STATE FINANCIAL EXAMINATION STANDARDS

APPENDIX II

REGULATION OF THE FINANCIAL EXAMINATION AGENCY REPUBLIC OF INDONESIA NUMBER 1 OF 2017

STANDARD OF COUNTRY FINANCIAL EXAMINATION STANDARD EXAMINATION STATEMENTS 100

STANDARD EXAMINATION STATEMENTS 100

GENERAL STANDARDS

PRELIMINARY 

Scope

1.       This PSP sets general standards for carrying out financial checks, performance checks and PDTT.

2.       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

3.       This PSP is valid and has binding legal force from the date of promulgation.

AIM

4.       The purpose of the examiner in implementing the General Standards is as a basis for effective implementation of standards and reporting standards. 

DEFINITION

5.       For the purposes of this standard, the terms below mean the following:

a.       The Audit Board (CPC) is a state institution that has the duty and authority to examine the management and responsibility of state finances.

b.      The examiner is the person who carries out the duties of State financial management and responsibility for and on behalf of the CPC.

c.       Subject matter is examined and/or matters of concern in an examination assignment, which can be information, condition, or activity that can be measured/evaluated based on certain criteria.

d.      Subject matter information is the result of evaluation or result of measurement of fundamental matter to criteria.

e.      Ethics is an attitude and behaviour that demonstrates the willingness and ability of a person consciously to adhere to the provisions and norms applicable in an organization.

f.        The CPC Code of Ethics hereinafter referred to as the Code of ethics are the norms that each member of the CPC and examiner must adhere to in order to maintain the dignity, honor, image, and credibility of CPC.

g.       Independence is an attitude and action in conducting checks to be impartial and deemed impartial to anyone, and is not influenced and deemed to be not influenced by anyone.

h.       Integrity is the quality, nature, or circumstance that demonstrates the whole unity, it possesses the nature of honest, hard work, and adequate competence.

i.          Professionalism is the ability, expertise, and commitment of the profession in carrying out tasks.

j.        Professional is related to a profession that requires special intelligence to run it.

k.       Professional skepticism is the attitude that includes thoughts that always question and conduct a critical evaluation of the evidence of examination or other matters during the examination.

l.         Professional considerations are the application of collective knowledge, skills, ethics, and examiner experience on the examination process.

m.    Quality control standards are the benchmark to assess the extent to which the inspection process runs according to inspection standards.

n.      Quality control system is a set of procedures and policies applied to ensure inspection practices in accordance with the standards and provisions of legislation.

o.      Competence is the education, knowledge, experience, and/or expertise owned by a person, whether about examination or about certain matters or areas.

p.      Competent is capable or able in the field in which it is mastered.

q.      Experts are persons who have expertise in certain matters or fields, which are required in the examination and not an inspector.

r.        Cheating (fraud) is an act that contains an element of intent, intention, benefit oneself or others, fraud, concealment or embezzlement, and abuse of trust that aims to gain unprofitable profits which can be in the form of money, goods/possessions, services, and does not pay for services, conducted by one or more individuals who are responsible for governance, officers, or third parties.

s.       Abuse is less or unworthy of conduct when compared to the behavior of a wise person and use common sense by considering good public financial governance practices.

t.        Fraud risk factors are events or conditions that indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud.

u.      The initial indication of cheating is the symptoms (red flags) indicating the likelihood of cheating.

v.       Predescension is the whole of the events, circumstances at the time of the event, and all matters related or related that can bring a person who has common sense, professional, and has a degree of prudence, to be sure that the fraud has, Is or will occur. Predescension is the basis for starting PDTT in the form of investigative examination.

w.     Communication inspection is a process used by BPK or examiner in the acquisition of data and information in order to collect evidence of inspection and delivery of inspection results to the responsible party.

x.       Documentation of the examination is the documentation for the procedures that have been conducted, the adequate and precise inspection evidence obtained, and the conclusion drawn by the examiner.

