Board of Commissioners BoC

22 controlling shareholders, as well as free of a business relationship or other relationship that could affect its ability to act independently or act solely in the interest of the company Task Force National Committee Corporate Governance Guidelines of the Independent Commissioner, p.2 According to Bapepam Regulation No. Kep. 29 PM 2004 dated 24 September 2004, the board of the Independent Commissioners are: a. Comes from outside the Issuer or a Public Company, b. There are no shares either directly or indirectly in the Issuer or a Public Company, c. There are no affiliated with publicly listed companies, directors, or major shareholder of the issuer or public company, and d. Does not have a business relationship, directly or indirectly related to the business activities of the Issuer or a Public Company. The tasks to be carried out by an independent board is: a. Ensure that the company has an effective business strategy, including monitoring the schedule, the budget and the effectiveness of the strategy. b. Ensure that the company raised the executives and managers of professional managers. c. Ensure that the company has the information, control systems, and audit system that works well. 23 d. Ensuring that the company complies with applicable laws and regulations as well as the values set by the company in running its operations. e. Ensuring risks and potential crisis is always identified and managed properly. f. Ensuring the principles and practices of good corporate governance are adhered to and implemented well among other things include: 1 To ensure transparency and openness of the companys financial statements. 2 The treatment is fair to minority shareholders and other stakeholders. 3 Disclosure of transactions which contain conflict of interest in a reasonable and fair. 4 Compliance firm on legislation and regulations. 5 Ensure accountability organ of the company.

4. Audit

a. Definition of Audit

Definition audit by Arens and Loebbecke 2010: 4 are as follows: “Auditing is the process by which a competent, independent person accumulates and evaluates evidence about quantifiable information related to a specific economic entity for the purpose 24 of determining and reporting on the degree of the correspondence between the quantifiable information and established criteria.” Boyton and Johnson 2006: 6 state that The Report of The Committee on Basic Auditing Concept of The American Accounting Association Accounting Review, Vol.47 stated auditing as : “Auditing is a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and event to ascertain the degree of correspondence between those assertions and established criteria and communicating the result to interested users.” Definition of auditing according Agoes 2008: 3 are: “suatu pemeriksaan yang dilakukan secara kritis dan sistematis, oleh pihak yang independen, terhadap laporan keuangan yang telah disusun oleh managemen, beserta catatan-catatan pembukuan dan bukti-bukti pendukungnya, dengan tujuan untuk memberikan pendapat mengenai kewajaran laporan keuangan tersebut .” Meanwhile, according to Mulyadi 2010: 9, the definition of auditing is: “suatu proses sitematik untuk memperoleh dan mengevaluasi bukti secara objektif mengenai persyaratan-persyaratan tentang kegiatan dan kejadian ekonomi, dengan tujuan untuk menetapkan tingkat kesesuaian antara persyaratan-persyaratan tersebut dengan kriteria yang telah ditetapkan, serta penyampaian hasil-hasilnya kepada pemakai yang berkepentingan .” Based on the description above definition of auditing, it can be concluded that auditing is a process of examination of the systematic of the evidence relating to the events of economic business recorded in the financial statements of the auditee to