Professionalism and Integrity of BPK Pre Audit Reform

6.2.2 Professionalism and Integrity of BPK Pre Audit Reform

Before audit reform, BPK auditors lacked professionalism and integrity. BPK recruited auditors with different educational backgrounds (from accounting, economics, law, sport and literature) that were not based on the goals and needs of the organisation. In addition, BPK personnel had very limited opportunities to improve their professionalism

The Centre of Training and Development of BPK was not managed effectively and professionally. One example is that with training and education courses, auditors‘ qualifications were never tested before or after the course (Soedibyo 2004:12-14). This meant that there was no evaluation after training delivery and the results of a training and education program were never reviewed for further action, such as: for the benefit and impact on audit quality, and for rewarding the outstanding trainers for better position in his/her career and development. As a result, BPK‘s auditors and other personnel had little motivation to take up training courses (Seno 2004a:4-6) and as a result the quality of BPK auditors and staff grew very slowly (Priyono 2004:8-11). BPK auditors (13-15 March 2007) support this, arguing that trainers from the centre of training and education were very unqualified and that the trainers and materials offered little help to auditors in improving their competencies.

In terms the backgrounds of BPK auditors, they were divided into two groups (Yoedono 2003:16-17). The first group was auditors who audited state-owned enterprises (SOEs) and regional-owned enterprises (ROEs) was, in general, called an ‗accountant‘. All auditors with a background in accountancy are under the professional organisation of the Indonesian Accountant Association (IAI), which was developed alongside the implementation of the Code of Ethics and accountancy professional standards. The second group is auditors without a background as accountants also have an ‗umbrella‘ organisation of their own, a professional association called the Indonesian Auditors‘ Association (IAuI). This association did not develop as well as IAI and lacked both an auditors‘ code of ethics and audit standards.

The above situation means that in the past, BPK had no formal rules in the form of a code of ethics for its own BPK personnel, though auditors who were Members of IAIwere The above situation means that in the past, BPK had no formal rules in the form of a code of ethics for its own BPK personnel, though auditors who were Members of IAIwere

A key informant from BPK (Interview B25, a trainee in Centre of Education and Training of BPK) described the problems faced by BPK in relation to its professionalism and integrity. He emphasised that in the past BPK provided low salaries, lacked a clear audit manuals and technicalaudit guidelines for different types of audits, and did not have enough budgetto improve the quality and professionalism of its auditors. On the other hand, the risks faced by auditors were high as they need to: deal with not properly behavior of auditees, conduct auditing in a very remote location (such as auditing in the middle of the Kalimantan forests).

This interviewee found that the integrity of BPK auditors were significantly reduced by highrisk audits, low salaries, a strong bureaucratic culture with promotion based on seniority instead of performance, and a lack of opportunities and budget for developing auditor ‘s professional development. This argument was supported by LP3ES (Economic and Social Research, Education and Information Agency) (2003:22-27), which argued that BPK could not provide professional and competent auditors as expectedif their income was too low. Moreover, BPK could not recruit newly qualified auditors if salaries were too low.