STANDARD OF
COUNTRY FINANCIAL EXAMINATION
Source: BPK Regulation No. 01 of 2017
State finance is one of the main
elements in the administration of state governance and has very important
benefits in order to realize the goals of the state to achieve a just,
prosperous, and prosperous society as mandated in the Preamble of the 1945 Constitution
of the Republic of Indonesia. Furthermore, through the provisions of Article
23E paragraph (1) of the 1945 Constitution of the Republic of Indonesia, the
state holds a free and independent BPK that has the duty and authority to carry
out checks on the management and responsibility of state finances.
The examination of the management and
responsibility of state finances is carried out in order to create a clean and
free government from corruption, collusion and nepotism. In order to guarantee
the quality of the results of the state financial audit, the implementation of
the audit needs to be carried out based on an inspection standard.
The inspection standards used in
carrying out the audit assignments so far are the State Financial Inspection
Standards stipulated in the Supreme Audit Agency Regulation Number 1 of 2007.
The SPKN uses the 2003 main references of Generally Accepted Government
Auditing Standards (GAGAS). GAGAS has undergone a revision of two times, with
the last revision in 2011.
The private sector inspection standards
that apply in Indonesia (Public Accountant Professional Standards / SPAP) and
internationally (International Standards on Auditing / ISA and International
Standards of Supreme Audit Institutions / ISSAI) have developed and experienced
many changes. SPAP, ISA, and ISSAI are prepared using a standard setting
approach based on principles (principle-based standards). Previously,
inspection standards used a standard setting approach based on more detailed
rules (rule-based standards).
The Supreme Audit Agency Regulation
Number 1 of 2007 concerning the State Financial Inspection Standards is not in
line with the development of audit standards and the needs of the BPK
organization so it needs to be replaced in accordance with the development of
the latest inspection standards. State finance is one of the main elements in
the administration of state government. To achieve the goals of the state,
State Finance must be managed in an orderly manner, obeying the laws and
regulations, efficient, economical, effective, transparent and responsible by
paying attention to the sense of justice and propriety.
To examine the management and
responsibility of state finances, a free and independent CPC is formed. BPK
checks include financial checks, performance checks, and checks with specific
objectives (PDTT). The BPK conducts checks based on inspection standards.
Inspection standards are a benchmark for examining the management and
responsibility of state finances which include general standards,
implementation standards, and reporting standards that must be guided by the
BPK and / or the Examiner.
Compilation of inspection standards
requires a reference and basis in the form of an Inspection Conceptual
Framework. The development of this conceptual framework is in accordance with
the provisions of legislation and the conceptual framework used in the preparation
of relevant international inspection standards.
GENERAL
DESCRIPTION OF STATE FINANCIAL EXAMINATION
State Finance
Examination Mandate
The 1945 Constitution mandates the BPK to examine
the management and responsibility of state finance freely and independently.
The results of the BPK examination are submitted to the House of
Representatives (DPR), Regional Representative Council (DPD), and Regional
Representative Council (DPRD) as people's representative institutions in
accordance with their authority. The results of the inspection are followed up
by representative institutions and other bodies in accordance with the law. The
mandate was further elaborated in Law Number 15 of 2004 concerning Management
Examination and Financial Responsibility State and Law Number 15 of 2006 concerning
the Supreme Audit Agency.
Independence of
the BPK
To examine the management and responsibility of
state finance, a free and independent CPC is formed. BPK has freedom and
independence in planning, implementing, reporting, and monitoring follow-up of
audit results. In addition, the independence of the BPK in examining state
finances includes the availability of human resources, budgets, and other
supporting facilities.
Definition of
Examination of State Finance
Examination of state finances is a
process of problem identification, analysis, and evaluation conducted
independently, objectively, and professionally based on inspection standards,
to assess the truth, accuracy, credibility and reliability of information regarding
the management and responsibility of state finances. Thus, the examination of
state finances provides adequate confidence. The inspection process includes
planning, implementing, reporting and monitoring the follow-up of audit
results.
Examination is carried out in order to
encourage good state financial governance through the acquisition of confidence
that the management and responsibility of state finances are in accordance with
the provisions of legislation and / or the principles of good governance.
Scope of State
Financial Examination
The scope of the state financial audit
includes examining the management and responsibility of state finances.
Management includes all activities of planning, implementation, supervision and
accountability. Responsibility is the obligation to carry out management of
state finances in accordance with the principles of good governance.
