How The Audit Process?

In the financial world may already be familiar with the name of the audit. because of the company within a certain period will be audited financial statements of the company. Audit or investigation in a broad sense meaningful evaluation of an organization, system, process, or product. Audits conducted by the competent, objective, and impartial, called auditors. The goal is to verify that the subject of the audit has been completed or run in accordance with standards, regulations, and practices that have been approved and accepted.

Audit Process: 

Audit in the context of information technology is to check whether the computer system running properly. Seven-step audit process:

1. Implement a strategy of risk management-based audit and control practices that can be agreed by all parties.
2. Set the steps detailed audit.
3. Use facts / material evidence sufficient, reliable, relevant, and useful.
4. Make the report and its conclusions based on facts collected.
5. Examine whether the audit objectives achieved.
6. Present reports to interested parties.
7. Ensure that the organization implements risk management and control practices.

Before running the audit process, of course, the audit process should be planned in advance. Audit planning (planning the audit) should clearly explain the purpose of the audit, the authority of auditors, the approval of higher management, and audit methods. Audit methodology:

• Audit subject. Determine what will be audited.

• Audit objective. Determining the purpose of the audit.

• Audit Scope. Determining the system, function, and part of an organization that is specific / particular will be audited.

• Preaudit Planning. Identify resources and human resources that are needed, determine what documents are needed to support the audit, determine the location of the audit.

• Audit procedures and steps for data gathering. Determine how to conduct an audit to examine and test control, determining who would be interviewed.

• Evaluation results of the testing and inspection. Specific to each organization.

• Communication procedures with management. Specific to each organization.

• Audit Report Preparation. Determine how to inspect the results of the audit, namely the evaluation of the validity of the documents, procedures, and policies of the organization being audited.

 

The structure and content of audit reports are not standard, but generally consist of:

1. Introduction. The purpose, scope, duration of the audit, the audit procedures.
2. General conclusions of the auditors.
3. Audit results. What was found in the audit, whether the procedures and controls are not feasible or
   Recommendations. The response from management (if necessary).
4. Exit interview. Last Interview between auditors with management to discuss the findings and recommendations follow. At once to convince the management team that the audit results valid.

So, the audit is very important to minimize the risk of benefit fraud and error within an organization or company to run, as appropriate, procedures or standards set.

What is The Basel Accord?

Maybe for you who daily engaged in the banking world are already familiar with the name Basel Accord. Yes, Bassel Accord is an International Standard which is used as the basis for the State to regulate the amount of bank financing in order to face the financial and operational risks that may arise. Basel Accord refers to the banking supervision Accords (recommendations on law, banking law and regulations). The Basel Committee comprises representatives from central banks and regulatory authorities of the G10 countries, as well as other countries (especially Luxembourg and Spain). The Committee recommendation does not force-rekimendasinya, although kbanyakan Member States tend to implement kabijakan-policy committee. This means that recommendations are implemented through the laws and regulations of national (or EU-wide), rather than as a result of the recommendations of the committee - although sometimes be among the recommendations and implementation of the law at the national level.

Basel Accord was created by the Basel Committee on Banking Supervision to avoid the problems encountered during the liquidation committee Herstatt Bank in Frankfurt in 1974. Liquidation is problematic because there are deals to New York left at the bank is liquidated. This occurs because of differences in time zones so that when the bank is liquidated, the transaction is unresolved. This encourages the countries of the G-10 established the Basel Committee on Banking Supervision.

Basel Committee on banking supervision to provide a forum for regular cooperation on banking supervisory matters. The goal is to increase understanding of key supervisory issues and improve the quality of banking supervision globally. The Committee tried to do by way of exchange of information on national supervisory issues, approaches, and techniques with a view to promoting common understanding. At this time, the committee uses common sense to develop the guidance (guidelines) and supervisory standards in areas where they are considered. Based on this, the committee's most recognizable because of international standards on capital adequacy (capital adequacy), the basic principles for effective banking supervision, and the concordat (harmony) in banking supervision across boundaries.

