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Inventory accounts are accounts that are complex and require a strong control by several reasons. First, inventory is one of the main part of the balance sheet and is often the largest estimates that involve working capital. Then, inventory is often scattered in several locations also complicate the calculation and physical control. The assessment was made difficult by the obsolescence factor and the need to allocate manufacturing costs to inventory.
Inventories for manufacturing companies is a very material item because most of its working capital used to produce the inventory. For companies that have a warehouse inventories in several places and has an inventory of consigned goods, allowing the occurrence of fraud if the internal control of inventories owned companies can not prevent it.
Given the magnitude of risk that can arise in the inventory system so companies try to design an effective internal control within the inventory system. Internal control which is created within the company is very important for companies whose financial statements must be audited by public accountants. This internal control in addition to affecting the reliability of the information will also affect the scope of substantive testing is highly dependent on the internal control designed and implemented by the client. In addition to an effective control structure will greatly affect the risk controls that must be applied by auditors in auditing financial statements of the client and the amount of evidence that must be collected and procedures for substantive testing of client inventory balances.
Risk control can only be determined if the auditors have sufficient understanding of clients’ internal control structure, this risk is determined to provide guidance on the effectiveness of internal control structure. An effective control structure will affect the reliability of financial reporting. In such a complex system of inventory to make auditors in implementing control structures so that risk can control as precisely as possible and to influence the type of tests to be performed.

Past financial information company that is expressed in units of currency as well as useful for decision-makers from both inside and outside the company. In the financial statements, management is accountable for the resources entrusted to them. The management company must provide an accountable financial statements. Accountability is one of the principles of Good Corporate Governance. Characteristic accountability of financial reporting is an important aspect in achieving good corporate governance itself. The higher the awareness about the need for sound corporate governance is part of a response to a number of large corporate failures. Awareness of Good Corporate Governance as well as changing perceptions about the relationship between one company and its stakeholders. It is not enough just to evaluate the success of a company with only associate with its historical financial performance with an increase in stakeholder value only. At this time, the more important considering how good corporate governance is applied. Meanwhile, the implementation of good corporate governance can be realized by keeping the basic principles of corporate governance that reflects the principles of transparency, responsibility, accountability and fairness. One of the indicators used in determining the position of an enterprise in the implementation of Good Corporate Governance is the eligibility of a company’s financial statements. The financial statements communicate a useful information for investors and creditors and other users to make decisions. The financial statements communicate information relating to the interests of creditors and investors to assess the borrower’s cash receipts from investments to the company. The financial statements also convey useful information for determining the prospects for the company’s cash flow. Corporate management has primary responsibility for preparing and presenting financial statements of the company. The financial statements have been prepared with the aim to provide information concerning the financial position, performance and changes in financial position of a company that would benefit a large number of users in making economic decisions. In addition to these objectives, the financial report also shows what has been done stewardship or describe the management accountability for the resources entrusted to him. The problems contained in the financial management aspects of the company by management is the issue of accountability to stakeholders. Accountability is necessary to know the implementation of management programs, which will be reviewed from the aspect of obedience to the rules, efficiency and effectiveness. No less important is that accountability is one of the main principles observed by the implementation of Good Corporate Governance. Application of practices of good corporate governance will create an effective internal incentives for company management and the efficient use of resources so that investors’ confidence and encourage the formation of capital inflow that encourage economic recovery both in macro and micro.

