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INDONESIA
A. Introduction
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the organization's internal control : services and role of internal
system has been developed auditing, people management,
appropriately and all the professional practices,
organization's operations have performance management and
been carried out effectively, accountability, organizational
efficiently, and economical (Haron relationships and culture, and
et al., 2004). governance structures. Moreover,
these levels can be described
To develop a good Government
briefly in the table 1.
Internal Auditor, The Institute of
Internal Auditors Research The IIA Suggested that
Foundation (IIARF) of The Institute Government Internal Auditors
of Internal Auditor (IIA) proposed improve their ability to the certain
the Internal Audit Capability Model level / effective level which at
(IA-CM) for the Public Sector in least has Key Process Areas (KPA).
2010. The IA-CM for the Public The lowest level (level 1) has no
Sector is a recognized KPA, so it is not recommended for
international framework that them, while the highest level
identifies the fundamentals (level 5) needs many efforts to
needed for effective internal reach and probably not suitable
auditing in the public sector. It is a for developing country such
universal model with comparability Indonesia. Level 2, 3, and 4 are
around principles, practices, and recommended. In addition, since
processes that can be applied the main purpose is to reach the
globally. The IA-CM identifies five effective level, so if the
progressive capability levels tied circumtances need the level 2 or 3
to leading practices. Each of Government Internal Auditor, it
capability level identifies key is preferable that Government
process areas and essential Internal Auditor may choose to
practices that must be remain at level 2 or 3, and not
implemented within the six aspire to a higher capability level
elements of an internal audit because the current level is the
activity identified in the model most cost effective at that
(IIARF, 2014). The six elements are particular time (The IIA, 2009).
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Level Integrated Internal audit management and professional
3 practices uniformly applied
Level Infrastructur Sustainable and repeatable internal audit
2 e practices and procedures
Level Initial No sustainable, repeatable capabilities
1 dependent upon individual efforts
Source: The Institute of Internal Auditors Research Foundation (IIARF),
2009.
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with an in-dept called Badan Pengawasan
understanding of the Keuangan dan
organizations business Pembangunan (Finance and
culture, system, and Development Supervisory
process. Moreover, Internal Board). The BPKP acts as an
auditors are expected to internal auditor for central
obey the standard of internal government and a
audit and adhere to its Code coordinator for all
of Ethics. government internal audit
agencies.
F. Government of
Indonesia conducted internal G. How about the regional and
audit since 1961 when local government ? in 1972,
Djawatan Akuntan Negara Indonesian Government
(State Accounting Agency) established Inspectorate Province
was established and which is an internal audit agency
separated from General of for regional/province government
Treasury. Both of the and Local Inspectorate - which is
institutions are under The an internal audit agency for local
Ministry of Finance. In government. The main purpose of
addition, in 1996 establishing these agencies is to
government established control government finance. These
General Directorate of State kinds of Internal Audit Agencies
Finance Supervisory are still exist until now eventhough
(DDPKN), but still remained in line with the development of
under The Ministry of governmental issues, economics
Finance. At the same year, and politics issues, they change
Government of Indonesia year by year. Some of the changes
also established are organizational issues like
Inspectorate General - which changing in the name,
is an internal audit agency in organization structures, and so on.
every ministry. In 1983, Others are regulation, authority,
Governments established an responsibility, job description, and
independent internal auditor so on.
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H. The BPKP, Inspectorate as Government Internal Auditor
General, Inspectorate Province, (Aparat Pengawas Internal
and Local Inspectorate are called Pemerintah-APIP).
I. Analysis
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the Inpectorate General of internal audit activity to be
ministries (APIP in each performed effectively and with
ministry), it seems to be no proficiency and due professional
problem since they have many care. The association of
human resources and can Indonesian Government Internal
recruit from the proffesional Audit (Asosiasi Auditor Intern
auditor. Trainings were also held Pemerintah Indonesia - AAIPI)
in occationally especially for set up the standard of
regional and local APIP. BPKP as government internal audit.
a coordinator of APIP sets up the These standards contained
guide line of training and general standard (which is
provides online training for included competency and
internal auditor depending the austerity of auditor, and auditor
level of traininng where auditor responsibility), standard of
is and the purpose what auditor internal audit implementation
need. However only few (which is included planning and
participants joint this training. implementing of internal audit),
Probably because not and standard of internal audit
interesting or something else. communication.