Committee members come from Belgium, Canada, France, Germany, Italy, Japan, Luxembourg, Netherlands, Spain, Swediam, Switzerland, UK and U.S.. Countries represented by their central bank and also Authoritative with formal responsibility for supervising the prudential principles of banking business that is not a central bank. Committee chairman at the moment is Mr. Nout Wellink, president of Bank of the Netherlands.

The Committee encourages the various contacts and cooperation among its members and other banking supervisory authorities. The results are presented to the inspectors all over the world both in publications and in which there is no hint in banking supervision. Various contacts have been strengthened by an International Conference of Banking Supervisors (ICBS) held every two years.

Committee secretariat housed at the Bank for International Settlements in Basel, Switzerland, and its staff mainly from the professional supervisor with a temporary secondment from member institutions. Furthermore the implementation of the work, the secretariat of the committee and sub-committee of experts, ready to give advice to the various regulatory authorities in all countries. Mr Stefan Walter is the secretary general of the Basel Committee. (Geraldine Megan Tauran)

Until now there have been two standards of Basel I and Basel II standards that enhance coverage in Basel I.

1. Basel I, focused on the credit risk of the bank where the assets are classified in five categories depending on credit risk. Basel II was created with a more standard that is believed to contribute to keep the international financial system from problems that may arise if there is a fall of one or several large banks.
2. Basel II, uses 3 concepts, 1. minimum capital requirements, 2. assessment monitoring, and 3. market discipline.
   Basel I also use the three concepts above, but not all parts of the concepts used so incomplete, like the concept of minimum capital requirements, Basel I only consider the credit risk and market risk and the risk of passing operations.

Source of: http://www.wealthindonesia.com

The Differences of Cost and Expense

Maybe today there are still not able to distinguish notion of "Cost" and "Expense" . Most people mentioned that the second term is the same sense but in fact these two terms have different meanings. This happens simply because there is no equivalent word for the term "cost".

People (especially Indonesia) already understand a misconception for example the term "Cost of God Sold" is defined as Cost of goods sold while the "Cost of Labor" is defined as the cost of labor. Means "cost" here means the price and also the cost. While the notion of accounting "cost" was not price or cost.

Cost and Expense are two different things. Let's look at an example of this issue to differentiate.

If you reserve the booking business making bags from fabric. One day there are customers who book bag as many as 100 pieces. The next day you buy the fabric as much as 75 meters. To create 1 piece of cloth bags as much as 0.5 meters is required. Price a meter of fabric is a 4 U $ D. Thus you spend money to buy fabric is 300 U $ D. You will use the fabric as much as 50 meters to make 100 bags. The rest you store in the warehouse for supplies.

In this example, Cost $ 300 U $ D consisting of the Expense of 200 U $ D and Assets  (Inventory) 100 U $ D.

In this example can be concluded that the "Accountants use the term to mean a cost expense That has being used up while a company is doing its main revenue-generating activities".

A Cost Not necessarily become an Expense. As we saw above, Cost $ 300 U $ D was composed of 200 U $ D as an expense and 100 U $ D as an asset.

Perhaps the most extreme example is when we buy land to run a business. Then the cost of land will only be recorded as an asset and will not be an expense because the land can not be depreciated.

Likewise, when we buy a machine for example for a factory, in balansheet cost of the machine will be recorded as an asset (Machine), but over time, the cost would be an expense because it would depreciate the machine when used in running the business and it was depending on what method of calculating depreciation.

While the burden has meaning to something that should be covered (as if the revenue obtained first, and because getting the revenue we have to bear the burden). Understanding Expense (cost) here in line with what is listed in the definition of the elements of financial statements in GAAP.

