Tauhid and Taqwa: The Soul in the COSO-ERM Framework -An Imaginary Research Dialogue-

Mohamad Djasuli

doi:10.21107/jaffa.v8i2.7967

Abstract

This research is an imaginary dialogue between two internal auditors of a state university. They are called as a religious senior auditor and a junior auditor. The imaginary dialogue used spirituality in order to avoid misunderstanding and heartache of each other. Both of them discuss current issues in regard to internal control as a soul and foundation to achieve the organization's objectives. This research is to discuss the concept of internal control built by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), whether is it enough to be the guardian system or is there missing elements that should be discovered? They will use the COSO-ERM (Entreprises Risk Management) as the modification of COSO, as the internal control world considers risk management is the key to prevent an organization from failure nowadays. Finally, this research offer a deconstruction of the COSO-ERM framework to become The Tauhid Taqwa-COSO-ERM Framework with Tauhid and Taqwa as the most foundation of all things in the framework especially for the human as the operator in all level.Keywords: tauhid, taqwa, COSO-ERM, and internal control

Highlights

The concept of internal control is known since 1985 when COSO was founded by five professional organizations which are: American Institue of Certified (AICPA), American Accounting Association (AAA), Financial Executive Institute (FEI), The Institute of Internal Auditors (IIA), and The Institute of Management Accountants (IMA) and its framework become the soul stone of every internal control's implementation of many organizations or institutions in the world
The flare of fraud or mega fraud cases lately in 2000’s, both in the private sector or in the public sector in the world indicates that the internal control might have been failed in running its function, for example, is Enron Case in 2005 and some financial fraud conducted by the leader of countries like in South Korea and Japan
There are cases that involve the internal auditors like in the Ministry Of Villages Disadvantaged Regions And Transmigration of Indonesia as the Inspector General of its Ministry had been accused of bribing the auditor of the Audit Board of Indonesia in 2017 and the case of Village Fund in Pamekasan Madura East Java when the Regent, Chief of State Inspectorate, and Chief Village bribed the Chief of State Prosecutor Office in 2017

Summary

Introduction

A young male junior auditor (JA) has just joined the internal control unit (SPI) of a state University. He has experience in the audit field but mostly acts as an external auditor because he worked at the public accountant office for two years. Being an auditor who worked at the public accountant put him into a curious situation in his mind regarding the audit function as an external and as an internal auditor Why it should be an internal control in the organization while everyone has given their responsibility eversince they hold the job. I am wondering why would the institution still need internal control while each people in this institution already have their working agreement, and they know what they have and should do in this organization?"

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Results

Conclusion