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Fulfilling the need of funds to finance the operational activities of the company can be reached by the various efforts. One effort that can be done is to sell shares to the public through the capital market.
In addition to the capital market is a means to deliver public funds outside the banking, capital markets also represents a significant potential source of funding for companies who need long-term funds, while for the community, capital markets can be an alternative to investing, because the capital market is the mediator who brings between communities that have excess funds to further act as an investor, with those in need of funds that the company made an initial public offering (IPO) or an initial public offering to the public before the company became a public company (went public).
IPO is a way for emerging companies to obtain additional funds in order to finance or business development such as debt repayment, expansion of its business, as well as to strengthen the company’s capital structure. That funds obtained from the IPO as expected, then the offered shares at the IPO should be maximally absorbed by investors. Investors will respond well if the company shows good prospects for the future. This is indicated from the information obtained from the company, both accounting and non accounting information which shows that the company is experiencing growth. Information is a fact, observation, perception and increase knowledge. Information necessary for investors to reduce uncertainty in making investment decisions. The capital owners who need information that can potentially provide a direct contribution in determining the various alternative actions that could be taken into consideration in planning, control and decision making. If the company’s performance look good which is reflected in the accounting and non accounting information published at the time of the IPO, so investors will respond by buying shares on offer.
At the company’s IPO which took place in the primary market, there is no market price of the stock until the commencement of sales in the secondary market. At the time of the general investors have limited information as disclosed in the prospectus. Thus, investors who want to invest their capital only has information about the company is informed to the extent that such prospectus. Prospectus is a required report to the company that wants to listing in the stock market, which contains an overview of the company that contains a complete and honest description of a state company and its prospects in the future and contain the information required in connection with a public offering.
In the process of initial public offerings, issuers require the involvement of the underwriter as an intermediary in the sale of shares by investors. Shares in an initial offering price is determined by agreement between the companies listed with the underwriter, while prices in the secondary market is determined by market mechanisms or the demand and supply. Important problems faced by the issuer at the time of initial public offering price is the closing of the offering. Meanwhile, as a party in need of funds, issuers want high prices. On the other hand, high prices will affect the response of potential investors to buy shares offered. Conversely, the underwriter seeks to minimize the risk of bear.
Type the guarantee is generally accepted is a full commitment, whereby the underwriters will purchase shares that are not sold out during the initial offering. This situation makes the underwriter seeks to minimize the risk by conducting negotiations with the issuer to price the shares are not too high, and even tends to underprice. Shares in an initial offering price is relatively low, due to information asymmetry in the primary market. This asymmetry of information can occur between companies with corporate issuers or guarantors of the informed to the uninformed investors. For this reason that caused the issuance of shares of common offering or IPO underpricing phenomenon. Underpricing is a state where the stock price at the time of the initial offering is lower than when the secondary market trading. Underpricing can also be interpreted as a positive difference between the secondary market stock price stock price in the primary market at the time of the IPO. Difference in price is what we know in terms of initial returns or positive returns for investors.
The financial statements are one source of information used by investors/potential investors, and underwriters to assess the companies that will do an IPO. To be more reliable financial statements, the financial statements must be audited. Audited financial report will provide a greater level of confidence to the wearer. The presence of reliable financial statements users, will reduce the occurrence of asymmetric information.

Capital structure or financing decisions will greatly affect the performance of the company. The decision whether the funds will be used by companies with debt or with the sale of shares will greatly affect the performance of particular companies in order to maximize the wealth or the wealth of the shareholders or owners of which will be reflected through the company’s stock price. Thus companies need to seek an optimal balance in using both sources so as to maximize the value of the company.
The Company aims to maximize the welfare of the owners through a decision or investment policy, financing decisions and dividend decisions are reflected in stock prices in the capital market, so when viewed by the financial management perspective. This objective is often translated as an attempt to maximize shareholder value. In achieving this goal, many shareholders that the company handed over the management to professionals responsible for managing the company, called the manager. The managers appointed by shareholders are expected to act on behalf of such shareholder, namely to maximize shareholder value of the company so that prosperity would be achieved.
The managers in running the company’s operations, are often not maximizing shareholder actions, but rather tempted to improve their own welfare. This condition will result in the emergence of differences of interest between shareholders with external managers. Conflicts caused by the separation between ownership and management functions in financial theory called Agency conflik.
Increasing managerial ownership can be used as a way to reduce agency conflict. Company increased managerial ownership to align the position of managers with shareholders, so act in accordance with the wishes of shareholders. With increasing percentage of ownership, managers are motivated to improve performance and enhance prosperity responsible shareholders. On the spread of ownership, agency problems occur between management and shareholders. This causes the power of shareholders and submit it to the manager. As a consequence, the manager demanded higher compensation thus increasing agency costs. In this case, the agency conflict be overcome by increasing managerial ownership. Instead of concentrating the ownership of the agency problem caused by the relationship between shareholders and creditors.
Increased dividend is expected to reduce agency costs. This is due to which the dividend is a major cause of retained earnings ratio is small so that the company will require additional funding from external sources, such as issuance of new shares. Additions to the fund manager’s performance is monitored by causing the exchange and provision of new funds. Performance monitoring cause managers to act in accordance with the interests of shareholders and hence reducing the costs associated with the issuance of new shares (floating cost).