Fraudulent Financial Accounting Becoming a Trend

We may often hear especially financial fraud in the recent case of fraud or corruption in corporations or government agencies are popular even in our own country Indonesia. In the USA accounting fraud has become widespread. Spathis (2002) explains that in the USA accounting fraud causing enormous losses in almost all industries. The disadvantage of accounting fraud in the stock market is declining accountability of management and make shareholders increase the monitoring of the management fee. In general, accounting fraud related to corruption. In corruption, including actions commonly done is to manipulate the recording, the removal of documents, and mark-up is detrimental to state finance or economy. This action is a form of accounting fraud.

Indonesia is among countries with the highest world ranking of corruption (Transparency International, 2005). In Indonesia, accounting fraud evidenced by the liquidation of some banks, filing of state and private management to the courts, banking crimes, tax manipulation, corruption in the election commission, and parliament. Despite the alleged accounting fraud has been for years, but in Indonesia there has been theoretical and empirical studies in a comprehensive manner. Therefore this phenomenon is not enough just to be studied by the science of accounting, but need to involve other disciplines.

The rise of financial reporting fraud cases to make us realize that we must act to resolve the issue so as not rampant. Combating fraud is done not only to institutions or high-ranking officials into the spotlight of public companies are now but also harrus from lower or bottom layer organization Settlement fraud but this still does not show significant results.

The effectiveness of legal provisions can not be achieved if not supported norms and value ethics from stakeholders. In the context of an organization, ethics and moral values individual must appear as the organization's ethics rules that have been codified as a code of ethics and completeness.

Fraud (cheating) itself in general is an act against the law committed by people from within or outside organization, with intent to gain personal profit or group that directly harm others. Simply that the fraud was deliberate mistakes.

Whereas According Alison (2006) in article entitled Fraud Auditing defines cheating (Fraud) as form scams deliberate conducted which cause losses unwittingly by losers and benefit perpetrator cheating. Fraud usually occurs because of pressure to perform fraud or encouragement to take advantage of opportunities that exist and the justification (generally accepted) of the act.

IAI (2001) describes the accounting fraud as:

1. One serving of arising from fraudulent financial reporting that misstatements or deliberate              omission or a number of disclosures in the financial statements to fool users of financial statements

(2) One serving arising from 12 improper treatment of assets (often referred to as abuse or fraud) relating to the theft of assets of the entity resulting financial statements not presented conformity with generally accepted in Indonesia.

The results of research on accounting fraud, showing that accounting fraud is influenced by the level of corruption in a country (Sheifer) and Vishny (1993), Gaviria (2001)]. The results Mayangsari and Wilopo 13 (2002) proved that the internal bureaucratic influence on governmental accounting fraud. That is, the better the internal control bureaucracy, the lower the level of government accounting fraud.

According to Alison (2006) in an article titled Fraud Auditing of financial reporting fraud perpetrators are classified into two, namely:

a. Management for the enterprise, namely misstatements arising from fraudulent financial reporting (misstatements arising from fraudulent financial reporting). Cheating financial reporting usually done due encouragement and expectations against achievement management work. Misstatements arising from fraudulent financial reporting, better known as irregulatities (irregularities). Forms of cheating like this is often called the fraud management (management fraud), such as: manipulation, falsification, or alteration of accounting records or supporting documents that are a source of financial statement presentation, deliberate in any present or deliberately removed (intentional omissions) of a transaction, occurrence , or important information from financial statements.

b. Employees for individual profit, which is a form of abuse misstated assets (misstatements arising from misappropriation of assets). Cheating this type usually called cheating employees (employee fraud). Misstatements stemming from misuse of company assets include embezzlement of assets that do not result in financial statements prepared in conformity with accounting principles generally accepted. Embezzlement of assets is generally performed by employees who are facing financial problems and do kartena saw an opportunity to weaknesses in internal controls and the company's justification for such action. Examples of these types of misstatements are:

• Embezzlement of cash receipts.
• Theft assets firms.
• Mark-ups price.
• The transaction is not official.
• By a party outside the company, ie customers, business partners and foreign parties which may result in losses for the company.

