishing internal control system frame and process controlling with very useful results. In these studies, researchers commonly focused on system optimization and management framework, but research on detailed analysis of some key points of internal control is very rare, such as procurement procedures. Although there is a significant amount of research on purchasing management, these always belongs to the fields of logistics and supply chain,so it does not considerate internal accounting control or accounting data analysis. Total purchasing cost is 50-60% of general product total cost which means that consideration of purchasing accounting cost is highly important in any enterprise. This greatly influences both enterprise internal control and profit spatial extension. This thesis studies avoidance of risk, improvement of internal control effectiveness, and the role of accounting information in procurement control.First, the thesis reviews the theoretical research on internal control at home and abroad. Then, the correlative theories on internal control and procurement are introduced. Second is a statistical analysis of current methods employed in the study of procurement internal control. This analysis shows that although there are many studies on internal control procurement procedures, investigation of either the economy of procurement requirements or supplier selection is rare. Further study in these fields would improve maneuverability of the enterprise internal control. Third, a method of detailed analysis of the economy of procurement requirement and supplier selection is proposed. In the economic analysis of procurement for large projects, the sensitivity analysis of projects was made. This was based upon accounting information from the corporation. Case analysis shows how to reduce procurement risk. Fourth, with the aid of historical accounting data from the enterprise, a multivariate analysis of economic quantity ordered was made. The purpose is to control risks in ordering that arise from various factors. Finally, a method to improve reliability of supplier selection is established. It was based on an AHP-based model, supplemented by activity-based costing. This included a detailed analysis of methods used to research supplier selection. This research presents methods for making order decisions that will improve the effectiveness of internal control.