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Showing posts with label Good Governance. Show all posts
Showing posts with label Good Governance. Show all posts
AUDIT : Public Sector Performance
During this time, the public sector often receives accusation as a hotbed of corruption, collusion, nepotism, inefficiency and waste of state the source of. Complaints of "bureaucrats can not afford to do business" is intended to criticize the poor performance of public sector companies. Government as a public-sector organizations were not immune from these accusation. Organizations sector public are the institutions that run the government with a source of legitimacy that comes from the public. Therefore, the public trust given to the government must be balanced with a clean government.
Good governance is characterized by three main pillars that the basic elements that are interrelated (Prajogo, 2001). The three basic elements are participation, transparency and accountability. A good government should open the door as wide as possible so that all parties involved in government and to participate actively to oversee the running of the government that must be held in a transparent and its implementation should be accountable. In the language of accounting, accountability (ability to give responsibility) is the basis of financial reporting (Wilopo, 2001). Financial reporting by government is important role in order to fulfill the task of government that accountability to the public in a democratic society.
Good governance is characterized by three main pillars that the basic elements that are interrelated (Prajogo, 2001). The three basic elements are participation, transparency and accountability. A good government should open the door as wide as possible so that all parties involved in government and to participate actively to oversee the running of the government that must be held in a transparent and its implementation should be accountable. In the language of accounting, accountability (ability to give responsibility) is the basis of financial reporting (Wilopo, 2001). Financial reporting by government is important role in order to fulfill the task of government that accountability to the public in a democratic society.
In a democracy, "the transparency of financial reporting" is something that is demanded by the public to the government. Conversely, in a democracy, the government is obliged to provide transparent financial statements to the public. A democratic government should be responsible for the integrity, performance and management, so the the government should provide useful information to assess accountability and assist in decision making on economic, social and political. Government is the reporting entity that must be make a financial report with the following considerations (Faiz, 2000):
- The government owns and controls the significant resources.
- The government that use of these resources should be far-reaching impact on the economic welfare of the people.
- There is a separation between management and ownership of of these resources.
- The government owns and controls the significant resources.
- The government that use of these resources should be far-reaching impact on the economic welfare of the people.
- There is a separation between management and ownership of of these resources.
Accountability refers to responsibilities individuals, groups or organizations that should implement a compliance authority and responsibility. The mandatory are included:
- Answering, attempt to provide an explanation or justification for the implementation and fulfillment of responsibilities.
- Reporting, reporting the results of the implementation and fulfillment of responsibilities.
- Producing, assumptions on the results achieved.
- Answering, attempt to provide an explanation or justification for the implementation and fulfillment of responsibilities.
- Reporting, reporting the results of the implementation and fulfillment of responsibilities.
- Producing, assumptions on the results achieved.
Organizations sector public have to maintain the quality, professionalism, accountability and value for money in carrying out its activities. Audit of public sector organizations are required to ensure that accountability has been done by public sector organizations. Implementation of audit is not only limited to financial and compliance audit, but should be expanded with conduct audits of the performance of public sector organizations. [Bajuri & Trihapsari]
Healthy | Smart | Rich, at: 5/21/2012
Good Corporate Governance (GCG)
Corporate governance is a concept that can be used to improve economic efficiency, which includes a set of relationships between the company's management, board of directors, shareholders and other corporate stakeholders.
Corporate governance also provides a structure that facilitates the determination of the goals of a company, and as a means to determine the performance monitoring techniques. Watts (2003), stated that one of the ways used to monitor and restrict the issue of contract management is the opportunistic behavior of corporate governance. Related with agency problems, corporate governance is a concept based on agency theory that expected to serve as means to give confidence to investors that they will receive a return of the funds that they have invested. In other words, corporate governance directed to reducing asymmetry information between principal and agent, which in turn could reduce earnings management measures (Ujiyanto and Bambang, 2007).
Until now, there are many varying definitions of Good Corporate Governance (GCG). But generally have the same purpose and understanding. Forum for Corporate Governance in Indonesia or FCGI (2000) in the first publication is using the definition of the Cadbury Committee, that is:
Corporate governance also provides a structure that facilitates the determination of the goals of a company, and as a means to determine the performance monitoring techniques. Watts (2003), stated that one of the ways used to monitor and restrict the issue of contract management is the opportunistic behavior of corporate governance. Related with agency problems, corporate governance is a concept based on agency theory that expected to serve as means to give confidence to investors that they will receive a return of the funds that they have invested. In other words, corporate governance directed to reducing asymmetry information between principal and agent, which in turn could reduce earnings management measures (Ujiyanto and Bambang, 2007).
Until now, there are many varying definitions of Good Corporate Governance (GCG). But generally have the same purpose and understanding. Forum for Corporate Governance in Indonesia or FCGI (2000) in the first publication is using the definition of the Cadbury Committee, that is:
"seperangkat peraturan yang mengatur hubungan antara pemegang saham, pengurus (pengelola) perusahaan, pihak kreditur, pemerintah, karyawan serta para pemegang kepentingan intern dan ekstern lainnya yang berkaitan dengan hak-hak dan kewajiban mereka, atau dengan kata lain suatu sistem yang mengatur dan mengendalikan perusahaan."
In addition, FCGI explained that the purpose of Corporate Governance is to create added value for all stakeholders.
In addition, FCGI explained that the purpose of Corporate Governance is to create added value for all stakeholders.
Healthy | Smart | Rich, at: 4/20/2012
Auditor's Role in The Realization of Good Governance
The role of audit is vital in ensuring the proper financial and performance accountability report. Auditing is a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between these assertions and established criteria and communicating the results to interested users.
Audit is an examination that provides an objective and constructive assessment of the extent to which financial, human and physical resources are managed with due regard to economy, efficiency and effectiveness; and accountability relationships are reasonable served. Audit contributes in implementing good governance through government financial audit, performance audit, and special audit (Act # 15 year 2004). State losses could be found out by implementing an effective audit such as forensic audit, investigative audit, or other types of auditing. Audit opinion for government financial report will trigger government to work in better manner, more transparent, participative, and accountable.
The misuse of public office for private gain, the improper and unlawful behavior of public-service officials, both politicians and civil servants, whose positions create opportunities for the diversion of money and assets from government to themselves and their accomplices can be detected and found by audit.
This paper analyzes the auditor role in implementing good governance concerning financial accountability, transparency, and participation in order to achieve better public services. Discussion will be derived to find out the understanding of auditor role and good governance terminology fits for Indonesia environment. The purpose of
this paper is to achieve common knowledge about government auditing implemented in Indonesia. Besides, reader will find out explanation from both theoretical approach and pragmatical approach as well. (by: UNDP)
Healthy | Smart | Rich, at: 2/23/2012
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