Linkage GAAP with FASB

GAAP stands for Generally Accepted Accounting Principles. GAAP is a combination of authoritative standards established by board policy Iyang) and just generally accepted ways of recording and reporting accounting information. 

The origin of Generally Accepted Accounting Principles and body issued Financial Accounting Standards Board (FASB) can be traced to the Securities Exchange Commission (SEC) in major depression. The main purpose of the Securities Exchange Act is to restore and rebuild investor confidence in the integrity of capital markets. SEC is given authority to prescribe accounting principles and procedures for companies under its jurisdiction. 

The role of established GAAP and then transferred to the Financial Accounting Standards Board (FASB), an independent board that is specially made in 1973. The goal is to develop financial standards and reporting akuntasn that will help maintain user confidence in the financial statements. This goal will be met primarily to establish the credibility of reported financial data. Statement issued FASB body known as U.S. GAAP.

FASB makes accounting rules, but the SEC to force them. SEC retain the power to establish GAAP, accounting practices and imposed a moratorium on even rejected the claim of private sector if there is no reason to disagree with the FASB. 

U.S. GAAP is the standard business that builds credibility by applying a uniform set of rules and practices when reporting financial data.Without the financial reporting standards, will be very difficult for lenders, investors and other users of financial statements to compare and assess the actual financial condition of the company. 

A statement issued by the FASB as it affects most businesses in the United States is becoming more important because the FASB proposes major changes. 
FASB own mission is to establish and improve standards of accounting and financial reporting for the guidance and public education, including issuers, auditors and users of financial information. 


FASB is not a government agency. The SEC has the legal authority to set accounting standards and financial reporting for public companies held by the Securities Exchange Act of 1934. Throughout history, however, the Commission has relied on the policy the private sector for this function to the extent that the private sector demonstrated the ability to fulfill responsibilities in the public interest.

FASB is part of the structure that is independent of all other business and professional organizations. Before this structure was created, financial accounting and reporting was first established by the Committee on Accounting Procedure of the American Institute of Certified Public Accountants (1936-1959) and later by the Accounting Principles Board, also part of the AICPA (1959 -1973). Statement predecessor bodies remain in effect unless amended or superseded by the FASB. 

Gold's Growing Up

  Gold prices are now beginning to continue creeping up to make more people invest in gold because it is considered safer and more profitable. Gold price in world market continue to create a record, which had penetrated the level of 1800 dollars for the first time.

Gold can be used as an alternative investment when the financial market shake. Strengthening gold price reflects not only fear about the Standard & Poor's ratings. Moreover, the price of gold reflects the overall posture of the currency markets and world economy.
Gold continues to be hunted investor after the U.S. dollar and stock prices continue to fluctuate sharply. This makes investors turn to gold.

"Those who bought gold still see no problem in the U.S. and the EU, an unstable currency markets, as well as the decline in world economic growth. They all refer to gold is regarded as the world's most powerful currency," said analyst Jim Wycof.
But now the price of gold can also be affected by global political conditions.

In Indonesia, the price of gold has penetrated more than  500,000 IDR. Gold investments yield big return so the price continues to improve. This can be a very lucrative investment alternative and safe for investors.

The Growth of Islamic Banking in The World and Indonesia

The early history of the early events of the first Islamic Bank in doing is in Pakistan and Malaysia in the years around the 1940s. Later in Egypt in 1963 stood Islamic Bank in the village Rular It Ghamr Bank. These banks operate in rural Egypt and is still small. In the UAE, the new stand in 1975 with Dubai Islamic Bank. Later in the Kwait in 1977 stood Kuwait Finance House which operates without interest. Further back in Egypt in 1978 established the Islamic Bank named Faisal Islamic Bank. This step is then followed by the Islamic International Bank For Investment and Development Bank.

