Operational Audits on Goods Purchase and Payment of Debt

Meiryani

, Julian Sutiono

, Jajat Sudrajat

and Zaidi Mat Daud

Accounting Department, Faculty of Economics and Communication, Bina Nusantara University, Jakarta, 11480,

Indonesia

BINUS Entrepreneurship Center, Management Department, BINUS Business School Undergraduate Program,

Bina Nusantara University, Jakarta, 11480, Indonesia

Accounting Department, Faculty of Economics and Business, Universiti Putra Malaysia, Malaysia

Keywords: Operational Audit, Purchase, Goods, Debt Payments.

Abstract: The purpose of this research is to assess the performance of PT Serpong Cipta Kreasi especially in the process

of purchasing goods and paying debts, whether the process has been running effectively, efficiently, and

economically. The method of data collection is done by means of interviews and questionnaires given to

parties related to the process of purchasing goods and payment of debts. From this research it can be seen that

the company still has some shortcomings in the activities of purchasing goods and debt payments such as,

there are still advantages and disadvantages of stock of goods, goods received are not in accordance with the

orders, fictitious suppliers, and delays in paying debts.

1 INTRODUCTION

In general, all companies, both small and large

companies, are required to be able to compete in this

fast-paced and modern era (Hall, 2011). Of course

every company must be able to achieve its goals, the

main goal of the company is to make a profit. There

are several activities that can affect the company’s

profit, these activities are the purchase of goods and

the payment of company debts (Agoes and Hoesada,

2012). In carrying out these activities, companies

generally require substantial operating and

investment funds (Agoes, 2012). Therefore, company

management must be able to design a plan so that

purchasing and paying debt activities can be carried

out efficiently and effectively (Arens, 2015). Good

company management can make the company make

useful purchases, and be able to pay debts on time

(Arens et al., 2011). Paying debts on time is very

important because delays in paying debts can cause

waste and create a bad image of the company. In order

for the entire implementation to run effectively and

efficiently, there are several efforts that company

management can make, one of which is by conducting

an Operational Audit (Arens, 2015). Operational

Audit aims to assess whether the company’s

operational activities have been carried out

effectively, efficiently and economically and provide

recommendations for improvement to management

(Susanto, 2013). Identification of problems in this

thesis are:

• Has the purchase and payment of debt at PT

Serpong Cipta Kreasi run effectively, efficiently

and economically?

• What weaknesses occur in the purchase and

payment of debt activities?

• What steps are taken by PT Serpong Cipta

Kreasi in dealing with problems that arise in the

purchase and payment of debt? The objectives

to be achieved in this research are:

• To find out the process of purchasing and paying

debts at PT Serpong Cipta Kreasi.

• To find out whether the implementation of the

Operational Audit in the activities of purchasing

and paying debts at PT Serpong Cipta Kreasi has

been running effectively and efficiently.

• To provide suggestions and recommendations if

there are weaknesses in the existing systems and

procedures at PT Serpong Cipta Kreasi.

• For the Company. As an input that is used to

improve the weaknesses that exist in purchasing

and paying debt activities, so that the company

can prevent these weaknesses in the future.

• For the author. By conducting this research, it is

expected to increase the knowledge and insight

Meiryani, ., Sutiono, J., Sudrajat, J. and Mat Daud, Z.

Operational Audits on Goods Purchase and Payment of Debt.

DOI: 10.5220/0011242900003376

In Proceedings of the 2nd International Conference on Recent Innovations (ICRI 2021), pages 193-197

ISBN: 978-989-758-602-6

193

of the author and how to apply the theories that

have been studied during lectures, regarding

operational audits of the purchase and debt

payment process.

• For Readers. The results of this study are

expected to provide new information and

knowledge about operational audits of debt

purchases and payments.

2 RESEARCH METHODOLOGY

In preparing this thesis the writer uses qualitative

methods. The ways in which the authors collect data

and information are as follows:

• Library Research. In conducting this research

the writer reads and studies books and other

reference materials related to the research

discussed in this thesis.

• Field Research. The author also conducts direct

visits to the field to obtain information and data

needed in this study. The following are some of

the techniques used:

• Observation. The author directly observes the

activities of purchasing and paying debt so that

the author can understand well and obtain

accurate information.

• Interview. The author conducts interviews with

the parties concerned by having prepared the

right questions in order to obtain information

about the problem under study.

• Documentation. The author collects data in

ways such as observing, studying, and

investigating documents that are sources of

information relating to purchases and debt

payments.

• Questionnaire. The author makes a list of

questions related to purchasing and paying debt

activities and their controls which will be filled

in by the parties concerned.

3 RESULT AND DISCUSSION

At this stage, the authors evaluate the company’s

internal control by providing a questionnaire filled in

by the relevant department in order to better

understand the data obtained. The questionnaire

given relates to the purchase and payment of debt at

PT Serpong Cipta Kreasi as well as objective

questions that have short answers in the form of

”Yes” and ”No”. The list of questions is as follows:

3.1 Accounts Payable Table

Based on the results of the questionnaire questions,

we can conclude the overall internal control of PT

Serpong Cipta Kreasi. PT Serpong Cipta Kreasi

already has good internal control in purchasing and

paying debt, this can be concluded from the results of

the questionnaire answers. Although overall the

company already has good internal controls, there are

still advantages and disadvantages as follows:

• The company already has clear and written

policies and procedures related to purchasing

goods and paying debts.