CONDITIONS

Ethics

6.       Members of the CPC and examiner must conduct inspections in accordance ethical principles as an important element of the value of accountability and public hope to the CPC and examiner in conducting inspections.

Independence, integrity and professionalism

7.       Members of CPC and examiner in carrying out their duties and authorities must adhere to the ethical principles of independence, integrity, and professionalism which are the basic values of BPK. (Ref. Para. A1-A2)

8.       Examiner must employ careful and thorough professional skills, professional skepticism, and professional consideration throughout the examination process. (Ref. Para. A3-A9)

Quality control

9.       CPC must establish a quality control standard to ensure the quality of the inspection results.

10.   In applying quality control standards, the CPC must establish and develop a quality control system to ensure that the inspection is in accordance with the standard of inspection and provisions of legislation.

11.   The quality control system consists of procedures and policies to ensure the acquisition of high quality inspection results in accordance with the standard of inspection and provisions of legislation.

12.   Examiner must implement quality control system at the time of assignment to provide adequate assurance that the inspection is in accordance with the standard of inspection and regulatory provisions, and the LHP is appropriate to its condition.

Competence

13.   The examiner must collectively have adequate professional competence to carry out the inspection duties. The professional competence is evidenced by a professional certificate issued by an authorized institution or other document expressing expertise. (Ref: Para. A10 – A11)

14.   CPC must determine the competencies needed to ensure the examiner has the appropriate expertise to perform inspection assignments.

15.   The examiner must maintain its competence through a continuous professional education at least 80 (eighty) hours in 2 (two) years.

Use of Experts

16.   CPC can use competent experts. (Ref: Para. A12

17.   In the use of experts, BPK must believe that the expert is independent, qualified, competent in their field, and should document the belief.

Use of proofing personnel outside the CPC

18.   CPC can use inspectors outside the CPC and must be independent and have the necessary competencies. The competency of inspectors outside the CPC is evidenced by a professional certificate issued by an authorized institution or other document expressing expertise.

Continuing education for experts and inspectors outside the CPC

19.   BPK is responsible for ensuring that experts and examiners outside the CPC involved in the inspection process meet the continuing educational requirements.

Non-compliance, cheating, and dissolving considerations

20.   The examiner must design an examination to provide adequate confidence to detect non-compliance with the provisions of legislation, contracts, and other legal products that directly and materially affect the subject matter/ Information of the subject matter.

21.   The examiner must identify fraud risk factors and assess the risk of non-compliance with the provisions of the legislation caused by fraud and/or abuse. Such risks should be considered a significant risk (significant risks) and the examiner must gain an understanding of the controls associated with such risks. (Ref: Para. A13

22.   If there is a risk of non-compliance with the provisions of legislation that is indicative of fraud and dissolution that significantly affects the subject matter/information subject matter examined, the examiner must modify the Procedures to identify the occurrence of fraud and/or dissolving, and to determine its impact on the subject matter/information of the subject matter examined.

23.   The examiner shall disclose non-compliance with the provisions of legislation that indicates fraud, dissolution, and/or loss of country/region, as well as non-direct and material noncompliance of Information subject to the provisions.

24.   PDTT in the form of investigative examination is only done when there is adequate predescension. Predescension can be derived from the findings of the examination other than PDTT in the form of investigative examination, information on internal and external CPC. Such findings or information must be tested before they are accepted as predescension.

Communication examination

25.   The examiner must establish efficient and effective communication throughout the inspection process, so that the inspection process runs smoothly and the test results are understandable and actionable by the responsible party and/or stakeholders. Related interests. (Ref: Para. A14)

26.   Examiner must use professional considerations to determine the form, content, and intensity of communication.

27.   In the case of termination of inspection, the examiner must provide a written explanation to the assigned officer.

28.   The CPC must communicate in writing the reason for termination of inspection to the inspected entity, the requesting entity for examination, Representative agency, and/or law enforcement agency.

Documentation Examination

29.   The examiner must arrange adequate inspection documentation in a timely manner throughout the examination phase and provide a clear understanding of the examination procedures conducted, professional consideration, evidence gained, and Conclusions made.