In Cyprus in 1983 stood Faisal Islamic Bank of Kibris. Then at the Malaysian Islamic Bank was born in 1983 with the establishment of Bank Islam Malaysia Berhad and the year also 1999lahir Bank Bumi Putera Muamalah.Di Iranian system of Islamic Banking into effect nationally in 1983 since the issuance Legislation Islamic Banking Act. Then in the Turkish secular state whose ideology was born in 1984 Islamic Bank of encouragement presence Daar al-Maal al-Islamiserta Faisal Finance Institution and began operating in 1985.

One of the main pioneers of the State in implementing a national system of Islamic Banking is Pakistan. Government of Pakistan convert the entire banking system in the country in 1985 into a system of Islamic Banking. 1979, some Earlier in the year's biggest financial institutions in Pakistan have removed the system of interest and start of that year the government Pakistan socialize interest-free loans, especially to farmers and fishermen. 

In Indonesia a pioneer Islamic Bank is Bank Muamalat Indonesia established in 1991, the bank initiated by the Indonesian Ulema Council and government as well as support from the bonds of Indonesian Muslim Intellectuals and some Muslim businessmen. Besides Muamalat Indonesia, now also has attended the government-owned Islamic Bank like  Mandiri Syariah Bank and  Syariah Bank next stand as a branch of an existing conventional banks such as  BNI Bank, Government Bank of West Java. The presence of Islamic Banking was not only done by the Muslim community but also non-Muslims.

The development of Islamic Banking in Indonesia has become the benchmark for the success of the existence of Islamic economics. Muamalat as the first Islamic Bank and a pioneer for other Islamic Banks had already been applying this system amid the proliferation of Conventional Banks. Monetary crisis in 1998 had drowned conventional banks and many were liquidated due to system failure rate. While banks are applying Syariah system can continue to exist and survive. 

The growth of Islamic Banking in recent years Indonesia has increased rapidly ie above 30% in the last five years which is the highest in the world. But Islamic Banking market share of Conventional Banking is still small, only 3.4% as of  July 2011. 

Islamic Banking industry is currently growing rapidly in Indonesia can contribute to national economic growth because  Islamic Banking activity is not regulated by market mechanisms, in addition to Islamic Banking could also encourage creation of stability of the financial system for the banning of activities smelling speculation or shadow banking that separates financial system with the real sector. 

The growth of Islamic Banking in Indonesia can be further increased and grew significantly as long as the supporting infrastructure facilities to promote the program as well as syariah instruments can be realized so that it can compete with Melli Iran Bank  is the world's largest Islamic Bank.

Financial Management

Financial management is an activity of planning, budgeting, inspection, management, control, search and storage of funds owned by an organization or company.

The concept of  financial management which involves decisions about investments, financing business activities and the distribution of dividends to the company.
Financial management objectives of the company itself is maximizing corporate value as reflected in share value. Thus if one day the company is sold then the price can be set as high as possible.

Company Value (V) = Debt (D) + Equity (E)
If the debt (D) assumed to be fixed, the Company Value (V) rises, and Equity Rise (E) then the price per share also increased, then the shareholders are happy because the added prosperity.

Maximize the value of different enterprises by increasing corporate profits. If manjemen short-sighted companies, it will seek big profits now by selling products with high prices but low quality to keep costs (Strategies Hit and Run), but in future years will decrease even lost profits because the company will lose consumers. Shareholders clearly do not want prosperity for a moment with the cost of long-term prosperity. But to maximize prosperity pemegeng shares not only gains but also are considered risk factors.

Financial Management Functions:
   1. Financial Planning  

       Make a plan and pengeluaraan income and other activities for a certain period 
   2. Financial Budgeting  
       Follow-up of financial planning to make a detailed expenditure and income
 3. Financial Management  
     Using company funds to maximize the funds available with a variety of ways 
 4. Finance Search  
     Finding and exploiting existing funding sources for operational activities of the company
 5. Finance Storage  
   Companies to raise funds and save the funds safely
  6. Financial Control  
      Evaluation and improvement of finances and financial systems in the enterprise
  7. Audit  
      Conduct internal audits of the financial companies that exist to prevent irregularities. 

