EVALUATION OF THE ROLE OF INTERNAL AUDITORS IN ASSESSING THE RISK OF BANKING BUSINESS IN SHARIA BPR: A case study on BPRS Baktimakmur Indah and BPRS Baktisumekar
Amount: EVALUATION OF THE ROLE OF INTERNAL AUDITORS IN ASSESSING THE RISK OF BANKING BUSINESS IN SHARIA BPR: A case study on BPRS Baktimakmur Indah and BPRS Baktisumekar
Authors: Habiburrochman
Memberships: Master of Accounting Study Program, Faculty of Economics and Business, Universitas Airlangga Surabaya
Publisher: Airlangga University
Abstract
The implication of the public's desire to transact according to sharia has given rise to various types and forms of financial institutions. One of the Islamic financial institutions is the Rural Bank (BPR). The main concept of Islamic financial institutions is the basis of their rules and operations on the basis of Islamic sharia. As a relatively new financial institution, the handling of bank risk must be the concern of management and all parties related to the bank. In this case, the role of the internal auditor is needed to provide adequate assurance regarding the risks in the bank's operations.
The purpose of this study is to get an overview of the role of internal auditors in BPR Syariah. An interesting condition in this case is the different positions of the internal auditors, namely under the directors and under the commissioners. In addition, developments in internal audit are more directed towards preventive audits than currative audits through understanding and implementing risk management in audits. From these two conditions, it is interesting to examine further the role of internal auditors in minimizing business risk in the banking world, especially Sharia BPRs.
This type of research is an explanatory research that explains the phenomena that occur in the company that is the object of research. This research was conducted in two BPRS namely Baktimakmur Indah Sidoarjo (BMI) and Bakti Sumekar, Sumenep (BS).
Based on the results of the study, it shows that the role of the internal auditor is in accordance with the area of the job description that has been determined. Internal auditors at BS are focused on operational risk. Internal auditors verify transaction documents including checking for correctness, accuracy of calculations, validity, bookkeeping, completeness of signatures and other supporting documents. This pattern often leads to the assumption that the internal auditor's job is to find fault with people. Internal auditors at BMI have a broader job description covering all functions within the bank. Internal auditors in carrying out their duties are required to report regularly on their audit findings. Considering that internal auditors are organizationally responsible for under the board of commissioners even though they are under the board of directors, in providing audit findings reports are aimed at both the board of directors and commissioners. The internal auditor's report that is technical in nature is immediately followed up by the board of directors, while a finding of a strategic nature usually requires the board of directors to discuss it. This pattern makes internal auditors a means of guaranteeing and providing input for management and commissioners. The impression that emerges in the end is that the internal auditor is looking for or finding an error in order to find the best solution. This condition creates a condition of checks and balances between the directors and commissioners.
This condition of checks and balances between directors and commissioners makes the internal auditor's report more meaningful. The position of the internal auditor is only as a functional staff, not the executor and decision maker of the follow-up audit findings. So that if the audit report is only for the board of directors, then all reports of findings, warnings and inputs, all end up with the board of directors. While in check and balance conditions, the commissioners can ask how far the audit findings have been followed up by the directors. The Board of Directors in this case will try to always monitor and follow up on audit findings so that when asked by the commissioners they can provide a detailed and complete picture. So that the objective of minimizing business risk at the bank can be monitored continuously.
Keywords: BPR Syariah, internal auditor role, assurance and consultancy, watch dog, check and balance
sources: http://repository.unair.ac.id/34643/
