QUESTION 2 (40%)

PT. Alakishia has been operating in Jakarta for more than 10 years. Aries is one of the employees who is responsible for recording transactions in the purchasing department when ordering raw materials from suppliers. Once, Wilson as the party who made the payments and received the invoices, resigned from the office, so for the moment everything was in Aries' charge. Jenni as COO of PT. Alakitashia really trusts Aries because by seeing the contribution of Aries for a long time, it is also due to the close friendship between them, thus leaving the work entirely and the internal control to Aries itself. This has caused a lack of segregation of duties, so that since it was fully managed by Aries, the number of purchases has increased and it can be seen how the expenses are higher than before, so it is feared that fraud could occur. In addition, Aries has also collaborated with all suppliers and the production department to harmonize the transaction record in the form of the number of units of goods purchased and produced along with the cost price charged to support the data presented by him in order to hide his movements. As a professional internal auditor, you are asked to audit the performance of the purchasing department that is suspected to be a party that has the potential to commit fraud, so you are asked to create a procedure of comprehensive audits in order to present the information in transparency and accountability to all stakeholders.

Required:

a. Make an audit plan related to the actions you can take to make the audit activity a success. Write down what is the difference between internal audit and external audit in terms of planning and the results provided.

b. Write down the findings that you can find with reference to the elements of the COSO Framework, then explain what causes internal control to fail in the company and the possible causes that may occur in the future, and how you can help the company to determine appropriate actions based on the findings you obtain.

c. You are asked to develop a Risk Management Model that is intended to help identify the risks of how you as a professional auditor can provide various types of actions that all managers can take an appropriate action and advanced steps to prevent fraud in the future. Make a strategic objective and KPIs related to your strategy development process and how you suggest being able to control these risks by referring to the 10 values of taking care of risk.