Main Tasks of Financial Management 
Basic tasks are performed by a financial manager in general are:

1. Getting Funds Company
2. Using Company Funds
3. Dividing Profit / Profit Companies

Scope of Financial Management: 

 1. Raising of Found (Decision Spending) 

• Internal financing
• External financing

2. Investment Decisions (Allocationn of Found) 

• Working Capital
• Fixed Capital

3. Dividend Decision

• Retained earning
• Dividend Payout

Internal Control System Against the Issuers and Public Companies

Internal control is a very important thing to maintain company assets and check the accuracy and trustworthiness of data, the company management is often the reason for the condition is less open in the company's internal controls, even for the management companies that have gone public though. This resulted in people not easily gain access to internal corporate information control condition. Only parties who have access perusahaanlah auditor such information and may test the effectiveness of internal control system which is owned perusahaan.dengan such an understanding of internal control is very important especially in this era of globalization and business competition is very tight. 

You certainly have heard that the Committee of Sponsoring Organizations of the Treadway Commmission (COSO) in 1992 issued "Internal Control - Integrated Framework" to help businesses and other entities assess and enhance their internal control systems. 

Since then the framework has been recognized by the executives, regulators, standard setters, professional organizations, and others as appropriate comprehensive framework for internal control. In the period 1992 to date, of course, there has been a change in the environment, laws and regulations and related financial reporting. The most significant was the adoption of the Sarbanes-Oxley Act became law in the United States in 2002. Among its provisions, Section 404 requires management of public companies to annually assess and report on the effectiveness of internal control over financial reporting.

According to the goal, there are two internal control, namely
1. Accounting Control.
accounting controls include organizational structure, methods and measures are coordinated to enjaga wealth of a company, check for accuracy and trustworthiness of accounting data. A good control system will affect the security of property investors systematically and can generate financial reports yanga reliable and trustworthy.
2. Administrative Control
Administrative control is to encourage efficiency and compliance with corporate management policies.

Elements of Internal Control:

 1.Environmental Control 

 Environmental Control of an organization's emphasis on the various factors that simultaneously influence the policies and control procedures.

a. Management Philosophy and Operating Style
Philosophy is a set of basic beliefs which become the parameters for the company and its employees.
(Describe what should be done and which did not work)
Operational style reflects ideas about how the manager of a company's operations to be done
(Company philosophy is communicated through the operating style of management)

b. Organizational Structure
One of the key elements in the control environment is the organizational structure. Organization Chart shows the pattern of authority and responsibilities that exist within a company. (Decentralization or centralization)

c. Board of Commissioners and the Audit Committee
Board of Commissioners is the liaison between the shareholders by the management company. Shareholders entrust control over management through the board of commissioners. (So ​​it all depends on the board of commissioners)
The audit committee was established by the board of commissioners to supervise the implementation of the operational control of the company.

d. Method of the Delegation of Authority and Responsibility
Method of delegating authority and responsibility has an important influence in the control environment. Usually this method is reflected in an organizational chart.

e. Management Control Methods
Control environment is also influenced by the methods of management control. This method includes effective monitoring (via peranggaran), accountability reports and internal audits.

f. Policy of employment practices and
Policies and practices relating to recruitment, training, evaluation, remuneration and promotion of employees, has an important influence in achieving corporate objectives, as is also done in minimizing risk.

g. External influences
Organizations must comply with rules issued by the government or party which has jurisdiction over the organization. It was very influential in the company's internal control.

2.Accounting System

 The accounting system is not only used to produce financial statements, but also generate management control. 

3.Prosedur Control 

 Control procedures are policies and rules concerning employee conduct that is made to ensure that management control objectives can be achieved.

Generally good control procedures consist of:
a. Use of appropriate authority to perform an activity or transaction. 

