Analysis of Audit Opinion of Financial Statements From State Institutions: Indonesia Empirical Study, Period 2012-2017

Fransisca Listyaningsih Utami,Lucky Nugroho,Putri Renalita Sutra Tanjung,Yananto Mihadi Putra

doi:10.5430/ijfr.v11n5p150

Fransisca Listyaningsih Utami, Lucky Nugroho + Show 2 more

Open Access

https://doi.org/10.5430/ijfr.v11n5p150

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Abstract

This study aims to compare the results of BPK's opinion on the financial statements of state institutions against the quality of implementation of state institutions during 2012-2017. The results showed that the quality of LKKL presentation had improved throughout the 2012-2017 period. Improving the quality of financial reporting of state institutions can be seen from the increasing number of entities that obtain Unqualified Opinion and the tendency to reduce the number of the institution that obtain Qualified Opinion and Disclaimer opinions. Improving the quality of financial reporting shows that local government entities have been able to present their financial reports correctly and in accordance with applicable principles. In addition, good financial reporting can also be an indication that the entity has a good performance in accordance with the target that has been committed.

Highlights

The fraud committed by the auditor of the Supreme Audit Board (BPK) was revealed by the Corruption Eradication Commission (KPK) with the arrest of a number of 23 BPK auditors from 2005 to 2017
While this research does not aim to conclude because this research is an exploratory study which aims to present the factors that form the basis of BPK in determining opinion on the results of audits of LKKL, knowing the quality of the implementation of state institutions based on BPK Audit Opinion Results, Internal Control Systems and LKKL adherence to the Laws Regulations, fostering financial statements of departments in setting various rules that aim to improve the quality of financial reports and to find out follow-up recommendations from BPK RI
The fairness assessment of the financial statements is seen from the conformity with government accounting standards, the adequacy of disclosure, compliance with laws and regulations, and the internal control system

Summary

Introduction

The fraud committed by the auditor of the Supreme Audit Board (BPK) was revealed by the Corruption Eradication Commission (KPK) with the arrest of a number of 23 BPK auditors from 2005 to 2017. The arrest was due to BPK auditors conducting transactions with unqualified audit opinions (WTP) at institutions the government being audited (Hendri, 2017). That is because the WTP is the highest opinion of the BPK on financial statements that meet government accounting standards. The motivation to obtain WTP opinion with illegal and not commendable mechanisms such as bribery is an act of criminality because it affects the financial losses of the state. There is an opportunity for collusion between government agencies and BPK auditors to obtain WTP opinions by paying the person. These acts of corruption are of concern to the KPK and the police to be eradicated. The information about the perpetrators of corruption from state officials in the 2011-2017 period a total of 418 persons are in table 1

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