The development of today’s business world, are experiencing tough competition that can not be dielakan again, competition between firms with one other company. With a condition that occurs in this not infrequently also resulted in the destruction of the company because it can not compete with other companies.
In such a developmental stage company implementing complex production processes with the aim to maintain quality goods so that goods produced will affect the expected quality of the consumer, we need a tool that controls the internal control.
Instrument control is the internal control system which is an activity in maintaining and protecting the company’s property in order to avoid waste, fraud, which can improve working efficiency.
Quality is an asset of a company that is abstract, then the internal control system quality can be defined as a system to maintain the quality of a product that can meet a requirement of quality standards is a company goal to be achieved. One factor to consider is the raw material.
Raw materials are all materials that are part of the goods produced to establish a production process. So the cost of raw materials can be compressed so small, to reduce the bad quality. Raw materials issued by a company must seefesien probably why it is necessary for internal quality control system. Emphasis efficient raw material costs to help the management in supporting the continuity of the production process.
Own raw material costs represent costs incurred to acquire the raw materials that form part of overall finished product. Poor quality can also be started from raw material that is bad, ill-equipped labor and others. So will the lack of effectiveness and cost inefesiensi that will lead to waste and abuse cost of raw materials, it will not achieve the objective of the company.
By performing a quality control tool, a company will be ready to compete with other companies and selling their products on the market, so that corporate objectives will be achieved is a great benefit with little capital

The role of the brand is no longer merely as names or as a differentiator with competitors’ products, but has become a key factor to be a “trend setter” in the industry. Many companies are successful because it has the reputation of the brand, so it can open a distribution in some places by attracting targeted customers through brand strengths they have.
A brand that has achieved a high equity is a valuable asset for the company. For that purpose, maintain and enhance brand equity is not an easy job, because the face is customer expectations. Consumers will feel “familiar” with the brand name first entered the market, even brands that recently signed to perform better. This will lead to the creation of a greater loyalty to the brand and the manufacturer first. Customer loyalty becomes the key to success not only in the short term but sustainable competitive advantage.
Brands need to be perceived as high quality products, so consumers can understand a product only through the existence, function, image and quality. Quality in the eyes of consumers is more subyektiif, depending on how the perception of consumers towards the product.
When then the number of known consumer brand that more and more, then the role of the brand can be extended so as to provide certain associates inside consumers. A brand will often associated with the functions and special image. Value based brand is often based on specific associations related to it. Brand association with slogans sought, or desired position, or with the strategy of brand identity, which creates important attributes that consumers perceived as an ingredient.
Brand association reflects a brand’s imagery of a certain impression in relation to the habits, lifestyle, benefits, product attributes, geographical, price, competitors, and others.
Brands play a role as a perception that influence customer buying decisions. The value must be the foundation of strategy and tactics, because the value is the reason why consumers use the product and remain loyal. The value of a brand that is creating more and more customers are loyal, loyal customers is the goal of every marketer. Brand loyalty is one of the brand asset. It is very expensive in its value due to built many challenges to be faced and it requires a very long time.