• There is already a clear and equitable division of

duties, so that no more one person does two jobs

at once.

• There is prior authorization in order to reduce

the occurrence of errors.

• There are completeness of each required

document related to the purchase and payment

of debt.

• The company has a procedure for selecting

suppliers, so that purchases can run efficiently

and effectively.

• The company will repay the debt that has been

settled, thus avoiding double payments.

• The company evaluates every activity carried

out to get improvements if there are errors.

Besides having these advantages, of course the

company also has several weaknesses such as:

• The company carries out purchasing activities

not in accordance with applicable procedures

due to sudden or urgent purchases. This makes

it ineffective and economical.

• There is still a piling up of excess inventory.

• There are no sanctions given if there is a delay

in receiving the goods.

• There is no minimum stock implementation in

purchasing activities.

• The company is still experiencing delays in

paying debt due to the absence of an authorized

official to carry out the authorization.

3.2 Audit Findings from the Results of

Examination of Goods Purchasing

Activities and Debt Payment

This stage is the final stage in conducting an

operational audit. At this stage the author will

evaluate and analyze the results of questionnaires,

observations, and direct interviews that have been

carried out in the process of operational purchases

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and debt repayments made by PT Serpong Cipta

Kreasi, and also to assess the results of the company’s

internal control whether it is running well. right.

Judging from the results of the evaluation that has

been done, the authors found that there are findings in

the company’s internal control. From these findings,

it will be described in several audit findings

consisting of company weaknesses that were found,

the causes of these weaknesses, the impact arising

from these weaknesses that are felt by the company

and other interested parties, and provide

recommendations in the form of suggestions or

improvements. that can be done by the company to

prevent and reduce existing weaknesses, so that they

do not happen again in the future. Some of these

findings are as follows:

3.2.1 There Is a Process of Purchasing

Goods with a Direct Point System

The purchase process is carried out by direct

appointment at a sudden situation. What is meant by

direct appointment is, the company directly appoints

one supplier without making comparisons with other

suppliers. The purchasing process should have

followed the existing rules, namely by comparing

several suppliers first, and generally the ones chosen

are those who are able to provide good prices and

quality, this is done especially if you are going to

make purchases in large quantities.

This direct pointing system occurs because the

company does not have an adequate inventory

estimate and does not have careful planning, so that

when the inventory runs out, the company must make

direct appointments so that the stock of goods in the

company is fulfilled. By implementing this direct

pointing system, the company actually suffers a loss

because the price of the goods purchased is higher

than the market price because the company does not

have time to negotiate the price. In addition to prices

that may be higher than the market, the quality of

these goods is not necessarily what the company

wants, this is all because the purchases are made in a

hurry so there is no time to test the quality of the

goods.

To prevent this from happening again, the party

who will make the purchase should make estimates

and careful planning before submitting a purchase

request to the purchasing department. The competent

authorities should also routinely check the items to be

purchased whether the number of orders is in

accordance with the needs.

3.2.2 The Existence of Excess and Lack of

Inventory

There are items that have been ordered but have piled

up in the warehouse and are unused, this is due to

excess orders so that the goods are not used. But

companies also often experience shortages of

inventory.

The goods that have been ordered should not be

piled up in the warehouse, or even become unused.

Should all these items be used sufficiently then an

estimate will be made of the number of items to be

purchased to meet the needs of each part. The stock

of goods in the warehouse cannot be empty either.

Cases such as shortages of goods occur because

the company has not implemented a minimum stock

system at the time of purchasing goods. When going

to buy goods, only based on an estimate of how many

items to buy, so there will be excess inventory.

The accumulation of goods can cause the

company to suffer losses, because the goods that have

been piled up can no longer be used. From this case,

it can be concluded that the purchasing activity has

not been running effectively and economically.

To prevent shortages of inventory, the company

should apply a minimum stock. The department head

who will ask for the purchase process should also do

an evaluation so that the purchase is in accordance

with the needs so that there is no excess purchase.

3.2.3 Found a Fictitious Supplier

There were findings that a purchase transaction was

made with a fictitious supplier, when it was checked

it turned out that the address or contact that could be

contacted was incorrect. The impact is that the

company becomes difficult to ask for information or

when it requires maintenance of the items purchased.

Goods purchase transactions should be carried out

with clear suppliers so that the quality of the goods is

maintained and the company is easy when they want

to carry out maintenance of the items purchased. The

existence of this fictitious supplier is because the

company only carries out supplier maintenance once

a year, and the company does not check in more detail

on supplier information when it is about to carry out

the purchase process

The disadvantage for the company with this

fictitious supplier is that the company may get a price

that is higher than the market price and the quality of

the goods is not suitable, if this happens then the

company will return the goods and of course this will

take a long time. So that the process of purchasing

goods runs ineffectively.

