How to Manage Internal Control in Small and Medium Industries (Empirical Study in Magelang District, Central Java Province, Indonesia

Abstract

The objectives of the research are to determine that internal control and business strategy being the important things in small medium industries. Many SMI being collapse because of many factors, it can be from their internal control, business strategy, limitation of fund, and also human resources. This research is trying to identify what is the main problem happen in small and medium industries. What is the regulation of internal control system in the SMI. The method of the research are survey by using accidental sampling technique and also focus group discussion to 100 SMI in Magelang. There are 5 research indicators: control environment, risk assessment, control activity, information and communication, and monitoring activity. The finding of research are 1) The main problem of SMI is human resources, 2) Many factors also make a problem in SMI like target market and business strategy, 3) all of SMI have their own system to control them, 4) many SMI collaborate in order to achieve customer's want.