THE COMPLIANCE OF THE INTERNAL AUDIT DEPARTMENT OF PT. ASTRA INTERNATIONAL, TBK WITH GUIDELINES SPECIFIED BY THE INSTITUTE OF INTERNAL AUDITORS (IIA) IN 2012

Abstract

Initiated from a question in researcher’s mind about the importance of internal audit existence in a company, the researcher found the significance of internal audit department in a company, especially for public companies. Apparently, the role of internal audit department would influence the sustainability of a company in the globalization era. It attracted the researcher to obtain a deep understanding of the international guidance on internal audit practice and its implementation on public company in Indonesia. As PT. Astra International, Tbk. is one of the well-known public company in Indonesia, the researcher tries to evaluate the compliance of internal audit department practice of PT. Astra International, Tbk with the international guidance by the IIA. To capture a clear picture of the implementation, the researcher observed and even contributed directly in the audit projects at internal audit department of PT. Astra International, Tbk. The researcher also discussed the current condition of the audit activities in the company to the top management level in internal audit department to get the general view of the activities implemented. Through direct observation, inquiries and involvement, the researcher could understand the international standard and its actual implementation and challenges. As a well-known public company, PT. Astra International, Tbk, generally has complied most of the internal audit practice stated by the guidance issued by the IIA. However, there is limitation on the implementation due to work culture and mindset, also technology. The area of improvements are coming from procedures and policies manual book, monitoring systemand disclosure of conformance appliance. The researcher tried to analyze the cause and effect of each are of improvementsand gave several recommendation to overcome the barrier, so that the internal audit activities in the company may implement the guidance issued by the IIA effectively that could add the company’s value. The improvementcould be doneby an extra effort on planning stage and improvement in technology used by the internal audit department, also dissemination of the standard used by the internal audit department as a whole.