AUDIT ROLE IN

IMPROVING THE
QUALITY OF
FINANCIAL
STATEMENTS PUBLIC
SECTOR

by :
Musliadi
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 INTRODUCTION

THE
CONCEPT
CONCLUSION
OF PUBLIC
SECTOR
TOPIC

AUDIT ROLE IN CONCEPT OF

IMPROVING THE
QUALITY OF AUDIT IN
FINANCIAL PUBLIC
STATEMENTS PUBLIC
SECTOR SECTOR
 INTRODUCTION
The public sector is
not immune from
accusations nest of
corruption,
collusion, nepotism,
inefficiency and The audit of the public
waste of state sector became the
resources focus of attention, and
it takes a strict rule
that the independent
audit to audit the
financial statements of
government agencies
 THE CONCEPT OF PUBLIC SECTOR

Understanding
Public Sector • “The public sector consists of government and public
according to IIA organizations that are controlled by or financed by
"The Institute of
the public in the form of institutions, foundations,
Internal
Auditors“(2011) organizations, and other entities that implement the
program / activity to deliver goods or services.”

Task Force on
Harmonisatio
n of Public • “public sector organizations as the central government
Sector (state), regional, and local as well as entities that are
Accounting controlled by government units.”
(2006)
 The concept of the Public Sector in Indonesia

• The public sector can be defined as a service sector that

provides goods and / or services to the general public with a
source of funds comes from taxes and other state revenues,
where its activities are governed by rule or regulation..

• Peter Drucker in Rai (2008: 4) provides a way to distinguish

between service organizations (service institution) with business
organizations (business enterprise) as follows.
“The one basis difference between a service institution and a business
is the way the service institution is paid. Business … are paid only
when they produce what the customer wants and what he is willing
to exchange his purchasing power of …service institution, by
contrast, are typically paid out of a budget allocation … their
revenues are allocated from a general revenue stream which is not
tied to what they are doing, but obtained by tax, levy or tribute.”
 Component Public Sector
Public Sector classification in the Government Finance Statistics (GFS)
Manual 2001 by IMF

PUBLIC SECTOR

General Government Public Corporations

Central Financial Public Non Financial

Government Corporation Public Corporations

Local Monetary Public Corporation,

Government including Central Bank

State Nonmonetary Financial Public

Government Corporations
 Component Public Sector
• Government Sector(General government)
• Consists of all government units and non-profit institutions that
are controlled and funded by the government.
• In Indonesia, the government sector is divided into three sub-
sectors, namely central government, provincial governments, and
the Government of Regency / City:

• Public companies (Public Corporation)

Consisting public company financial and non-financial public
enterprises:
Finance Public Company include monetary public corporations
(including central banks and storage company, other than a
central bank controlled by the government) and public companies
which are all non-monetary financial corporations that are
controlled by government units).
Non-financial public enterprises were all nonfinancial corporations
controlled by government units
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CONCEPT OF AUDIT IN PUBLIC SECTOR

Public Sector Audit

External Audit Internal Audit

LEGAL BASIS OF AUDIT IN GOVERNMENT SECTOR IN INDONESIA

institutes

UU No 17/2003 to state UU No 1/2004 to national

finance treasury

UU No 15/2004 the audit of regulation BPK RI No 1/2007

the management and financial the state financial audit
responsibility of the state standards
AUDIT ROLE IN IMPROVING THE QUALITY OF FINANCIAL STATEMENTS PUBLIC
SECTOR

The role of the Audit

accountability transparency
 CONCLUSION

audit of the public sector is needed because government

agencies are vulnerable to the problem of corruption, collusion,
and the low level of efficiency and effectiveness that can be
shown by the government.

The audit of the public sector should have standards and

concepts clearly and unequivocally adhered to by
government agencies.

Monitoring implementation of the audit of public sector

should be further improved to achieve improvements in the
quality of the audit to the public sector and this is certainly
improve the quality of financial reporting more responsible
government.

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