Selection Internal Control over Financial Reporting Framework in the Republic of Indonesia using Analytic Hierarchy Process Approach

Dedhi Suharto, M. Syamsul Maarif, DS Priyarsono, Kirbrandoko

Abstract


System of the internal control over financial reporting (ICOFR) on state finance management in the Republic of Indonesia had been designed using soft system methodology. ICOFR framework in the Republic of Indonesia was needed. Based on questionnaire, we found risk focus, applicability, harmony with PP No. 60/2018, can be applied in entity and transactional level, and can be applied IT environment as criteria. We found understandability, clarity of control components, and effectiveness assessment as sub criterion of criterion applicability and we found general control and application control as sub criterion of criterion ‘can be applied in IT environment’. The Analytic Hierarchy Process (AHP) methodology are  used to choose best alternative. Calculations of the results by Expert Choice software indicated COSO ranked 1st, COBIT ranked 2rd, and CoCo ranked 3th.

 


Keywords


Internal Control over Financial Reporting; Analytic Hierarchy Process; Expert Choice

Full Text:

PDF

References


Li, L., G. Tian, and B. Qi, “ Auditors’ unqualified opinions on internal controls and accrual quality“, Nankai Business Review International Vol. 3 No. 4, 2012 pp. 332-353, 2012.

James Hamilton, J.D., Reform of the Sarbanes-Oxley Section 404 Internal Controlover Financial Reporting Regime. CCH WhitePaper, USA, 2007.

Berkowitz, S.J., “Assessing and Documenting Internal Control over Financial Reporting”, The Journal of Government Financial Management; Fall 2005; 54,3; ABI/INFORM Collection pg. 42, 2005.

Roth, J., Control Model Implementation: Best Practices, The Institute of Internal Auditors, USA,1997.

Rubino, M. and F.Vitolla, “Internal control over financial reporting: opportunities using the COBIT framework”, Managerial Auditing Journal Vol. 29 No. 8, pp. 736-771, 2014.

Saaty, T.L., The Analytical Hierarchy Process, McGraw Hill, USA, 1980.

Sen, P. and J-B. Yang, Multiple Criteria Decision Support in Engineering Design, Springer, London, 1998.

Martins, H. and G.A. Mendoza, “Multi-criteria decision analysis in natural resource management: A critical review of methods and new modeling paradigms”, Forest Ecology and Management, 3, 1-22, 2006.

Salomon, V.A.P. and J.A.B. Montevechi, “A compilation of comparisons on the Analytic Hierarchy Process and others multiple criteria decision making methods: some cases developed in Brazil”, In Proceeding(s) 6th International Symposium on the Analytic Hierarchy Process, 2001.

Saaty, T.L. and L.G. Vargas, Models, Concepts, and Application of The Analytic Hierarchy Process (2nd edition), Springer, USA, 2012.

Brunelli, M., Introduction to the Analytic Hierarchy Process, Springer International Publishing AG, USA, 2014.

Keeney, R.L. and H. Raiffa, Decisions with Multiple Objectives: Preferences and Value Trade offs, Cambridge University Press, England, 1993.

Gaur, A.S. and S.S. Gaur, Statistical Methods for Practice and Research: A Guide to Data Analysis Using SPSS (second edition), SAGE Publications India, India, 2009.

Dožić, S. and M.Kalić, “Comparison of two MCDM methodologies in aircraft type selection problem”. Transportation Research Procedia, 10, 6, 910–919, 2015.

Saaty, T.L. and K. Peniwati, Group decision making: Drawing out and reconciling differences. Pittsburgh: RWS Publications, USA, 2013.




DOI: https://doi.org/10.24203/ajas.v6i5.5504

Refbacks

  • There are currently no refbacks.


Creative Commons License
This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.