Moreover, ongoing coaching Q. These standards resembles
also became a problem in most a guide line to do internal audit
of APIP institution, since there is including the processes and
no ongoing coaching for APIP practice. The problem is do the
auditor. In addition, career internal auditors obey all the
development actually was standards or partially ? I believe,
designated well, unfortunately it if the internal auditors steady
does not work as the design. these standard consistently the
There is a valuation for every audit process and result will be
auditor in respective APIP better.
institution every year, but the 4. Performance Management and
result seems could be Accountability.
R. This element refers to the
compromised among the them.
information needed to manage,
Promotion for instance, to get
conduct, and control operations
the higher level position was
of the internal audit activity and
usually not because of ability
account for its performance and
and experience but mainly
results. To gather the
because of the relationship
informations properly, adequate
among the subordinate and
system of performance
bosses.
3. Professional Practices. management and accountability
P. This element reflects the should be applied. The main
policies, processes, and problem of APIP institutions in
practices that enables the this element is, there is no
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standard system for all APIP institutions was managed by
institutions to gather Ministry of Internal Affair, so all
information. Respective APIP of them have same organization
institutions seems try to solve structure. While APIP in
the problems by their self. Most respective ministry was set up
of the systems are still manually by government regulation.
and not to be documented well, Conversively, the cultures in
some use simple computerized every ornazation are unique, the
and perform limited differences in tribes, cultures,
documentations. This affect and customs may affect the
difficulties in managing, relationship even though every
conducting, and controlling the govenrment has same standard
operation of internal audit of government accounting as
activity. Internal audit report for well as same standards of
example, was not to be internal audit. In addition, how
documented well, so they can to develope the relationship
not learn what previous auditors among the auditor and CAE or
did several years ago and the between APIP institution and its
mistakes they did. auditee are depending on their
5. Organizational Relationships attitudes.
and Culture. 6. Governance Structures.
S. This element surrounds the T. This element explained the
organizational structure and the reporting relationship
internal management and (administrative and functional)
relationships within the internal of the CAE and how the internal
audit activity itself, as well as audit activity fits within the
the Chief of Audit Executives organizational and governance
(CAE) relationship with senior structure of the entity. It seems
management. The structure of not to be a problem for APIP
Regional and Local APIP institutions in Indonesia.
U.
V. C.2 Recommendation
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2. Undersanding the criterias in main building blocks that
every level determine the capability of an
Y. The IIA provides the criterias
internal audit activity (The IIA,
for each level of IA-CM, thus one
2014). when performed
thing that APIPs are suggested
collectively, achieve a purpose
to do is studing and
and produce immediate outputs
understanding the criteria by
and longer-term outcomes. The
discussion among them or
KPA is achieved when it is
directly with the IIA
implemented in an effective,
representative in Indonesia. This
lasting way.
can broaden their knowledge of 4. Focused Group Discussion (FGD)
AB. Based on the data
internal audit and hopefully can
revealed by BPKP, there are 404
also recognize their weaknesses
APIP institutions in the level 1
and strenghts indirectly.
3. Establishing the guide line to (initial), 69 APIP Institutions in
raise the level the level 2 (Infrastructure), 1
Z. BPKP as a coordinator of
APIP Institutionin the level 3
APIP institutions in Indonesia is
(Integrated), and no APIP
suggested to establish a guide
institution in the level 4
line to raise the level step by
(Managed) or level 5
step. BPKP also has to monitor
(Optimizing).
the development of respective AC. It is preferable if all
APIPs and provides the APIPs be divided in to
consultations, guidance, certain amount of groups. The
gradually including which factor APIP institutions which are in the
has been done, which sector level 2 can give advices to the
has not been done yet and so APIP institutions in the level 1
on. by discussions. Of course a big
AA. To establish the guide
Focused Group Discussion (FGD)
line, BPKP is suggested to focus
is too noisy and not effective,
on the Key Process Area (KPA).
then they can not concentrate
KPA relateS to the six elements
on the problems and solving in
and are found within each
discussion. Hence, enough
capability level. KPAs are the
number of members in a group
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is suggested. In addition, proper the informations and discussion
documentations of discussion results to the other groups.
are required in order to share
AD. Summary
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guide line to raise the level, Discussion (FGD).
and Focused Group
AH. Bibliography
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