7 th Meeting of The 10 th ASOSAI Research Project Teheran, 16-18 December 2014 The Audit Board of...
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Transcript of 7 th Meeting of The 10 th ASOSAI Research Project Teheran, 16-18 December 2014 The Audit Board of...
7th Meeting of The 10th ASOSAI Research
ProjectTeheran, 16-18 December 2014
The Audit Board of The Republic of Indonesia
Company Logo
I. BackgroundAudit Board of Indonesia (BPK)
• Established on January 1947
• Main duty (constitution of 1945)
“To audit the management and accountability of state finance, there shall be a Supreme Audit Board which shall be free and independent.”
Law 15/2004
BPK could conduct investigative audit to reveal any corruption indication and/or state loss
Law 15/2004
BPK could be expert witness before the court regarding state loss examination
• Position in state administration
Considerable level of independence, same level with president, parliament, and supreme court
II. Evaluation of Current Situation of Fraud and Corruption
Serious and Pervasise
Abuse of Power and Bribery
Law Enforcement, Tax, Procurement
Weak and Lack of Anti Corruption System
III. Evaluation of Current Condition of Anti- Corruption
In general, Indonesia has an adequate tools to fighting against corruption1. Indonesia has a National Anti Corruption Strategy, define the
strategy to action plan; and has employed all of the measures in fighting against corruption;
2. Indonesia has an Anti Corruption Agency with a comprehensive functions;
3. Indonesia has a strong legal basis to fight against corruption, include a special law for corruption;
4. Indonesia has developed an International Cooperation in fighting against corruption with moderate success level;
5. Indonesia has an intensive efforts to promote awareness in fighting against corruption.
III. Obstacles in Anti-Corruption
The biggest obstacles are collusion and a light punishment for fraudster.
PREVENTIVE DETECTIVE REPRESSIVE
Optimizing prevention on
potential fraud
Immediate action to detect fraud conducts
when exist
Litigation support on prosecution with highly and legally accurate accounting
FRAU
D
Public Information
IA R
epor
ts
Requ
est f
rom
G
over
nmen
t &
Hou
se o
f Rep
s.
Non
Inve
stig
ativ
e A
udit
Rep
ort
Investigative AuditBoard initiative
1st Investigation 2nd Investigation Prosecution Court
Corruption Eradicating Comm.
General Attorney
National Police
Supreme Court
High Court
District Court
RECOMMENDATION ON
INTERNAL CONTROL
Financial Audit
Performance Audit
Audit for Specific Purpose
(non Investigative)
IV. Role of Audit to Detect Fraud and Corruption
Forensic Audit Expert Witness
IV. Role of Audit to Detect Fraud and Corruption
Investigative Audit Methodology
• Analize available data• To Create a Predication
• Create the hypothesis• Worst-Case Scenario
• Test the hypothesis• Audit Technique;
• Refine and amend the hypothesis.• Proved vs Unproved
Audit Techniques
• Document analysis go substance, not only form!
• Analytical review• Re-performance/re-computation• Observation• Physical examination• Confirmation• Interview 2-ears..one-
mouth..s
IV. Role of Audit to Detect Fraud and Corruption
Audit Experiences to Detect Fraud and Corruption1. Hambalang Case (procurement)2. Century Case (bank bailout)
Limitation3. Organizational (Non existence of Formal Investigative Audit
Unit)4. Lack of Resources (financial, fraud examiner)
V. Typical Audit Practices
PreventiveGoal: Corruption
Prevention1. E Audit2. Public Awareness3. Training on Fraud
Awareness
DetectiveGoal: Corruption detection
in earlier phase1.Investigative Audit
Manuals2. Training on Investigative
audt
Follow Up and Reporting
Goal: Quick and precise response by LEA on
corruption case1. MoUs with LEA2. Expert Witness3. Training on State Loss Examination and Expert Witness (moot court)
201063 cases
USD 49,326
201129 casesUSD9,759 2012
20 casesUSD13,385
201342 cases
USD24,698
200945 cases
USD 61,897
V.Reporting and Follow Up RoleNumber of corruption cases submitted to the Law Enforcement Agency
VI. Measures on Improving Audit’s Function in Detecting Fraud and Corruption
MoU between/Among SAIsActive Member of INTOSAI, ASOSAI, ASEANSAICooperation with Donors (World Bank, USAID)
Mandate to do Investigative AuditCollaboration with LEA for combating corruption (ex: MoUs)Indirect role for strengthening Government Anti Corruption Standard (ex: Performance Audit on Gov’t Fraud Control System)
Whistleblowing SystemInvestigative Audit ManualsTraining on Fraud Awareness and Investigative Audit