30.   The examiner must compile the inspection documentation in order to provide clear and adequate information. Through such documentation, other examiners who do not have any background knowledge on the inspection may understand the nature, time, scope, and outcome of the examination procedures carried out, evidence obtained in supporting the findings, conclusion, and inspection recommendations, as well as the reasons behind all the significant things needed in taking professional consideration and related conclusions.

31.   CPC must develop a system of efficient and effective inspection documentation in accordance with the provisions of legislation.

Relationship with professional standards used by public accountants

32.   In the financial check, this inspection standard enforces the audit standard contained in the SPAP set by the Association of Public Accountants, as long as it is not regulated in this standard examination.

Obligation of internal supervision of government and public Accountant in State financial examination

33.   Government internal supervision officers conducting performance and audit audits with specific objectives, and public accountants examining the country's finances under the provisions of the law are obliged to carry out all relevant provisions of the standard This examination.

OTHER APPLICATION MATERIALS AND EXPLANATIONS

Independence, integrity and professionalism

Independence (REF: Para. 7)

A1. CPC needs to pay attention to personal disruption to the exploitation of the test. Personal disruption caused by a relationship and personal view may result in the examiner limiting the scope of questions and disclosure or weakening of findings in any form. The examiner is responsible for notifying the authorized officer of the CPC if it has a personal disruption to its independence. Personal disruption of individual examiner, among others:

A.      Have a blood relation upward, downward, or Semenda until the second degree with the management of the entity or program examined;

B.      Have financial interest either directly or indirectly to the entity or program examined;

C.      Have worked or provided services to any entity or program examined within the last 2 (two) years;

D.      Have a cooperation relationship with the entity or program examined;

E.       Involved either directly or indirectly in the activity of the inspection object, such as providing assistance, consulting services, system development, arranging and/or reviewing the financial statements of the entity or program being examined. Integrity (REF: Para. 7)

A2. Integrity is embodied in honest, objective, and decisive attitudes in implementing principles, values, and decisions. Disruption to integrity includes:

A.      Request and/or receive money, goods, and/or other facilities either directly or indirectly from the party related to the inspection;

B.      Inhibit the performance of inspection duties for personal, individual, and/or group purposes;

C.      Impose personal will to the examined party;

D.      Change the findings or order to change the findings of the examination, opinion, conclusion, and recommendation of the test results that do not match the facts and/or evidence in the examination.

Professional Skills (REF: Para. 8)

A3. The examiner must use careful and thorough professional skills in determining the type of examination to be performed, determine the scope of the inspection, select the methodology, determine the type and amount of evidence to be collected, or in Testing and procedures for conducting inspections, as well as in conducting assessment and reporting of inspection results.

Professional skepticism (Ref: Para. 8)

A4. The examiner must plan, implement, and report examination with a professional attitude of skepticism. The examiner acknowledges that certain circumstances may cause the underlying matter of criteria. The attitude of professional skepticism means the examiner makes a critical assessment with the mind that always questioned the adequacy and accuracy of the evidence gained during the examination.

A5. The examiner must use professional skepticism in assessing the risk of fraud that is significantly to determine factors or risks that can significantly affect the job of the examiner when cheating occurred or may have occurred.

A6. The examiner should use professional skepticism towards things, among others, as follows:

A.      Evidence of examination contrary to the evidence of other examinations obtained;

B.      Information that raises the question about the reliability of the document and responses to information requests used as proof of examination;

C.      Circumstances indicating fraud and/or dissolving;

D.      Conditions that allow the need for additional screening procedures other than the procedures required in the inspection guidelines.

Professional Considerations (Ref: Para. 8)

A7. The examiner should use professional considerations in making decisions about:

A. Point/information subject matter;

B. appropriate criteria;

C. Parties related to the examination;

D. Confidence level;

E. Scope of examination;

F. risk of examination;

G. Inspection procedures to be used in connection with the risk inspection

H. Materiality.

A8. The examiner should also use professional considerations in evaluating the adequacy and accuracy of the inspection evidence obtained, and the measures to achieve the overall goal of the test have been conducted.

