Discussion On Internal Audit Of Material Purchase Business Of M Company In Home Appliance Industry

In recent years,the home appliance industry has witnessed rapid development,and many Chinese home appliance companies are operating and competing in the domestic market in China.At the same time,many foreign home appliance brands have noticed the huge potential of China’s home appliance market,so they decide to explore the market in China,which increases the fierce competition in the home appliance industry in China.In other words,home appliance companies need to compete with both domestic brands as well as foreign brands.In order to gain advantages in the competition and attract the loyalty of customers,the management of home appliance companies have adopted various measures to distinguish themselves from other brands by investing in the development of production technologies,increasing capital investment,introducing high-tech talents to improve the quality of products by means of scientific research and development,reduce the production cost,and highlight the characteristics of products.As the source business of production-oriented enterprises,material procurement has been attached with top priority,which includes all the processes of dealing with goods,technology,information,and services between suppliers and demanders,during which human,material and financial resources would be invested and exploited.The issue of strengthening the internal audit of the material procurement business in household appliance industry enterprises and analyzing the problems and causes of the internal audit of the material procurement business is of vital significance to complete the internal audit system of the material procurement business and improve the quality of material procurement business.Based on the literature review on the internal audit of material procurement business,this paper expounds the meaning,objectives,characteristics and basic procedures of the internal audit of the material procurement business.Based on the internal control theory,risk management theory,internal audit quality control theory,this research analyses the internal auditing activities of the material procurement business of M company.This research summarises the problems existing in the internal auditing process of the material procurement activities and analyses the causes.Finally,the specific countermeasures are put forward to assist the internal auditing of the material procurement business in the household appliance industry.This paper takes M company as an example.On the basis of reviewing the internal auditing theory of material procurement business,this paper conducts a comprehensive analysis of the internal auditing of material procurement business of M company by summarizing problems and proposing corresponding countermeasures.There are six sections in this paper.The first part is the introduction,which introduces the research background and significance of this paper,explains the importance of the internal auditing of material procurement business to the enterprise.The first section also summarizes the theoretical research on the internal auditing of material procurement business and clarifies the research ideas and methods to outline the basic framework of the paper.The second part is the theoretical overview,mainly including the Internal Control theory,Risk Management theory,and Internal Audit Quality Control theory.Meanwhile,the internal audit characteristics of material procurement business and the basic procedures of material procurement business internal audit are illustrated.The third part takes M company as an example to briefly explain the company’s basic situations,the internal audit environment and organizational members of the material procurement business,and the internal audit content of the company’s material procurement business.This section also highlights some problems existing in the internal audit of the company’s material procurement business,including the design of the internal audit supervision process of the material procurement business,the appointment of the internal auditors of the material procurement business,the incomplete internal audit plan of the material procurement business,the lack of professional competence of the internal auditors of the material procurement business,and the unclear internal audit results of the material procurement business audit results.The fourth part analyses the problems existing in the internal audit of M company’s material procurement business identified by the author,and proposes solutions for the problems.The main reason is that the internal audit mechanism of the company’s material procurement business is not perfect.Specifically speaking,the internal audit system of the material procurement business is too simple,and the company also ignores the emphasis on the internal audit supervision of the material procurement business.As for the internal audit of the material procurement business,it is not independent in terms of the organisation,financial management and resource management.The content of the internal audit of the company’s material procurement business is not comprehensive.Owing to defects in the internal control test of the material procurement business,the company does not pay attention to reviewing the qualifications of suppliers,and the material procurement business contract auditing also needs to be improved.The professional knowledge and qualifications of the internal auditors of the company’s material procurement business does not meet the job requirements.There is a lack of systematic recruitment standards in employing staffs for the internal auditing of the procurement business,and the lack of systematic training program also impairs the improvement of their professional capabilities.In addition,the company ignores the importance of follow-up audit in the internal audit system of the material procurement business with no specific guidelines and requirements.The fifth part combines theory with practice to propose solutions according to the causes of problems identified in the fourth part.Suggestions include the establishment and improvement of the internal audit system of material procurement business,enhancement of the independence of material procurement business internal audit,enrichment of the content of material procurement business internal audit.Improvements in the professional knowledge and qualifications of the internal auditors of the material procurement business are also important to fully utilize the follow-up audits in the internal audit,so as to improve the management level of the material procurement business of M Company and promote the improvement of its operational efficiency.The sixth part draws conclusions and enlightenment through the case analysis of M company.Based on the theoretical and practical analysis,this research concludes that the internal audit system of material procurement business of M company should be standardized,and the management level of enterprise procurement should be improved,all of which can contribute to the promotion of the sustainable development of the organization.