Evaluation of Internal Control Over Financial Reporting on Inventory Management: A Case Study on Inventory Management at National Human Right Commission

摘要

The purpose of this study is to assess the effectiveness and propose improvements on internal control over inventory management that can improve accountability of financial reporting in the National Commission on Human Rights. This research uses qualitative research methods and case study approach with the National Human Rights Commission as the unit of analysis. The results show that internal control over inventory management has not been effective. There are some risks that the controls are inadequate, which could potentially lead to material misstatement in the financial statements. This study found the storage and reporting processes in the inventory warehouse inadequate, unclear and incomplete standard operating procedures in the inventory warehouse, the Chart of Account is poorly understood and the inventory purchase document is invalid. This research suggests the creation of warehouse reporting mechanisms, hiring warehouse personnel, improvements to standard operating procedures in inventory warehouses, socializing the Chart of Account and establishing standard operating procedures for the preparation of inventory purchasing documents.