A9. The examiner must use professional consideration in making conclusions based on the evidence of the inspection obtained.

Competence (REF: Para. 13)

A10. Professional competencies include education and experience. Professional competence is not only measured quantitatively by how long the examination experience is, because it cannot accurately describe the type of experience the examiner has. The most important element for inspectors is maintaining professional prowess through a commitment to learning and development throughout the professional life of the examiner.

A11. Inspectors assigned to carry out inspections according to inspection standards should collectively have competency:

A. Educational background, expertise and experience, as well as knowledge of the standard examination that can be applied to the type of assigned examination;

B. General knowledge of environmental entities, programs, and activities examined (object inspection);

C. Clear and effective communication skills, both orally and in writing; Dan

D. Skills that require special knowledge in a particular field according to the examination implemented.

Use of skilled personnel (REF: Para. 16)

A12. Experts can be used to advise the examiner or be part of the Examiner team.

Considerations of disobedience, cheating, and dissolving (Ref: Para. 21)

A13. The examiner is only concerned against the initial indication cause material impact on opinions or conclusions. Although the examiner finds an initial indication of cheating, the checker is not authorized to declare fraud because the term cheating is a legal realm.

Communication Examination (REF: Para. 25)

A14. The examiner communicates matters related to the inspection process, such as inspection objectives, examination scope, inspection time, inspection criteria, inspection findings, and any difficulties or limitations encountered during the inspection. In the form of an investigative examination, the examiner may restrict communication about matters relating to the audit process.

APPENDIX III

REGULATORY BOARD OF FINANCIAL AUDIT REPUBLIC OF INDONESIA NUMBER 1 YEAR 2017

STATE FINANCIAL EXAMINATION STANDARDS STATEMENT OF STANDARD EXAMINATION 200

STATEMENT OF STANDARD EXAMINATION 200

STANDARD IMPLEMENTATION EXAMINATION

INTRODUCTION

Scope

1.       This PSP regulates the responsibilities of the examiner in conducting inspections that include planning, collecting evidence of inspection, development of inspection findings, and supervision.

2.       Planning is related to the responsibilities of the examiner in linking the topic of examination to be conducted with strategic planning CPC and drafting the planning for each inspection assignment.

3.       Collection of evidence in connection with the responsibilities of the examiner in designing and carrying out inspection procedures to obtain adequate and precise inspection evidence, supporting accurate conclusion withdrawal, as required by the characteristics to be is owned by proof of examination in an examination.

4.       The development of inspection findings relates to the examiner's responsibilities in developing inspection findings based on the evidence of inspection obtained.

5.       Supervision is associated with the responsibility of the examiner in providing directions and guidance to the examiner during the inspection to ensure the achievement of inspection objectives and fulfillment of inspection standards.

Effective Date

6.       This PSP is valid and has the legal force binding since the date of the delay.

GOAL

7.       The purpose of inspectors in applying these standards is to:

A.      To plan a quality inspection in order to be implemented efficiently and effectively;

B.      Designing and implementing inspection procedures to obtain adequate and precise evidence.

DEFINITION

8.       For this standard purpose, the terms below mean the following:

A.      Strategic planning is the process of drafting a vision and mission that is arranged by CPC every 5 (five) yearly period and contained in the Strategic Plan document (Renstra). Renstra contains the vision and mission of BPK which will be achieved within a period of 5 (five) years, and among other things, the policy and audit strategies are prioritized.

B.      Assignment planning is a process that includes the determination of the overall inspection strategy and development of the inspection plan.

C.      Internal control is a process designed, implemented, and monitored by entity leaders and personnel who are responsible for entity governance to provide adequate confidence in the achievement of entity objectives.

D.      Risk of inspection is the risk of the possibility that the findings, conclusions, and/or recommendations of the examiner are incorrect or incomplete, as a result of factors such as insufficient and/or improper evidence, examination procedures deliberate negligence or misleading information.

