Research On Internal Control Of The Purchasing-to-payment Cycle Of JW

JW, as a developing enterprise, faced with the potential risks causing by the changing market environment and the increasing extension of the business, is in urgent need of a well internal control system to identity and avoid risks in advance in order to improve management efficiency. However, the existing internal control system has some loopholes and weaknesses both on the design and the performance of the internal control system, so that it can not fully play its desired effects. Longitudinally glancing to all the companies, the same plot staged. More and more companies begin to realize the importance of internal control. Internal control construction has become one of the core competitiveness of enterprises.In recent years, as China’s economy is booming, the development of enterprises entering into a brilliant stage. Because of internal control in China started late, its development falls far short of enterprise expansion, which causing a series of questions. For instance, accounting fraud, misappropriation of assets,etc, and which lead the many once-excellent corporations to the verge of collapse. The lack of internal control has become a key factor of restricting enterprise development. These facts also have proved that the companies which want to be safe, rapid, healthy and sustainable developing, require a suitable internal control system. A scientific and rational internal control system can improve the efficiency of operation; prevent the loss of funds, so that the daily business activities operate normally and orderly. For that, the demand of internal control gradually strong. And a set of guidelines on internal control mode for their own development condition urgently need to find.This paper takes JW as the object of the research, selecting the part of the purchasing-to-payment cycle to study. It does the depth analysis on the purchasing-to-payment cycle of the internal control, based on advanced internal control theory and Standards for enterprise internal control issued by the Ministry of Finance, the Securities and Futures Commission, the Audit Commission, the CBRC and CIRC and related instructions, and then puts forward the main problems in the link, such as requisition system gaps, poor management of supplier selection, inadequate approval mechanism and poorly implemented, weakness in acceptance inspection, lack of procurement budget management and price review mechanism, lax management of accounts payable, neglected track management of the non-stock, no return policy and lack of internal control supervision system, etc. On this basis, combined with the related charts and data, started from the JW’s own characteristics and demand, this paper improved the purchasing-to-payment cycle of the internal control system under the control objectives, and established a set of internal supervision system to enable enterprises to better adapt to environmental changes.This article begins with a brief description of the background and significance of the research, provides an overview of the main content of the article and the framework, and elaborates the research method, innovation points and insufficiency of this paper. Then it introduces the basic present situation of the purchasing-to-payment cycle of internal control of JW, including: purchase requisition, supplier selection and management, contract approval, acceptance of storage, financial records and payment and so on. It also evaluates the current situation of the purchasing-to-payment cycle of internal control, points out the problems and deficiencies of those links, and describes the possible consequences of these problems and deficiencies. After that, this paper take a set of measures to optimizes and improves the purchasing-to-payment cycle of internal control of JW, including: organization structure optimization procurement system clarification and the establishment of the internal supervision system, which clarifies each and every employee’s duty, makes the purchase scientific and rational, avoids the regulatory loopholes in the procurement business and recognizes risk better to make the internal control able to repair and improve itself continuously. These measures cover the improvement of the organizational structure, which include new departments, segmentation, establishing responsibility specifications for purchasing department; analysis the purchase process which includes the establishment of procurement budget management system; and the establishment of return policy and internal supervision system. All the measures enable the company to better avoid risks.This article not only establishes a suitable set of purchasing-to-payment cycle of internal control and internal supervision system for JW, but also has a certain reference value for our internal control system design and build.