Monetary management based on the interest rate affect the fulfillment of basic needs and equality of income distribution because the distribution of particular interest loans is based on the borrower’s ability to provide credit guarantees to cover loans and the adequacy of cash flow to meet those obligations. Because of this, the fund will tend to flow on the rich who are able to meet the requirements of such guarantee. However, the rich generally do not utilize those funds for productive investment, but also for conspicuous consumption and speculation. This resulted in rapid expansion of money demand for a non-productive purposes and expenses that are not useful, which in turn reduce the availability of funds for subsistence and development. This situation will make the poor increasingly difficult to meet basic needs because of the difficulty of this group qualify to the above and more so with the decrease in funding for these basic needs. Lending in such a manner that resulted in increasingly uneven distribution of income and wealth. Furthermore, in terms of economic growth, the increasing pattern of conspicuous consumption will cause the community to reduce the level of savings, thereby increasing interest rates, lower quality and quantity of investment, which in turn would reduce the rate of economic growth and employment. In addition, interest-based monetary management will also lead to high uncertainty in financial markets and will further influence the achievement of stability in the economy.
The high level of interest rate changes to inject a large uncertainty in the investment market that encourages borrower and lenders divert their market objectives, the purpose of long-term debt markets to short-term debt market speculation that smelled so fundamentally alter the investment decisions of businessmen. Where business people prefer to take profits on commodity markets, stocks, foreign exchange, and finance. Conditions such as these will make the markets more active and heated, which is one cause of current global economic instability.
Interest rates, whether high or low, bad implications on the health of the economy. Higher interest rates will hurt employers and the capitalist economy rate is the main inhibiting investment and capital formation. As a result of these high interest rates, among others, lower levels of productivity, employment opportunities, and economic growth. Low interest rates as well as bad. If high interest rates will hurt employers, then the low interest rates will hurt savers, especially small savers who invest funds in interest-based instruments. Low interest rate will stimulate borrowing for consumption purposes, whether public or private sector. Therefore, will increase inflationary pressures. In addition, low interest rates will encourage the investments that are not productive and increase speculation on the stock and commodity markets. Low interest rates also will encourage investments that are too saves manpower so that it will cause unemployment. Therefore, by causing a distortion in the price of capital, low interest rates have stimulated the consumption of which is inflationary, reduce the ratio of gross savings, lower investment quality, and creating a scarcity of capital. Coveted equilibrium where interest rates are not too high nor too low, just a dream. The best medicine is not just reduce interest rates because this will not eliminate the uncertainty of the future, given the presence of high budget deficits in several major industrial countries.
In an interest-free economy, economic activities that are non-productive speculation less meaningful because the Prohibition of interest in the use of instruments of economic activity. So the demand for investment funds is part of the total transaction request and will depend on economic conditions and the expected profit rate is not determined in advance. Given the expectation of profits did not experience such daily or weekly fluctuations in interest rates, then aggregate demand transaction needs tend to be relatively more stable. So that the speed of circulation of money can be better predicted behavior.
With no interest rates, money supply can be regulated by the central bank according to the needs of the real sector of economy and society goals. Can be set to realize growth targets a broad-based prosperity with a growth rate that is optimal, but realistic in the context of price stability. This target will be achieved by producing the desired growth in the high-powered money through a combination of fiscal deficits and loans to the results by the central bank to financial institutions.
So, with the elimination of interest instruments in monetary management will reduce a major source of uncertainty in the economy. Since interest is the root of uncertainty and uncertainty is the main source of economic inefficiency and in particular will make it difficult in doing forecasting.
Simply put, the profits from interest-free monetary management, among others:
a. Interest-free monetary management will help a more healthy growth in money supply.
b. Interest-free monetary management will minimize the demand for money for purposes that are not essential and wasteful as well as financing for projects that are questionable and futile.
c. Interest-free monetary management would lead to an increase in the flow of finance for productive purposes in addition to a broad distribution among a number of actors binis and improve allocation among various sectors of the economy.
d. Instability caused by changes in interest rates and fluctuations in aggregate spending will be reduced substantially.

Thus, interest-free monetary management will create a level of sustainable economic growth that will lead to a healthy dimension in the economy with a strong linkage between monetary and real sectors.