E.       The purpose of examination is related to the implementation of an examination. Specifically, the inspection objectives will determine the type of examination.

F.       Scope of inspection is a clear statement of focus, breadth, and limitation of examination.

G.     Criterion is the benchmark used in examining and assessing the subject matter, in which case the information disclosed in the financial management and accountability of the state, including the benchmark of the presentation and the relevant disclosure.

H.      The quotation test is the selection of several elements in a population as the basis for taking conclusions on the entire population.

I.        The population is the entire data that is the source of the sample to be selected, where the examiner wishes to draw conclusions from the entire data.

J.        The risk of quotation test is the risk that the examiner conclusion based on the selected sample differs from the conclusion when the same examination procedure is applied to the entire population.

K.      Supervision is an activity that includes giving instructions and guidance to the examiner during the inspection to ensure the achievement of inspection objectives and fulfillment of examination standards while still receiving up-to-date information on issues Significant confronting.

L.       Business continuity (going concern) is the assumption that an entity is seen to persist in its duties and functions or business for a predictable future.

M.    Preliminary indications of cheating are signs that indicate the possibility of cheating.

Conditions

Planning

9.       CPC and Examiner must carefully plan inspections.

10.   CPC must make strategic planning to fulfill the implementation of stakeholders ' inspection and expectation expectations.

CPC inspection relationships with strategic planning

11.   CPC must be guided to Renstra CPC in drafting annual examination plan. In performance checks and PDTT, inspectors must determine the subject matter to be examined. The examiner must set the underlying factors for consideration in determining the subject matter. (Ref: Para. A1-A2)

Assignment planning

12.   The examiner shall clearly state the purpose of inspection of the subject matter or subject matter to be examined.

13.   Examiner must ensure the clarity of any inspection assignments made. (Ref: Para. A3

14.   The examiner must obtain an understanding of the entity and/or subject matter/information that is examined as necessary to identify the problem, determine the materiality, risk, type and source of evidence, as well as the auditability. (Ref: Para. A4-A6)

15.   Examiner must obtain adequate understanding of internal control using professional consideration. (Ref: Para. A7-A9)

16.   Examiner must assess and respond to inspection risks with

Use professional considerations. (Ref: Para. A10-A11)

17.   Examiner must identify and measure material risks as a result of fraud.

18.   The examiner must update the assessment and response to such risks throughout the inspection process using professional consideration.

19.   The examiner must devise adequate procedures to obtain adequate and viable evidence of the risk of fraud that has been identified.

20.   The examiner must set the appropriate criteria as the basis for assessing the subject matter or information of the subject matter examined. (Ref: Para. A12-A15)

21.   Examiner should consider materiality throughout the entire inspection process using professional considerations. (Ref: Para. A16-A17)

22.   The examiner should update the assessment of materiality throughout the inspection process based on the risk assessment by using professional considerations.

23.   In the financial checkup, the examiner should consider the business continuity (going concern) and the events occurring between the date of the financial statement and the date of the LHP. (Ref: Para. A18

24.   The examiner must update the inspection plan if necessary during the inspection process.

Acquisition of evidence

25.   The examiner must design and implement appropriate inspection procedures to obtain adequate and precise inspection evidence. (Ref: Para. A19

26.   The examiner must implement a procedure that has been designed to obtain adequate and reasonable inspection evidence for the risk of fraud that has been identified.

27.   The examiner must determine the overall response if found an initial indication of fraud/indication of fraud in the examination.

28.   The examiner should consider the adequacy and exactness of the evidence in identifying potential data sources derived from the inspected entity, Examiner's analysis results, or other parties. (Ref: Para. A19

29.   The examiner must conduct a deepening if the acquisition of evidence, the examiner suspects that the document is not authentic or the contents of the document have been modified but not informed to the examiner.

30.   The examiner must modify the necessary inspection procedures if evidence of inspection obtained from a single source is conflicting or inconsistent with evidence obtained from other sources or the examiner has doubts over the reliability Information to be used as proof of examination.

