THE ANALYSIS OF INTERNAL CONTROL ON SHARES INVESTMENT IN PT ABC

Abstract

The efficiency of an insurance company’s performance, the reinforcement of its competitive position in the market, the growth of its market value mainly rely on the level of the insurance company’s investment activity. PT ABC, as a State Owned Enterprise engaged in the field of social insurance, is one of the biggest insurance company in Indonesia, which has the obligation to underwrite the set risks of participants. In order to fulfill this obligation, PT ABC should be able to manage their finances well, one of which is by invest the funds from participants before being used to pay obligations. In the process of investment (especially in shares), there are several objectives that have to be achieved. They are get the maximum profit in accordance with the rational level of risk, distribute the profit fairly to support services activities, and maintain the economic stability of the nation. In terms of ensuring these four objectives to be properly accomplished, PT ABC has to implement a good and appropriate internal control system on shares investment. The scoped covered by this research is to evaluate the internal control on shares investment that has already implemented in PT ABC. The research method used in this evaluation is qualitative method with verification approach. Meanwhile, the necessary primary data of this research is collected through field research, and afterward the data is analyzed in accordance with appropriate literature review. As a result of the research, it is founded that PT ABC’ internal control on shares investment which is implemented in PT ABC is performed well. PT ABC already has a good accounting control to safeguard assets especially on\ investment and to ensure the availability, reliability, and accuracy of that information. However, PT ABC still missed a good administrative control to carry out investment activities effectively and efficiently in accordance with applicable rules and regulations. The researcher has a notion that the company missed applicable rules and regulations which is bought high risk stock in LQ45 (blue chips) when the market price went down. Although, PT ABC aims to maintain the country's economic stability, but in the future PT ABC better be careful in placing shares investments because they manage public money.