[MEET 12] ETIKA PROFESI & TATA KELOLA KORPORASI - PERAN & TANGGUNG JAWAB AUDITOR

Summary

This video explains the essential roles and responsibilities of external and internal auditors in corporate governance. External auditors provide an independent opinion on financial statements to ensure accuracy and transparency, while internal auditors assess and improve internal controls and risk management within the company. The discussion also covers their accountability to shareholders, the importance of independence and competence, and their contribution to enforcing good governance practices. Additionally, it introduces the ASEAN Corporate Governance Scorecard as a tool for evaluating auditors' roles in promoting corporate transparency and responsibility.

Takeaways

• 😀 External auditors provide an independent opinion on the fairness of financial statements, helping to ensure transparency and credibility.
• 😀 The separation of ownership and management creates potential conflicts of interest, making the role of external auditors crucial in verifying financial statements.
• 😀 Internal auditors are responsible for evaluating the effectiveness of internal controls, risk management, and operational processes within a company.
• 😀 While external auditors focus on financial accuracy, internal auditors assess overall governance and operational efficiency, providing valuable recommendations for improvement.
• 😀 Both internal and external auditors play vital roles in upholding corporate governance, ensuring compliance with laws and regulations.
• 😀 External auditors must maintain independence and competence, including passing necessary certifications and undergoing regular rotation to ensure objectivity.
• 😀 Internal auditors need to maintain their independence from the units they audit, but they are employees of the company, unlike external auditors.
• 😀 External auditors are accountable to shareholders, but they don’t have clear, direct legal obligations to them, as per regulations like Indonesia's Act No. 5/2011 on public accountants.
• 😀 The accountability of external auditors is primarily to the company itself, ensuring they perform their duties professionally and ethically.
• 😀 The ASEAN Corporate Governance (CG) Scorecard helps assess the role of auditors in ensuring transparency, with external auditors evaluated for disclosure practices and internal auditors for their responsibility in governance.
• 😀 Effective corporate governance relies on both independent external auditors and efficient internal audit functions, ensuring compliance, risk mitigation, and enhanced operational effectiveness.

Q & A

What is the main responsibility of an external auditor?

The primary responsibility of an external auditor is to provide an opinion on the fairness and accuracy of the financial statements, ensuring they present a true and fair view of the company’s financial performance.

Why is there a need for external auditors in companies?

External auditors are necessary to address agency issues arising from the separation of ownership and management. They help mitigate information asymmetry and ensure that management’s financial reports reflect the true performance of the company.

How do external auditors ensure their independence?

External auditors maintain their independence through regulations that require them to rotate their audit services and avoid conflicts of interest. Additionally, they are expected to adhere to ethical standards and are regulated by professional bodies.

What is the role of internal auditors in a company?

Internal auditors assist in evaluating and improving the effectiveness of internal controls, risk management, and governance processes within the company. They provide objective assurance to management and the board about the company's operations.

How does the role of internal auditors differ from that of external auditors?

Unlike external auditors, who focus on auditing financial statements and providing an opinion on their accuracy, internal auditors focus on assessing and improving internal controls, risk management, and governance practices within the organization.

What are the key tasks and responsibilities of an internal auditor?

Key tasks of an internal auditor include planning and executing internal audits, evaluating the effectiveness of internal controls and risk management, reviewing financial and operational efficiency, and providing recommendations for improvements.

Why is independence important for both internal and external auditors?

Independence is crucial for both internal and external auditors to ensure that their evaluations and opinions are unbiased and objective. This independence helps maintain the credibility of their work and ensures that management cannot influence the audit results.

What regulations govern the competence and independence of external auditors?

External auditors are governed by regulations such as the Public Accountant Law and the Indonesian Financial Services Authority (OJK) regulations. These set requirements for auditor certification, audit tenure limits, and the rotation of audit engagements to ensure independence.

How does the ASEAN Corporate Governance (CG) Scorecard assess auditors?

The ASEAN CG Scorecard evaluates external auditors based on their role in promoting transparency and financial disclosure. Internal auditors are assessed on their contribution to improving governance practices, risk communication, and internal controls within the organization.

What is the significance of an external auditor's accountability to shareholders?

External auditors' accountability to shareholders ensures that they conduct their audits with professionalism and objectivity, providing credible financial statements. This accountability is key to maintaining shareholder trust and upholding corporate governance standards.