The Implementation of Accounting System on Raw Material to Support Internal Control

Tiara Handicraft Company is one of the Small and Medium Enterprises (SMEs) which is already established more than 15 years. Tiara Handicraft Company was built in Surabaya in 1995, having 38 people working in this company. Tiara Handicraft Company is a company that does not only concern in business, but also in social (disability), because most of their employees are persons with disability. Tiara Handicraft Company must apply the implementation of raw materials accounting system well and adequately. Tiara Handicraft Company is the Small and Medium Enterprises (SMEs) which is have a high demand in their product. By applying a good system, the company can conduct supervision, control, and activity plan which is associated with raw materials supply. Therefore, it makes the accounting system in Tiara Handicraft is unstructured. In order to identify the key success in business operations of the company, this research is dedicated to describe the implementation of accounting system of raw materials in order to support the internal control that has been applied by Tiara Handicraft. The method used in this research is qualitative by using case study. The research focus comprises of organizational structure of work through the division of authority and responsibility that has been applied to the company, raw material inventory accounting system set out in the procedures that make up the networks accounting system and the way internal control supports the effectiveness of supplies of raw materials. The data collection method included interview, observation and documentation. Based on research results, the implementation of accounting systems on raw materials in Tiara Handicraft has been consistent with the objectives of internal control, although there are shortcomings such as the dual function in a several department, recording every transaction into the accounting records made after payment and process order. Therefore it can be suggested to improve their record-keeping procedures, and improving organizational systems in order to improve the internal control in the company