State Finance is all state rights and
obligations that can be valued with money, as well as everything in the form of
money or in the form of goods that can be used as state property in connection
with the implementation of these rights and obligations. The scope of the
country's finances includes:
a. State rights to collect taxes, issue and circulate
money, and make loans;
b. The obligation of the state to carry out public
service tasks of the state government and pay bills to third parties;
c. State revenue;
d. State expenditure;
e. Regional revenue;
f. Regional expenditure;
g. State wealth / wealth of the region which is managed
by itself or by other parties in the form of money, securities, accounts
receivable, goods, and other rights that can be valued with money, including
assets separated from the state / regional company;
h. The wealth of other parties that are controlled by
the government in the context of carrying out government duties and / or public
interests; and
i.
Wealth of other
parties obtained by using facilities provided by the government.
Types of State
Financial Examinations
The types of state financial checks include financial
checks, performance checks, and PDTT. The purpose of an examination determines
the type of examination. Financial examination aims to provide opinions on the
fairness of financial statements. The purpose of the performance audit is to
provide conclusions on the economic aspects, efficiency and / or effectiveness
of state financial management, and provide recommendations to improve those
aspects. PDTT aims to provide conclusions in accordance with the objectives of
the inspection set. PDTT can take the form of compliance checks and
investigative checks.
Benefits of
State Financial Examination
BPK's examination encourages the management of state
finances to achieve state goals, including through:
a. provision of
audit results including conclusions that are independent, objective and
reliable, based on sufficient and appropriate evidence;
b. strengthening
efforts to eradicate corruption in the form of submitting findings that
indicate criminal offenses and / or losses in the management of state finances
to the competent authorities to be followed up, and in the form of prevention
by strengthening the state financial management system;
c. increased
accountability, transparency, economics, efficiency, and effectiveness in the
management and responsibility of state finance, in the form of constructive
recommendations and effective follow-up;
d.
increasing
compliance with management and accountability of state finances against
statutory provisions;
e. increasing the
effectiveness of the role of the Government Internal Supervision Apparatus; and
f. increased public
confidence in the results of the BPK's audit and management of state finances.
Transparency and
Accountability for State Financial Examinations
The BPK must carry out its economic, efficient and
effective main tasks, functions and authorities based on the provisions of the
laws and regulations. In the context of transparency and accountability in the
implementation of its main duties, functions and authorities, the BPK publishes
the results of its implementation in accordance with the provisions of
legislation through various media, both conventional and in the network
(online).
ELEMENTS OF
STATE FINANCIAL EXAMINATION
Elements of a state finance check include:
a.
Three-party
relationship, which consists of:
1.
state financial
examiner,
2.
the party
responsible, and
3.
LHP users;
b.
Subject matter
and subject matter information;
c.
Examination
criteria;
d.
Proof of
examination;
e.
Report on audit
results; and
f.
Monitoring
follow-up of audit results.
COUNTRY
FINANCIAL EXAMINATION PRINCIPLES
The principles of state financial auditing are
provisions that must be understood and adhered to by standard makers in
compiling inspection standards and auditors in conducting audits, which
include:
a.
Code of Ethics;
b.
Quality control;
c.
Management and
expertise of the Examining team;
d.
Risk of
inspection;
e.
Materiality;
f.
Inspection
documentation; and
g.
Communication
examination.
DEVELOPMENT OF
EXAMINATION STANDARDS
- Development of inspection standards includes procedures for drafting standards, revising standards, and interpreting standards. The development of inspection standards considers standard developments in the professional environment both nationally and internationally. The process of developing inspection standards includes steps that need to be taken carefully (due process) to produce generally accepted inspection standards. These steps include consultation with the government, professional organizations in the field of inspection, and considering international inspection standards.
- Preparation of inspection standards is carried out based on this conceptual framework reference. The steps to form examination standards include identifying topics or problems, limited research, writing standard draft, launching standard exposure drafts, standard exposure draft hearings, discussing responses and inputs on exposure drafts of standards, consulting draft standards with the Government, and finalizing and setting standards .62. The revised inspection standards can be major revisions and minor revisions to the inspection standards. Major revisions are the addition, subtraction, or overall change of a sub-section in the standard inspection statement, while minor revisions are the addition, subtraction, or change of important terms, sentences and / or paragraphs in a sub-standard statement of examination.
- Interpretation of examination standards is explanation, clarification, and further explanation of the inspection standards.
