Research On Optimization Of R Coffee’s Internal Control From The Perspective Of Financial Fraud

In recent years,financial fraud incidents have been repeatedly prohibited and recurred in China,not only causing negative impacts on the enterprise itself,damaging the image of the enterprise,but also disrupting the climate of the capital market.Preventing financial fraud has been a concern of corporate stakeholders.By analyzing companies that engage in financial fraud,scholars have found that the common problem is that internal control fails to a certain extent,providing an opportunity for the occurrence of financial fraud.Internal control is the core of a company’s internal supervision and governance mechanism,and how to prevent,identify,and manage financial fraud is an urgent issue to be addressed.As a representative enterprise of financial fraud in recent years,R Coffee has attracted worldwide attention.The research on it is typical and has certain reference value for other enterprises.In addition,the business model adopted by R Coffee is a new retail model,with internal controls updated compared to other enterprises.Based on the actual situation of the R coffee case and advanced foreign theories,this article analyzes the problems in its internal control from the perspective of financial fraud,analyzes the specific reasons for the problems,and targeted solutions can promote the optimization of enterprise internal control,improve and supplement the internal control system,and promote the healthy development of China’s economic system.This article mainly adopts literature research,theoretical analysis,and case study methods,combined with COSO internal control theory,principal-agent theory,and fraud triangle theory,to study the financial fraud incident of R Coffee and draw the final conclusion.Firstly,it analyzes the literature on internal control and financial fraud both domestically and internationally,then elaborates on the concept and elements of internal control,introduces the theoretical basis of internal control,and briefly introduces R Coffee,including its company’s business model,financial fraud event process,and the methods used.From the analysis of the five elements of internal control,it is found that the current situation of internal control is relatively poor and has not played its due role.To address the above issues,an internal control optimization plan has been proposed based on the actual situation of R Coffee,which includes optimizing the internal environment,strengthening risk assessment,improving information and communication,and improving the supervision system at the company level.At the business level,optimization has been carried out in various aspects such as budget,procurement,payment,sales,and revenue.The corresponding guarantee measures for the implementation of the internal control optimization plan have been elaborated.This article focuses on the current situation of internal control in R Coffee,But the proposed plan is also applicable to other companies,to some extent,to prevent similar fraud incidents from happening again.