Abstract
<p><em>The application of Accrual-Based Government Accounting Standards (SAP) since 2015 still causes problems including misstatement in Local Government Financial Reports (LKPD). The role of the Inspectorate in minimizing these problems is manifested in conducting a review of LKPD. Preliminary research shows that the implementation of LKPD review in Bandung District has not been effective in detecting financial statement misstatements. This study aims to evaluate and design a risk-based review plan on accrual-based LKPD at the Bandung District Inspectorate, and also expected to be a guideline for Regional Government Inspectorates in planning LKPD reviews to generate government financial reports in accordance with SAP. This study uses a case study approach with qualitative methods. The results of the study show that the LKPD review planning at the Bandung District Inspectorate has been carried out according to regulations and IIA standards, but there are weaknesses at the stage of entity's understanding and risk identification. </em><em>The</em><em> </em><em>design of review procedures that have not implemented a risk-based approach also has an impact </em><em>on an ineffective review, therefore in this study a risk-based LKPD review plan was designed. The output of this review plan will contain testing procedures in accordance with the risk areas of the financial statements. </em></p>
Highlights
Since 2015 financial reporting in the public sector in Indonesia has experienced a transformation through the implementation of Government Regulation (PP) Number 71 of 2010 concerning Accrual-Based Government Accounting Standards (SAP) for all government entities, both central and regional
Planning is an important stage in the review assignment, especially in determining the testing procedures to be carried out so that there is a limited belief that the financial statements have been presented in accordance with applicable accounting standards
The implementation of the LKPD review plan at the District Inspectorate was carried out according to Institute of Internal Auditors (IIA) provisions and standards, but there were weaknesses that could lead to a less effective review including the Inspectorate had not yet understood the application system and business processes in the area reviewed, risk identification was not structured and documented in a working paper, so the results are not followed up with risk assessment and are not used as material for preparing a review program
Summary
Since 2015 financial reporting in the public sector in Indonesia has experienced a transformation through the implementation of Government Regulation (PP) Number 71 of 2010 concerning Accrual-Based Government Accounting Standards (SAP) for all government entities, both central and regional. The Minister of Home Affairs Regulation (Permendagri) Number 4 of 2008 concerning Implementation Guidelines for the Review of LKPD explains that the purpose of the review is to provide limited confidence that the LKPD has been prepared through an adequate Internal Control System (SPI) and is presented in accordance with SAP. Based on these objectives, the role of the Inspectorate is significant in realizing quality LKPD and in accordance with accrual-based SAP. This is in line with the results of the study (Maulana, Djamhuri, & Purwanti, 2017) which concluded that quality review had an effect on the quality of the LKPD
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