EVALUATION OF INTERNAL CONTROL ON EXPENDITURE CYCLE AT PT. MEDIA TELEKOMUNIKASI MANDIRI

Abstract

This study intends to observe and examine of a growing telecommunication consultant and IT service which also provides power installation service and consultation, focusing on the internal control of its expenditure cycle which requires a good system to support the growth of the company. Currently, it still uses manual operation. The writer would like investigate the exsisting prosedures of expenditure cycle used by the company and evaluate its internal control using COSO Frameworks. In this research, the writer uses qualitative method to collect the information related to the objectives. The writer gathers the primary data through inquiry the key roles in the operations in the expenditure cycle and observing the expenditure procedures by comparing with five components of COSO Frameworks. After analyzing all the information, the environment control of the study object indicates that the current organizational structure is not clearly defined the current possitions in the company; Some personnels are not having proper education background, knowledge or skills required for their positions; the company provides lack training for all categories of personnel. For risk assessment, division objectives have not been established and the company has not categorized risks into some levels. The company has lack of segregation of duties and lack of document duplication. Lack of periodicaly evaluating effectiveness of policies and procedures. Lack of periodicaly evaluating effectiveness of policies and procedures. However, due to the size of the company which is small, it is enable the company to have good communication and information. Hence, as the company business keeps growing, it is important to make improvement to eliminate the weakness. The reseacher recommends to the company to establish and communicate the job and responsibilities clearly, hire employee selectively, provide training for the staff, established and communicate the objectives that have to be achieved by every staff, identify fraud risk due to a lack of segregation of duties, minimize of losing document by duplicating the documents, and conduct periodic evaluation on effectiveness of policies and procedures