Optimizing audit of plantation state-owned enterprises in Medan to minimize the risk of losses due to fraud

Abstract

As one of the plantation icons in Indonesia, North Sumatra has oil palm as the main commodity. The management of plantations in North Sumatra is represented by PTPN II, PTPN III, and PTPN IV headquartered in Medan, the capital of North Sumatra. With a good synergy of Plantation State-Owned Enterprises (SOEs) management and proper supervision, can contribute to the development of the city and increases state revenues. PTPN IV has an internal auditor unit under the board of directors. Optimizing the role of internal auditor in Plantation SOEs can minimizes losses due to fraud, can foreign exchange and contribution for national development. This research used a normative legal method. The results show that Plantation SOEs have contributed greatly to the development of Indonesia. The internal auditors of Plantation SOEs in Medan apply a single supervision system under the board of directors. In its implementation, the internal auditor unit at PTPN IV is still got involved in fraud practices that can harm the company. Also affected both corporate income and contribution of Plantation SOEs to the development of Medan. Recommends to establish an independent and integrated external auditor unit, outside the company’s internal structure, but still under the Ministry of SOEs.