Capital markets provide benefits to the business, investor or investors and the national economy. Benefits for the business world that is coaching operations through the sale of shares is allternatif long-term financing sources. Investment needs are financed through the capital market is often more profitable in the appeal with any other financing. The benefits for investors, with the occurrence of capital markets allow investors to make investment diversification, forming an appropriate portofollio willing to risk their responsibilities and the level of profits they expected. While the benefits of which are reviewed in terms of national economy namely the sale of shares can become an efficient means of distribution of funds and can increase the productivity of capital. The more efficient the company that received funds from capital market financing is expected that the profits from increasing.
In the business world capital markets, investor preferences greatly affect the level of demand for a stock. Where preferences are largely influenced by the desire Expected return that investors on their capital investment. In this case, the preferences do not only consider the macroeconomic conditions and economic stability, but also look at the profile, performance and company policies of issuers, especially the strategic policies that relate directly to shareholder wealth. For investors themselves there are some benefits that are expected to be able to get some of the investments made in the stock market. These benefits include gains in the form of dividends, share price increases (capital gains), as well as gains in the form of investors’ rights to participate in the company’s Annual General Meeting of Shareholders, which will determine the direction and policies of the company into the future.
Investors in taking the decision to invest his money in the stock market would require complete information, Information is a fundamental need for investors to make decisions that reduce the uncertainty that might occur. Decisions taken in the hope will be in accordance with goals to reach, one of the existing information is the stock split announcement. In the capital markets often have we heard about the announcement of stock split. Perhaps we never heard of a listed company which announced that the company will conduct a stock split with a proportion of 2:1, 5:1 and others. For example one shares with a nominal value of 500 in split into five shares with a nominal value of 100 per share.
Stock split is the policy of the issuer (the company that went public) to increase the number of shares outstanding due to stock price is too high (over-valued). Theoretically, the impact of the stock split is the stock price will be under-valued because of the increased number of shares multiplied. Actually, the issuer hopes the stock split will be followed by a positive reaction from the market is growing interest in buying (bid-order) to investors. Rising bid-order will make the stock price that had been under-valued will rise again a few days after the stock split announcement.
However, sometimes a stock split did not cause the reaction means or even a negative reaction in the market. This occurs because the market (investors) to assess the policies of a stock split reflects the issuer less positive prospects for the future. According to market perception (investors), the main motivation of issuers do not stock split recapitalization activities long-term debt. Various types of market reactions (investors) of a stock split reflects the Signaling Theory temporary phenomenon due to changes in stock prices reflect the stock split or a Trading Range Hipotheses Liquidity Theory.

Sharp market competition on the now faced by many companies. In a competitive market which not only national in scope, the development of transportation and communication devices have pushed the global competition. Technological progress plays an important role in the short circulation of goods and the increasing number of goods produced.
This is a sign that the rapid growth of business, each company will always provide something the best of what they have. The presence of foreign companies that offer products with special characteristics ie low cost but high quality has led to heavy pressure for local companies to improve the quality and type of products and at the same time reducing the total production cost. This competitive pressure to make a lot of companies left the EOQ model and switch to Jus In Time approach. Jus In Time has two strategic objectives are to increase revenues and improve the company’s position in the competition.
Both these objectives can be achieved by controlling costs, improving delivery performance and quality improvement. Just In Time offers cost efficiency and flexibility in responding to demand for corporate profits declined as a result of higher costs and shrinking market share.
Extravagance will also have an impact on the quality and delivery of goods that are not useful Operations have decreased the quality of orientation, ie defects, scrap and rework. Process that is not useful in business will also enlarge the range of lead times, resulting in the delivery was delayed. Bad quality and delivery will result in reduced levels of consumer satisfaction.
Reducing waste is a major driver of Just In Time, this is also the main goal of all companies, whether it is a user of Just In Time or not. Just In Time is more than the inventory management system. Goods inventories, which include resources such as funds, space and labor in the view as a waste. Inside the hidden inefficiencies in the production and the increasing complexity of information systems from a company. Just In Time Although more than focus on inventory management, inventory control, but this is very important benefits.