Analysis of the Internal Control System for Cash Receipts and Disbursements in Cash Sales & Purchases at PT XYZ

Abstract

This study aims to analyze the internal control system for cash receipts and disbursements in cash sales and purchases at PT XYZ. The background of this study is based on problems in inaccurate cash transaction recording, incomplete transaction evidence, and the absence of clear standard operating procedures (SOPs), which have the potential to lead to errors and fraud. The method used in this study is a qualitative method with a descriptive approach. Data were collected through interviews, documentation, and observations of the cash receipt and disbursement process at the company. The results of the study indicate that there is still a duplication of functions between the cash and accounting departments and there are no surprise checks on cash. On the cash disbursement side, although authorization and supporting documents have been implemented properly, control practices are still weak. Furthermore, the absence of written SOPs and job descriptions can worsen the effectiveness of the company's internal control. The conclusion of this study is that the internal control system for cash receipts and disbursements for cash sales and purchases at PT XYZ cannot be said to be effective. Therefore, it is recommended that PT XYZ immediately develop and implement SOPs, separate important functions in the cash cycle, and implement job rotation to minimize the risk of fraud and improve the efficiency of financial management. Keywords: internal control, cash receipts, cash disbursements, cash sales, cash purchases, accounting system