31.   The examiner may obtain evidence by using an exam quotation test to provide an adequate basis for the examiner to draw conclusions.

32.   During the inspection process, the examiner must review the adequacy and accuracy of the evidence and connect it with the inspection purpose and respond by analyzing the need to modify the examination procedure. (Ref. Para. A20)

Development findings

33.   Examiner must develop inspection findings when it finds inconsistency between conditions and criteria.

34.   The checker should consider the element of the findings consisting of conditions, criteria, consequences, and causes in developing the findings of the examination. However, the required element for an examination findings depends on the examination purpose. (Ref: Para. A21

35.   The examiner may make inspection findings to fulfill inspection purposes in order to draw conclusions and/or recommendations. (Ref: Para. A22

36.   If you find an indication of initial fraud, the examiner must follow up with the initial indication in accordance with the provisions. (Ref: Para. A23

Supervision

37.   The examiner must be well-supervised. (Ref: Para. A24-A27)

OTHER APPLICATION MATERIALS AND EXPLANATIONS

The CPC examination relationship with strategic planning (REF: Para. 11)

A1. An understanding of the Renstra is necessary to provide strategic direction in the preparation of annual inspection plans, assignment expectations, and inspection purposes.

A2. Factors that are the basis of consideration of fundamental determination, among others, the expectations of the community and materiality of a fundamental thing.

Assignment planning

A3. Information that needs to be understood, among others, the subject matter/information subject to be examined, the scope and purpose of inspection, access to data needed, the report to be generated, the inspection process, the contact party during and responsibilities of all parties in respect of the examination. (Ref: Para. 13)

A4. Understanding of the entity and/or the subject matter/information of the subject matter examined can be obtained from the knowledge that the examiner has for the entity and/or the subject matter/information subject matter and the results of the collection of information During the inspection. (Ref: Para. 14)

A5. Understanding of the entity and/or key points/information of the subject matter examined may be obtained by considering the results of the previous inspection, including the results of understanding of internal control, risk assessment, and findings Examination. (Ref: Para. 14)

A6. Understanding of the entity and/or key points/information on the subject matter

The examination relies on the knowledge of the inspectors control

A7. The understanding of internal controls covers the relevant internal control conditions both from the time and substance with the examination or material nature of the subject matter/information subject matter. (Ref: Para. 15)

A8. Understanding of the entity and its environment and the understanding of internal controls relevant to the examination or material nature of the subject matter/information subject matter, will be related to the risk assessment process, including the assessment Risk of cheating and dissolution.

A9. Professional considerations are used to determine whether a control individually or together with another is relevant to the examination or material nature of the subject matter/information subject matter. (Ref: Para. 15)

A10. Assessments and responses are carried out taking into account the inherent risk, risk of control, and risk of detection associated with the entity and the subject matter/information subject matter examined. (Ref: Para. 16)

A11. The examiner acquires an understanding of internal control systems relevant to the examination, including the risk management that the entity has inspected and adequate or whether it is managing the risk in support of the achievement Organizational objectives.

A12. The determination of the criteria is influenced by the subject matter/information subject matter examined and the purpose of examination. The criteria in the financial checkup are formal, i.e. accounting standards which is the financial reporting framework used by the financial statement compilers. (Ref: Para. 20)

A13. In performance checks, if there is no formal source of criteria in accordance with the draft inspection purpose, the examiner can develop inspection criteria based on specific sources and be disclosed transparently. (Ref: Para. 20)

A14. In the performance check and PDTT with the form of compliance check, when the examiner identifies a conflict between several sources of criteria used, the examiner must analyse the consequences of the opposition.

A15. If based on professional consideration the examiner decides to select one of the criteria sources, the checker should reveal the conflict of source criteria and the reason for selecting a particular criteria source in the LHP. The examiner may give consideration to the Government on issues of conflict source criteria. (Ref: Para. 20)

A16. Something can be assessed as material if knowledge of it may affect the decision-making by the LHP user. Materiality covers quantitative and qualitative aspects. Materiality considerations influence decisions about the nature, timing and breadth of inspection procedures and evaluation of inspection results.

