Survey Results and Comments on Strong Audit Evidence

4.2.2 Survey Results and Comments on Strong Audit Evidence

Figure 4.2 (below) presents respondent‘s perceptions on strong audit evidence used in BPK reports. Out of the total129 respondents, 85 per cent ‗agreed‘ and ‗strongly agreed‘ that BPK auditors use ‗strong evidence‘ in auditing. Of 78 auditors, 88 per cent responded Figure 4.2 (below) presents respondent‘s perceptions on strong audit evidence used in BPK reports. Out of the total129 respondents, 85 per cent ‗agreed‘ and ‗strongly agreed‘ that BPK auditors use ‗strong evidence‘ in auditing. Of 78 auditors, 88 per cent responded

Figure 4.2 Survey Results of ‘Information in Audit Reports is Supported by Strong Evidence’

s tage rc en

Strongly Agree

Strongly Disagree

Pe rce ptions

Auditors

Auditees

Overall responses

Source: Fieldwork survey from 5 th November 2006 to 25 th March 2007 in Indonesia

Auditees provided a positive perception, since the new Law on BPK (GOI 2006b)requires auditees to be more transparent and accountable in presenting their reports and providing all the data and information needed by BPK auditors. Three auditees pointed out the importance of strong evidence for auditors as follows

 “The audit report is the result of objective auditing that was supported by valid and accurate information ” (Interview A7).  “Valid, accurate and reliable information is the basic standard of the auditing

work to provide an objective and accountable audit report ” (Interview A5).  “As far as the audit findings are based on evidence, the audit findings are objective ” (Interview A8).

These comments implied that auditees understand the importance of evidence in auditing. Moreover, they also positively support the data collection required by auditors.

On the other hand, few respondents responded negatively. About 10 per cent were neutral and only 5 per cent disagreed that BPK used strong audit evidence in reporting audit information. A key informant from a non-government organisation (Interview F1) provided the following opinion about the lack of power auditors have to access data and information during auditing:

BPK needs power and more authority to get any kind of data from any department. Any single cent of state finances shall be reached by BPK. When BPK conducted auditing at the Ministry of Finance or other ministries, every cent of the state money shall not be hampered by anyone. So, they could not hamper BPK auditors during auditing. Although as mandated by the Constitution, BPK is an independent audit institution and free from any influences of government, other parties, and other institutions, before the new Law on BPK (2006), BPK had no power to access valid and accurate data or information for auditing.

This quotation points out that BPK cannot access reliable and accurate data or information from auditees because of the lack of transparency in the public sector. The key informant emphasised how powerless BPK is in accessing data and information from the Ministry of Finance and the weaknesses of BPK in accessing accurate data and information prior to the passing of the Law on BPK (2006). The Chairman of BPK, speaking in front of Parliament stated, ―BPK had no power to seal, search and seize documents and other related items necessary for auditing and inspection ‖ (Nasution 2005b). This statement indicatesthe lack of power BPK has in accessing public sector agencies before the issuing of the Law on BPK (2006).

Some criticisms from auditors about difficulties in accessing data and information from auditees are as follows:

 “Auditors had difficulty in getting sufficient valid and accurate information from auditees ”(Interview B17, an auditor of AKN I).  “Not all auditing work was supported by accurate and valid information” (Interview B19, an auditor of AKN II).

 “BPK had no access in computer systems of auditees and using electronic data ”(Interview B18, an auditor of AKN I).

These excerpts show dissatisfaction from auditors about the data and information made available for auditing. In addition, in line with the transformation of public administration from paper based to electronic data and information, auditors found that they had no free access to the electronic data.

According to the Chairman of BPK, some regulations still impeded and limited the power of BPK auditors in accessing data and information for auditing, such as information related to tax revenues, official foundations and SOEs entering the stock market (Bisnis

Indonesia th 12 March 2007). In a statement to a national newspaper, the Director of Institute for Development of Economic and Finance (INDEF), Fadhil Hasan, also pointed

out tax revenue that could not be audited by BPK (Kompas 13 th March 2007):