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195

PT Serpong Cipta Kreasi has to make changes in

its supplier maintenance, which was originally only

done once a year. Supplier maintenance should be

carried out at least twice a year. That way the

company can always be updated about the status of

the supplier and the company’s relationship with the

supplier is getting better. Then when going into the

buying process, the company should check the

supplier starting from the appropriate address and

contact number.

3.2.4 The Goods Received Are Different

from the Goods Ordered

After placing an order for goods, sometimes the

goods that arrive do not match what was ordered from

the supplier. The goods that arrive should match what

has been ordered, so that there will be no return of

goods to the supplier.

The mismatch of goods that arrive occurs due to

lack of checking when the goods arrive, when the

goods arrive, they are only received by the warehouse

department but not accompanied by the department

who ordered the goods. The warehouse department

cannot ensure that the goods arrived in accordance

with the goods ordered.

Cases like this can affect the performance of a part

of the company, especially the parts that really need

the goods. If there is an error in receiving such goods,

then the goods must be returned to the supplier, and it

will take a long time for the appropriate goods to be

sent back by the supplier. Of course this process is

very ineffective and inefficient.

When the process of receiving the goods takes

place, the warehouse department must be

accompanied by the person who ordered the item, so

that it can help check whether the item that arrived is

in accordance with the order. If it turns out that the

item that arrived is wrong, you can immediately

return it to the supplier. It would be even better if

when ordering goods the company confirms with the

supplier.

3.2.5 Payment of Debts to Suppliers Is Late

Based on existing audit findings, it is known that the

company was late in paying its debts. Based on the

provisions, debt payments should be made before the

due date. In the debt repayment process, the finance

department cannot immediately make payment

transactions, because the authorized official must first

sign the current account that will be used.

But sometimes the authorities are not in the office

or on duty outside the city. If this happens it will take

longer because the finance department has to ask for

the signature of another competent authority whose

position is higher.

Delays in paying debts can create a bad company

image in the eyes of suppliers, so that suppliers are

hesitant if they want to extend their cooperation with

the company. To prevent delays in paying debts, the

authorized official should check the due date then set

a schedule for signatures on the current accounts to

be paid.

4 CONCLUSION AND

SUGGESTION

4.1 Conclusion

After conducting an operational audit of the activities

of purchasing goods and paying debt at PT Serpong

Cipta Kreasi, it can be concluded that the activities of

purchasing goods and paying debt are sufficient, but

there are still some weaknesses in the company.

These weaknesses are:

• In purchasing activities, sometimes it is not in

accordance with the applicable procedures. As

with the direct point purchase method, this

direct point method is carried out if it is an

urgent or important condition. It should be in

accordance with the applicable procedures, the

purchasing department should make a

comparison of several suppliers first, but this

direct point method does not make a supplier

comparison first and immediately appoints one

supplier as a supplier.

• There are still shortages and excess inventory of

goods. This is because the company does not

apply the minimum stock method and does not

make careful purchase plans. Of course, this

weakness can hurt the company from an

economic point of view.

• There is a fictitious supplier in the purchase of

goods. This happens because of the lack of

supplier maintenance carried out by the

company and not doing a more detailed check

on the supplier before making a transaction with

that supplier.

• The goods that came do not match what was

ordered. This can happen because when the

goods are received, the warehouse department is

often not accompanied by the part that ordered

the goods, so the warehouse department cannot

fully ensure that the goods that arrive are exactly

what they ordered.

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• There is a delay in payment of debt. The late

payment of this debt is due to the absence of an

authorized official to sign the current account

used for debt repayment.

4.2 Suggestion

Based on these findings, the author will provide some

suggestions to PT Serpong Cipta Kreasi, especially in

the activities of purchasing goods and paying debt,

this suggestion is an improvement for the future, so

that it is expected to minimize the occurrence of

errors in the future. The following suggestions are

given:

• The company must use the minimum stock

method, and the part that will make the purchase

must estimate the goods to be purchased so that

there is no accumulation of goods and shortages

of stock. How to calculate the minimum stock

can be by using the average with the lead time

for the fulfillment of goods, for example, item A

is used on average as many as 5 pcs or 5 pcs /

day, and the lead time starts from purchase

request to arriving at the warehouse on average.

time of 10 days. Then the minimum stock = 5

pcs x 10 days = 50 pcs.

• The company should carry out supplier

maintenance at least twice a year, so that the

company will get the latest information from the

supplier and the relationship with the supplier

will be better. The company must also provide

sanctions if an employee is involved in a

fictitious supplier. If a purchase occurs outside

the supplier list, verification and checking must

be done first.

• The procedure related to the receipt of goods

must be in accordance with the procedure,

namely, when receiving goods, the warehouse

department must be accompanied by the

department who ordered the goods, in order to

ensure that the goods arrived are as ordered.

• The authorized official in charge of signing the

current accounts must have a schedule for

signing the demand deposits so that the debt

payment process can be carried out before the

due date. The finance department must also

make a schedule for requesting signatures, for

example, at the beginning of each month, they

ask the competent authority to sign the current

account to be used.

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