In organizations, each transaction occurs only on the basis of authorization from the officer who has authority to approve the transaction. Therefore the organization must be made system that regulates the division of authority for authorization for the implementation of each transaction. Given this division of authority would be made easier if the audit trail, because the authorization limit transaction activity only in people who are elected. Authorization to prevent abuse of the transaction to others. 

b. The division of tasks.

Task of separating the functions of the division operation and storage of the accounting function (recording). And a function must not carry out all stages of a transaction. With separating operation and storage function of the recording functions, accounting records prepared to reflect the actual transaction occurred on the operating functions and storage functions. If all function together, will open up the possibility of recording transactions that does not happen, so that the resulting accounting information can not be credible, and consequently the organization of wealth for their safety.

c. Manufacture and use of adequate documents and records.

Procedures should include the design and use of adequate documents and records to help convince the recording of transactions and events adequately. Furthermore, adequate documents and records would produce information that accurately and reliably on the property, debts, income and expenses of an organization. (Usually done side by side with the proper use of authority)

 

d. Adequate security against the assets and records.

Adequate security cover restrictions on access to assets and records storage areas to prevent theft of company assets and data / information company. 

e. Independent checks on performance.

All records of existing assets should be compared (checked) periodically with the existing physical assets. Pengecekkan inni should be done by an independent organizational unit (in addition to the storage function units, function units and function units of recording operations) to maintain the objectivity of the examination.

 

Internal control systems in companies that use manual accounting systems in more focus on people who implement the system (People Oriented). If the computer is used as a tool of data processing, there will be a shift from people-oriented system to a computer-oriented system (Computer Oriented). Internal Accounting Control in Electronic Data Processing environment is divided into the General Control and Application Control.

General Control
Common control is a standard and guidelines used by employees to perform their functions. Common control elements include: Organization, procedures and standards for program changes, system development and operation of data processing facilities.

Organization
In a manual system, the control carried out by separating the functions of basic functions (operations, storage and accounting). A transaction will be implemented by the operations function if there is authorization from the authorities, the transaction will be stored by the storage function, and transactions that occur will be recorded by the accounting function.
In computer systems, basic functions are often combined in the form of a computer program, so merging these three functions requires a specific control methods.

Example, in a manual inventory system, the separation performed in the operating functions (purchasing) and the function of storage (warehouse) with accounting functions (inventory records) so that at the end of the period can be pengecekkan cross between a function to determine the amount of remaining stock. In computer systems, computer programs designed to make the decision when supplies should be ordered, and both can publish documents Puchases. If goods orders have been received, then the computer do the recording of goods received and make a report document receipt of goods.

To create a system of internal control within the PDE, we need to hold the separation of the following functions:

a. The function of system design and programming.
b. Operation functions of data processing facilities.
c. Storage function and literature programs.

That Separation the following objectives:

a. This separation will create a cross check on the accuracy and reasonableness of the changes incorporated into the system.
b. To prevent someone who is not entitled to access the computer.
c. To encourage efficiency due to specialization.

  Control over system and program The relevant public control of systems and programs include:

a. Review and approval procedure of new systems.
b. The procedure of testing program.
c. Procedures conversion program.
d. Documentation.

Control over data processing facilities Data processing facilities include four main areas:

a. Data conversion operations.
b. Computer Operations.
c. Library.
d. Control functions.

Data conversion activities consist of converting data from source documents into computer readable form either by the method of batch and online processing. 

Control over computer operations include:

Limited computer access rooms, making clear instructions on changing the data source document so machine-readable form, password used to regulate the use of computers.
Control of the archive data and programs stored must be made by library staff in place that well protected, including: the procedures in the storage, maintenance of physical security of computer files, the procedure of making backups, control over the use of archives stored in the library.

Components of internal control include:  

1. Corporate environment 

2. Control activities 

3. Risk assessment 

4. Information and communication 

5. Monitoring 

The internal control functions include:  

a. Preventive Control. That Prevents a problem sebelu problem arises.

b. Detective Control. which revealed a problem when the problem arises. 

c. Corrective Control. Ie solve the problems found in prenvtive and detective controls.