A17. Things that are professional considerations in determining the level of materiality, among others, the needs of LHP users, such as attention from stakeholders, public interest, and impacts for the community; Congenital characteristics of a matter or a group of things; The context of a matter of occurrence; and statutory requirements. (Ref: Para. 21)

A18. The examiner must obtain adequate and appropriate evidence of inspection to identify any events or conditions that may cause significant doubts over the ability of the inspected entities related to business continuity (going concern) as well as Events that occur between the date of the financial statement and the date of the LHP requiring adjustments or disclosures in the financial statements that have been identified. (Ref: Para. 23)

Acquisition of evidence

A19. Inspectors can obtain data and information by conducting observations, interviews, surveys, and measurements. In determining the data acquisition method, Examiner uses professional considerations.

A20. The adequacy of evidence is based on the assurance Checker that evidence results in a reliable conclusion. (Ref: Para. 32)

APPENDIX IV

REGULATORY BOARD OF FINANCIAL AUDIT REPUBLIC OF INDONESIA NUMBER 1 YEAR 2017

STATE FINANCIAL EXAMINATION STANDARDS STATEMENT OF STANDARD EXAMINATION 300

STATEMENT OF STANDARD EXAMINATION 300

STANDARD REPORTING CHECKS

INTRODUCTION

Scope

1.       This PSP governs the obligation examiner in drafting the LHP for financial inspection, performance inspection, and PDTT.

2.       LHP serves to: (1) communicate the results of the examination to the competent authorities based on the prevailing laws and regulations; (2) Avoiding misunderstanding over the examination results; (3) Make the results of the examination as an ingredient for corrective action by the responsible party; and (4) facilitate follow-up monitoring to determine the effect of appropriate corrective action.

Effective Date

3.       This PSP is valid and has the legal force binding since the date of the delay.

GOAL

4.       The purpose of inspectors in implementing this reporting standard is to:

A.      Formulate a conclusion of the test result based on evaluation of the evidence of the examination obtained;

B.       Communicate the inspection results to the relevant parties.

DEFINITION

5.       The terms in this standard mean the following:

A.      LHP is a written report of the examination process that contains the results of the analysis of the test evidence obtained during the implementation of the examination.

B.      LHP users are the parties who use the LHP CPC, among others, representatives institutions, Governments, and other parties who have an interest in the LHP.

C.      Conclusion is a logical interpretation of the subject matter/information subject matter based on the results of evidence testing and not merely a summary of the findings.

D.      Recommendations are suggestions from the examiner based on the results of the test, addressed to the person and/or body authorized to perform actions and/or repairs.

Conditions

The necessity of compiling reports

6.       The examiner must compile the LHP in writing to communicate the results of its inspection.

7.       The examiner must compile the LHP in a timely, complete, accurate, objective, convincing, clear, and concise manner. (Ref: Para. A1-A7)

Elements of LHP

8.       LHP must fulfill the report element according to the type of test. Elements of LHP include:

A.      Statement that the examination is carried out in accordance with the examination standard;

B.      Objectives, scope, methodology;

C.      Conclusion;

D.      Inspection findings;

E.       Inspection recommendation;

F.       The response of the responsible party;

G.     Signing of LHP.

Statement that the examination is conducted in accordance with the examination

9.       The examiner must declare that the inspection is conducted in accordance with the inspection standards. 

Objectives, SCOPE, methodology

10.   The examiner must clearly contain the purpose, scope, and methodology of inspection within the LHP. Information is important to LHP users in order to understand the intent and type of inspection and provide a reasonable perspective on what is reported. (Ref: Para. A8-A10)

Conclusion

11.   Examiner must draw conclusions on inspection results. Conclusion is the answer to the achievement of inspection objectives. (Ref: Para. A11-A12)

12.   Conclusion should be expressed clearly and conclusively. 

Inspection findings

13.   The examiner must disclose the findings in the LHP if there is a discrepancy between the conditions and criteria. (Ref: Para. A13

14.   Inspection findings containing preliminary indications of fraud are presented in the LHP without explaining in detail the alleged fraud.