- Regulations on the development of inspection standards are further stipulated by the BPK.
- A review of the inspection standards needs to be carried out in the event of a change in the state's financial audit environment.
RELATIONSHIP OF
CONCEPTUAL FRAMEWORK, CONDITIONS OF LEGISLATION REGULATIONS, STANDARD OF
EXAMINATION, AND OTHER PROVISIONS
- This Conceptual Framework does not replace the provisions of legislation in Indonesia. The Conceptual Framework does not specify audit provisions and procedures. These provisions and procedures will be regulated in inspection standards developed with reference to this Conceptual Framework and do not conflict with the provisions of the laws and regulations.
- In addition to inspection standards, the BPK also issued a code of ethics, quality control standards, provisions for the use of examiners from outside the BPK, provisions on monitoring follow-up of BPK audit results, and other provisions.
- As an elaboration of inspection standards, the BPK publishes implementation instructions, inspection technical instructions, audit management guidelines, and other elaborate provisions.
- A review of the Conceptual Framework needs to be carried out in the event of a change in the state's financial audit environment.
SYSTEMATIC
These Inspection Standards are arranged according to
the systematics as follows:
- PSP 100: GENERAL STANDARDS
Scope
This PSP sets
general standards for carrying out financial checks, performance checks and
PDTT.
This general
standard relates to ethics; independence, integrity and professionalism;
quality control; competence; consideration of non-compliance, fraud, and
non-compliance; audit communication; and inspection documentation in the
implementation and reporting of examination results; relations with
professional standards used by public accountants; and the obligations of the
Government's Internal Oversight Officer and public accountants in the
examination of state finances.
Effective
date
This PSP is valid and has binding legal
force from the date of promulgation.
Aim
The purpose of the examiner in
implementing the General Standards is as a basis for effective implementation
of standards and reporting standards. Thus, this general standard must be
followed by the BPK and all Examiners who carry out checks based on the
Inspection Standards.
- PSP 200: STANDARD FOR IMPLEMENTING FINANCIAL EXAMINATION
Scope
- This PSP regulates the responsibilities of the
Examiner in carrying out Examination which includes planning, collecting
evidence, developing audit findings and supervision.
- Planning relates to the examiner's responsibility in
connecting the audit topics to be conducted with BPK's strategic planning and
arranging the planning for each audit assignment.
- Collection of evidence relating to the
responsibilities of the Examiner in designing and implementing examination
procedures to obtain sufficient and appropriate audit evidence, supporting
accurate conclusions, according to the characteristics that must be possessed
by proof of examination during an examination.
- The development of audit findings relates to the
responsibility of the examiner in developing audit findings based on evidence
of the examination obtained.
- Supervision is related to the responsibilities of
the Examiner in providing direction and guidance to the Examiner during the
inspection to ensure the achievement of the objectives of the examination and
fulfillment of the inspection standards.
Effective
date
This PSP is valid and has binding legal
force from the date of promulgation.
Aim
The purpose of the Examiner in
implementing this standard is to:
a.
plan quality
checks so that they can be carried out efficiently and effectively; and
b.
design and carry
out inspection procedures to obtain sufficient and appropriate evidence.
- PSP 300: STANDARDS FOR FINANCIAL EXAMINATION REPORTING
Scope
This PSP
regulates the obligation of the Examiner to prepare LHP for financial audits,
performance checks and PDTT.
The LHP
functions to: (1) communicate the results of the examination to the competent
party based on the applicable laws and regulations; (2) avoid misunderstanding
of the results of the examination; (3) make the results of the examination as
material for carrying out corrective actions by the responsible party; and (4)
facilitate monitoring of follow-up to determine the effect of the corrective
actions that should be taken.
Effective
date
This PSP is valid and has binding legal
force from the date of promulgation.
Aim
The purpose of the Examiner in
implementing this reporting standard is to:
a.
form a
conclusion of the examination results based on an evaluation of the proof of
examination obtained; and
b.
communicate the
results of the examination to the parties concerned.
EXAMPLE
OF OPINION FORMAT
1.
Opinion Without
Exclusion
2.
Example Of
"Exceptional Exception Opinion With A Thing Pressure Paragraph"
3.
Opinion
"Required With Exceptions"
4.
Opinion
"Required With Exceptions"
5.
"Not
Reasonable" Opinion
6.
Opinion "Do
Not Represent The Opinion"
REFERENCE
