THE EVALUATION OF INTERNAL CONTROL ON CASH MANAGEMENT (CASE STUDY: PT KP)

Abstract

Internal control is the process designed to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. The purpose of this thesis is to discuss about internal control, specifically in control environment and activity on PT KP’s cash management. In conducts this research, the writer uses qualitative method and also some procedures that can be used to collect the data. As a like do an audit, the data is collected and processed through audit procedure. The audit procedures used in the research are inquiry of the client, observation, and documentation. The thesis results show that the implementation of internal control on cash management. Based on the negative findings, the writer finds that the company does not have written Standard Operating Procedures (SOP), job descriptions, a policy regarding the rotation of its employees, there are paper documents stacking on the desk, does not prepare cash flow budget, the documents (forms) used in the company has not been printed in pre-number, and Head of Accounting Department does not do physical examination on cash balance periodically and suddenly. The study purposes some recommendation to overcome the absence of control which are: create Standard Operating Procedure (SOP), set up written job description, set up the rotation of its employees, file the documents properly, prepare budget of cash, train its employees, add some employees for Accounting and Finance Department, do physical examination on cash balance, and all documents should have be pre-numbered.