TOWARD AND AUDITING PHILOSOPHY

ZULFAKAR AND ICHSAN

WHY NEEDED AUDITING ?
AUDITING CONCEPTS
AUDITING FUNCTION
TYPES OF AUDITING
THE ACCOUNTANT
PROFESSION
INSTITUTIONS OF
AUDITORS
WHICH WILL BE CONDUCTED DISCUSSION
(1) WHY NEEDED AUDITING ?
Auditing is a means of evaluating the
effectiveness of a company's internal
controls Maintaining an effective
system of internal controls is vital for
achieving a company's business
objectives, obtaining reliable financial
reporting on its operations, preventing
fraud and misappropriation of its
assets, and minimizing its cost of
capital. (Jeff Clements, 2014)
The demand Auditing done, because
the presence of fraud or irregularities
authority against liability in the period
of a company or government
organization
BENEFITS
OF AUDITS

1. Verification of conformance to requirements such
as a management system, regulatory and
contractual
2. Identification of risks and monitoring of risk
treatments
3. Identification of opportunities for improvement
4. Verification that projects were implemented
according to plan
5. Determination of readiness of new products and
processes
6. Verification of system effectiveness
7. Identification of inefficiencies and ineffective
controls
8. Verification of corrective actions and their
effectiveness
9. Identification and reporting of best practices
10. 'Advancing the achievement of organization
objectives
AUDITING CONCEPTS
1
Evidence
3
Presentation
or disclosure
is reasonable
4
Independency
2
Due Care
5
Ethical
Behavior
Mautz dan Sharaf (1961)

Auditing is the process of examining the
assertions or representations of
another party and providing assurance
on the fairness and reliability of the
information in accordance with given
standards. (Frank Giove, 2003)
ISO 1901122011 defines an audit as a
systematic, independent and documented
process for obtaining audit evidence
[records, statements of fact, or other
information relevant to the audit criteria and
verifiable] and evaluating it objectively to
determine the extent to which audit criteria
[set of policies, procedures, or requirements]
are fulfilled." (J.P. Russel, 2012:8)
Denition
of
Auditing


TYPES OF
AUDITING
(Frank Giove,
2003)

1.
Compliance audit:
attest to the
fairness of the
information versus
given standards,
e.g., nancial
statements in
conformity with
GAAP.

2.
Operational
audit: measure
the effciency and
effectiveness of a
particular
operation or unit
or department of
a business.
TYPE
AUDITOR
ACCOUNTANT
PUBLIC
LISTED
AUDITOR
GOVERNMENT
(BPK, BPKP)
AUDITOR
INTERNAL
(EMPLOYEE)
AUDITOR
TAXATION
(DJP, KPP)
1
2
3
4
ORGANIZATION
PROFESSION ACCOUNTANT
IN INDONESIA
ORGANIZATION
GOVERNMENT
ORGANIZATION
NON GOVERNMENT

Department of Finance
BPK
BPKP
Tax Office
Regional Supervisory Board
DPR and DPRD
1 2

IInstitute of Accountants
Indonesia (IAI)
IAI-Compartment
Public Accountants
Bapepam
ORGANIZATION
PUBLIC ACCOUNTING FIRM
(KAP)
PARTNER
MANAGER
SENIOR
AUDITOR
JUNIOR
AUDITOR
Responsible for relations with client,
the auditing process; signed the
audit reports, management letters,
billing audit fee.
As an audit supervisor to
senior auditor jobs.
Responsible for technical process
audit and review jobs junior auditors.
Do field work
Provisions Accounting
Profession in USA
Certified Public
Accountant (CPA)
Certified Internal
Auditor (CIA)
Certified Management
Accountant (CMA)
Published by :
Certified Public
Accountant
American Institute
of Certified Public
Accountants
The scope of duties
broader than the
CIA and CMA

Published by
Institute of Internal
Auditors (IIA)
Provide direct
services to the job
poster not to the
public

Published by :
Institute of
Management
Accountants (IMA)
Provide direct
services to the job
poster not to the
public
provide services to
the public

Essence of auditing philosophy is the analysis or study
critically to formulate problems, find solutions with
solid arguments and through a process of dialogue in
the context find the spirit or identity auditing
knowledge. Opinion of the audit depending on the
quality of the confidence gained through the
collection and development of the evidence.