Matakuliah
Tahun
: PSYCHOLOGY PEMERIKSAAN
: 2009
Formulating Finding
Pertemuan 09
Formulating Finding
Session 09
Bina Nusantara University
3
Learning Objectives
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•
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Understanding about term of “finding”
Understanding about iceberg problems
Understanding about the characteristics of a competent evidence
Understanding about types of evidence
Understanding about the nature of deficiency findings
Understanding about the elements of deficiency finding
Understanding about the characteristics of a good finding
Bina Nusantara University
4
What is finding ? (1)
• Finding is a specific condition detected by auditors during the process
of audit.
• “Deficiency findings describe condition or actions that are not what
they should be – including systems that do not achieve desired
objectives.”
• “Deficiency findings also include actions that were taken improperly,
action that should have been taken but were not, and action that
should not have been taken but were”
• “In short, deficiency findings are deviation from expected norms or
established standards.”
(Sawyer and Sumners)
Bina Nusantara University
5
What is finding ? (2)
• Deficiency finding can be any deviation from rules,
regulation, standards, or other criteria, and improper
actions or no action that can bring about the company’s
loss.
• The problem detected should be having negative effect
materially on the company’s finance and operation.
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Beware of Iceberg Problem
• What we find small and insignificant on the surface can
be huge and materially significant underneath.
• Do not be trapped in a symptom, but do have to find the
real cause of the problem.
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7
The Characteristics of Competent Evidence
1.
2.
3.
4.
5.
6.
7.
Relevance
Independence of Provider
Effectiveness of Client’s IC
Auditor’s Direct Knowledge
Qualification of Individual Providing the Information
Degree of Objectivity
Timeliness
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8
Types of Evidence
1.
2.
3.
4.
5.
6.
7.
Physical Examination
Confirmation
Documentation
Analytical Procedures
Inquires of the Client
Reperformance
Observation
Bina Nusantara University
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The Nature of Deficiency Finding
• Transactions which cause large and tangible losses
• Weakness in either systems or controls where losses cannot be
explicitly shown but the possible of loss exist as they are usually
continuing,
• Weak controls can represent a greater risk to enterprise – even
though specific dollar loss cannot be demonstrated.
(Sawyer and Sumners)
Bina Nusantara University
10
Elements of Deficiency Finding
• Standards – what the operation is supposed to accomplish
• Condition – what the operation is actually accomplish
• Procedures or practices – what people are supposed to do or what they
are actually doing
• Cause – why the deviation from standard is occurring
• Effect – what is happening or could happen because conditions do not
meet standards
• Conclusion – what need to be corrected
• Recommendation – how correction might be made.
(Sawyer and Sumners)
Bina Nusantara University
11
Elements of Deficiency Finding
• Condition – what the operation is actually accomplish
• Standards/Criteria – what the operation is supposed to
accomplish
• Cause – why the deviation from standard is occurring
• Effect – what is happening or could happen because
conditions do not meet standards
• Recommendation – how correction might be made.
(BPKP)
Bina Nusantara University
12
The characteristics of
a good finding
• Significant enough to deserve being reported to management
• Documented by facts, no opinions, and by evidence that is sufficient,
competent, and relevant
• Objectively developed without bias or preconceived ideas
• Relevant to the issue involved
• Convincing enough, so that conclusions are reasonable, logical, and
based on the facts presented.
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