Yasir Hadi Satria

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What is Internal Control?
Internal control, as defined in accounting and auditing, is a process for assuring
achievement of an organization's objectives in operational effectiveness and
efficiency, reliable financial reporting, and compliance with laws, regulations and
policies. A broad concept, internal control involves everything that controls risks to
an organization. It means by which an organization's resources are directed,
monitored, and measured. It plays an important role in detecting and preventing
fraud and protecting the organization's resources, both physical (e.g., machinery
and property) and intangible (e.g., reputation or intellectual property such as
trademarks).
Criteria Of Internal Control
1. Control Environment-sets the tone for the organization, influencing the
control consciousness of its people. It is the foundation for all other
components of internal control.
2. Risk Assessment-the identification and analysis of relevant risks to the
achievement of objectives, forming a basis for how the risks should be
managed
3. Information and Communication-systems or processes that support the
identification, capture, and exchange of information in a form and time frame
that enable people to carry out their responsibilities
4. Control Activities-the policies and procedures that help ensure management
directives are carried out.
5. Monitoring-processes used
performance over time.

to

assess

the

quality

of

internal

control

What is Auditing Standard?

The general definition of an audit is a planned and documented activity performed
by qualified personnel to determine by investigation, examination, or evaluation of
objective evidence, the adequacy and compliance with established procedures, or
applicable documents, and the effectiveness of implementation, so Auditing
standard is the rules or the guide lines for the auditor when they audit something.
What is Auditor Opinions?
The auditor's report is a formal opinion, or disclaimer thereof, issued by either an
internal auditor or an independent external auditor as a result of an internal or
external audit or evaluation performed on a legal entity or subdivision thereof
(called an "auditee"). The report is subsequently provided to a "user" (such as an
individual, a group of persons, a company, a government, or even the general

public, among others) as an assurance service in order for the user to make
decisions based on the results of the audit.
There are four common types of auditor's reports, each one presenting a different
situation encountered during the auditor's work. The four reports are as follows:

Unqualified Opinion

Qualified Opinion report

Adverse Opinion report

Disclaimer of Opinion report