WTP kok KORUPSI? Katanya kalau sudah WTP tidak ada korupsi...

Summary

The transcript explores the complex issue of corruption, focusing on its impact on financial reporting and audit opinions. It highlights how corruption, often involving bribery, conflict of interest, or fraud, can lead to material misstatements in financial statements. The script discusses the role of auditors in detecting these issues and the relationship between corruption, audit risk, materiality, and internal controls. It explains how auditors assess whether corruption affects financial reporting to determine if a clean audit opinion (WTP) can be given. The session also delves into the technical aspects of auditing, including risk detection and control procedures.

Takeaways

• 😀 Corruption is a harmful practice that can enrich perpetrators but hinder national goals of societal welfare.
• 😀 Corruption affects various aspects of public life, including public services, infrastructure, and education.
• 😀 Material misstatement in audit refers to a discrepancy in financial reporting, which can be caused by errors or fraud.
• 😀 Fraud in financial reporting involves intentional, unethical actions to manipulate financial data, such as falsifying documents or hiding liabilities.
• 😀 There are two types of misstatements: 'known' misstatements, which can be calculated precisely, and 'projected' misstatements, which are estimates based on sample data.
• 😀 Materiality refers to the significance of a misstatement, and if a misstatement is deemed material, the auditor will issue an opinion with qualifications.
• 😀 Fraud is defined as an intentional act to gain unfair advantage or break the law, and corruption is a form of fraud.
• 😀 Corruption in auditing is often difficult to detect, as it typically involves concealment and manipulation, sometimes with the help of collusion.
• 😀 Corruption may involve conflicts of interest, bribery, illegal gratuities, or extortion, all of which are common in cases of fraud.
• 😀 When corruption is discovered during an audit, it is often material both quantitatively and qualitatively, making it difficult to issue a clean audit opinion (WTP).

Q & A

What is the relationship between corruption and audit opinions?

Corruption can result in material misstatements in financial reports. This could affect the auditor's opinion, potentially leading to a qualified opinion (WTP) if corruption leads to material misstatements in the financial statements.

How does material misstatement impact the auditor's opinion?

If an auditor detects material misstatements, whether due to errors or fraud, they may issue a qualified opinion. If the misstatement is not material, the auditor would issue an unqualified opinion (WTP).

What is the difference between an error and fraud in financial reporting?

An error is unintentional, often caused by mistakes in data processing or misunderstandings of accounting standards. Fraud, however, is intentional and involves manipulation of financial data, such as falsifying documents or hiding liabilities.

What role does materiality play in determining an auditor's opinion?

Materiality refers to the significance of a misstatement in financial reports. If the misstatement is deemed material (either quantitatively or qualitatively), it affects the auditor's opinion, potentially leading to a qualified opinion.

What is the distinction between known and projected misstatements?

A known misstatement is one where the exact value is identified, while a projected misstatement is an estimate based on a sample of data extrapolated to the entire population.

How do auditors assess corruption in an organization?

Auditors assess corruption by analyzing both the quantitative and qualitative impact of corrupt activities on financial reports. They examine internal controls and may extend substantive testing to detect any fraudulent activities.

How does corruption affect the materiality of misstatements in financial reports?

Corruption often leads to material misstatements due to its widespread nature within an organization. These misstatements may involve multiple accounts, making them material both quantitatively and qualitatively.

Why is corruption considered a form of fraud?

Corruption involves dishonest actions, such as bribery or embezzlement, intended to gain unfair advantage or personal benefit. It is classified as fraud because it involves intentionally misleading or hiding facts to benefit certain individuals or groups.

What factors influence the audit risk associated with detecting corruption?

Audit risk is influenced by the auditor’s ability to detect material misstatements, the internal controls of the entity being audited, and the extent to which corruption is hidden or involves collusion among multiple parties.

How does the audit process respond when corruption is found after a WTP opinion is given?

If corruption is discovered after a WTP opinion, the auditor must reassess the situation by evaluating the materiality of the misstatements and reviewing the effectiveness of internal controls. This could lead to a revision of the audit opinion.