Examination recommendation

15.   Inspection recommendation must be constructive and useful to correct the weaknesses found in the examination. (Ref: Para. A14-A15)

16.   Examiner must provide recommendations in performance checks. In addition to performance checks, if inspectors can adequately develop inspection findings, the examiner may make recommendations. Specifically on PDTT in the form of investigative investigations, the examiner does not provide recommendations. Responsible party response (REF: Para. A16)

17.   The examiner must obtain a written response to the results of the inspection of the responsible party. However, regarding the confidentiality of information, in the form of an investigative examination, the examiner does not solicit responses.

18.   The checker must contain responses to government officials responsible for the findings, conclusions, and recommendations of the Examiner on the lLHP.

LHP signing

19.   LHP signed by the Chairman, vice chairman, or member of the CPC. The signing authority of LHP can be delegated to the responsible examination of the competency.

Confidential Information reporting

20.   If certain information is forbidden to be disclosed to the public, the LHP must disclose the nature of the disclosed information and provisions that prohibit the disclosure of such information. The reviewer's consideration of the disclosure of certain information should be in reference to the legislation.

Publication and distribution of reports

21.   The CPC must submit the LHP timely to the representative institution, the responsible party, and the other party authorised to receive the LHP in accordance with the provisions of the legislation.

22.   In the event that the checked is confidential information then the distribution of LHP can be limited.

23.   Information obtained through PDTT in the form of investigative examination is confidential information.

Follow-up test result monitoring

24.   CPC monitors periodic follow-up of test results and conveys

25.   The results of its support to the representative agency and the responsible party. The purpose of monitoring the follow-up results is to improve the effectiveness of the examination results reporting and to assist representatives and government agencies in improving governance.

OTHER APPLICATION MATERIALS AND EXPLANATIONS

Necessity to compile a report (REF: Para. 7)

Timely manner

A1. The LHP must be timely in order for maximum useful information. The reports are carefully crafted but are late delivered, whose value becomes less for LHP users. Therefore, the examiner must properly plan the publication of the report and perform the examination on the basis of the thought.

Complete

A2. The LHP must contain all the information of the evidence required to fulfill the inspection purpose. The LHP must also adequately present details of the information needed in order to provide a sufficient understanding of the user for the review, findings and conclusion of the examiner.

Accurate

A3. LHP must be accurate in presenting the information, supported by adequate and precise evidence. Accurate reporting will give confidence to the LHP users that the reported subject is credibility and reliability.

Objective

A4. LHP should be objective. The examiner should pay attention to the following:

A.      The examiner must present the LHP in a balanced and impartial position;

B.      The examiner must present the LHP in accordance with the facts encountered in the field.

Convince

A5. LHP should be convincing. In order to convince, the LHP must present a logical relationship between the purpose of inspection, criteria, findings, conclusions, and recommendations (if any). 

Clear

A6. LHP should be clear that is easy to read and understand. The checker should write reports in clear, unambiguous, simple, and to avoid using technical terms as possible. 

Concise

A7. LHP should be concise that it does not contain unnecessary or unnecessary information according to the inspection purpose. 

Elements of LHP

Purpose, scope, methodology (REF: Para. 10)

A8. The purpose of the inspection reveals what it wants to achieve from the inspection.

A9. The scope of the inspection includes identifying object/target checks, aspects examined, the organization, geographical location, and the period covered in the examination.

A10. The methodology illustrates the entire examination process to meet the inspection objectives. If the examination is used by experts, the use of such experts must be disclosed in the LHP.

Conclusion (Ref. Para. 11)

A11. The examiner gives conclusions on inspection objectives. Special financial checks, the examiner expressed conclusions in the form of opinion.