Research On Internal Control Of Inventory Management In Company E

Recent years have witnessed the global economic downturn and the stagnancy of China's manufacturing industry.Yet after a period of industrial adjustment and upgrading,it has gradually recovered from the recession.With the enhancement of people's awareness of environmental protection and their constant pursuit of life quality,consumers are posing increasing demands on high-quality and personalized household electrical appliances.The entire home appliance market has therefore entered into a new development stage,and is required to continuously develop and adjust new products to meet market needs.Opportunities and challenges coexist in the companies' entrepreneurial paths.Due to the particularity of the electronics industry,both the depreciation of assets caused by inventory backlogs and the occupation of funds resulted from excessive inventory would lead to an inappropriate utilization of the enterprises' limited resources,or even bring about the capital chain rupture.Internal control can significantly guarantee the effectiveness and efficiency of business operations and ensure the authenticity and rationality of corporate financial reports and the compliance with laws and regulations.Apart from the three prominent internal control objectives listed above by COSO,the internal control system is also responsible for protecting the security of corporate assets and providing a reliable guarantee for the achieving of corporate objectives.Internal control involves every aspect of corporate operation.With regards to the manufacturing companies,their internal control of inventory functions as the most paramount part.A sound internal inventory control system can not only ensure the safety of enterprise assets and minimize inventory loss and damage,but also reduce the operating costs,improve running efficiency,and strengthen its core competitiveness and sustainable development capacity.This study takes Company E,a manufacturer of household electrical appliance parts,as the research object,which is rich in inventory and complicated in production processes.Based on the theories related to inventory internal control as well as the industry characteristics and the actual production process,this paper elaborates the current inventory status and analyzes comprehensively and systematically the existing problems in inventory management from the following aspects: inventory acquisition,inspection,acceptance,storage and issuance.The root causes of these problems are explored from the perspective of internal control.And with that foundation,the critical risk control points in inventory management process are found,followed by the optimizing of inventory management business process and the proposing of safeguard measures to improve and implement inventory management internal control.The first chapter introduces the study object,research background,significance,methods,and contents,where the inventory management under the framework of internal control is the theoretical basis.The second chapter investigates the status quo and existing problems of the company's inventory management internal control,and conducts a specific case analysis which starts from the basic situation of Company E and then probes into the current conditions and problems in its processes of storage inspection,storage,stock removal,and check.The third chapter,according to previous analysis,manages to dig out the crucial causes behind the problems.And in the fourth chapter,detailed optimization suggestions and safeguard measures that are directed at the key links with some problems in the inventory management process are put forward.