Case Study On The Internal Control System Of An E-Commerce Company

Chinese enterprises are nowadays attaching more importance to internal control, as they’re provided with guidelines from Basic Rules of Internal Control for Chinese Enterprises. But for enterprises in the emerging industry of e-business, practices and study are limited. Besides, they are different from traditional way of doing business in many ways, such as the inventory management, sales platform and reliance on information system. As a result, the traditional internal control system design is not suitable for them. So it is meaningful to research on this issue through a case study.This thesis takes a Chinese B2C company for object of case study. At first the background information is introduced. Then internal control system is presented and evaluated on the basis of the framework proposed by Basic Rules of Internal Control for Chinese Enterprises, which include Internal Environment, Risk Assessment, Control Activity, Information&Communication, and Monitoring. The company has done well in many aspects. For example the company values integrity most, and has relatively good risk assessment procedures, comprehensive information system controls and complete internal monitoring process. But it still has some problems. The internal control department has too much power. The risk assessment procedures are not constantly performed. There are conflicts of interests in pricing and promotion. And the information system has potential safety troubles. At last, proposals for solving problems above are put forward to help the company and other similar enterprises to improve their internal control systems.