FM-BINUS-AA-FPU-78/V2R0

BINUS University

Academic Career: Class Program:

Undergraduate / Master / Doctoral *) International/Regular/Smart Program/Global Class*)
Term : Odd/Even/Short *)
√ Mid Exam  Final Exam
 Short Term Exam  Others Exam : _____________

√ Kemanggisan √ Alam Sutera √ Bekasi Academic Year :

 Senayan  Bandung  Malang 2020 / 2021

Faculty / Dept. : Economics and Communication / Deadline Day / Date : Tuesday / 27-Apr-21
Accounting and Finance Time : 17:00:00
Code - Course : ACCT6062 - Financial Audit I (Delivery in Class : LA16, LA53, LB53,
English) LC53, LD53, LE53,
LA55, LB55, LA90,
LB90
Lecturer : Team Exam Type : Online

) Strikethrough the unnecessary items
The penalty for CHEATING is DROP OUT!!!

Essay (40%)

1. In auditing we know the term internal control over financial reporting. When conducting audit
for client’s financial statement. Which one of this test is conducted first, substantive test or test
of control? Explain your answer! (20%)
2. Provide two example of pressure, opportunity and rationalization for each misappropriation of
asset and fraudulent financial statement! (20%)
No Pressure Opportunity Rationalization

1 Misappropriation
of asset
2 Misappropriation
of asset
1 Fraudulent
financial
reporting
2 Fraudulent
financial
reporting

Verified by,

[Bambang Leo Handoko] (D5271) and sent to Department/Program on MAR 22, 2021
Page 1 of 4
 FM-BINUS-AA-FPU-78/V2R0

Case (60%)

3. PT Hanson International Tbk. Finally, restatement the financial statements for the 2016 and
2017 financial years in accordance with the orders of the Financial Services Authority. OJK asked
Hanson International to resubmit the financial statements for the 2016 and 2017 financial years
because the company was proven to have committed a violation by recognizing revenue from
the sale of ready-to-build lots with a gross value of Rp732 billion using the full accrual method in
the annual financial statements for the period 31 December 2016.

Restatement of 2017 financial statements audited by public accountant Moch. Dadang

Syachruna from the Public Accounting Firm (KAP) Purwantono, Sungkoro & Surja, partner of
Ernst & Young. Meanwhile, the 2016 financial report restatement was audited by public
accountant Sherly Jokom from the same KAP. In his note, the auditor stated that the
consolidated financial statements as of December 31, 2017 and December 31, 2016 were
restated to correct the recognition of revenue from land sales. In note 39, the income referred
to is the sale of land or ready-to-build land (Kasiba) transactions to PT Asabri (Persero) because
of different views on the legal position of documents related to the sale transaction in applying
the accounting standard for revenue recognition based on PSAK No.44 " Accounting for Real
Estate Development Activities "as concluded in the written order of the OJK in letter No.S-38 /
PM.1 / 2019 dated 11 July 2019.
The Financial Services Authority (OJK) imposed sanctions on the partner public accounting firm
of Ernst and Young (EY) because it was considered inaccurate in the presentation of the financial
statements of PT Hanson International Tbk (MYRX). For this mistake, OJK has sanctioned to
freeze the Registration Certificate (STTD) for one year. Deputy Commissioner for Capital Market
Supervision Djustini Septiana in her letter said that Sherly Jokom of the Purwantono, Sungkoro
and Surja Public Accountants Firm was proven to have violated the capital market law and the
code of ethics for the public accountant profession of the Indonesian Institute of Certified Public
Accountants (IAPI).

Sherly was proven to have violated Article 66 UUPM jis. Paragraph A 14 SPAP SA 200 and Section
130 of the Code of Ethics for the Professional Public Accountant - Indonesian Institute of
Certified Public Accountants. OJK assessed that this KAP had committed a violation because it
was not careful and thorough in auditing PT Hanson International Tbk's financial statements.
(MYRX) for the financial year of December 31, 2016.

The mistakes made by the auditors were unprofessional in implementing audit procedures
related to whether the annual financial statements of MYRX contained material errors that

Verified by,

[Bambang Leo Handoko] (D5271) and sent to Department/Program on MAR 22, 2021
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 FM-BINUS-AA-FPU-78/V2R0

required changes or not on the facts known by the auditors after the financial statements were
published. The error referred to by OJK is an overstatement with a value of up to Rp 613 billion
due to the recognition of revenue using the full accrual method for transactions with a gross
value of Rp 732 billion.
In addition, the financial report also does not reveal the existence of a Sale and Purchase
Agreement (PPJB) for ready-to-build lots (KASIBA) dated July 14, 2019, which was carried out by
Hanson International as a seller.

Question:
a. In this case, the auditor committed negligence or fraud? Explain your answer! (10%)
b. Because of this fraudulent financial reporting, whose side suffers the loss at most? Explain
your answer! (10%)
c. According to your analysis, what mistakes auditor did, and how they should act! (10%)

4. Corporation B is Distribution Company which engaged in furniture and home appliance business.
Their business process is selling furniture products to dealer which is traditional retail store and
modern market supermarket. Top management of Corp. B set a policy that for sales, the provide
credit sales with term of payment of 30 days with 3% of sales discount when customer paid on
time. The director also gives policy that customer able to pay their payable using cash, transfer
to corporation bank account, check, even post-dated check. The reason is to make it easy for
customers to pay. The company opens wide opportunities for customers to pay by various
payment methods or media. The other issue is that in Corporation B, selling and account
receivable collection were handled by salesman, no collection department.
A process like this continues to run, until someday, a case arises when a salesman run away
with/steals cash receipts from customers. The stolen amount of money is quite large; it counted
as several times of that salesman monthly salary.
To make it even worse, this fraud was discovered after 2 weeks from the day of the incident,
because the receivable account recording employee rarely confirms to the customer

Question:
a. According to above case, explain your analysis regarding internal control weakness in
Corporation B! (15%)
b. Provide your recommendation to the future selling activity of Corporation B! (15%)

Verified by,

[Bambang Leo Handoko] (D5271) and sent to Department/Program on MAR 22, 2021
Page 3 of 4
 FM-BINUS-AA-FPU-78/V2R0

☺☺☺There are no secrets to success. It is the result of preparation, hard

work learning from failure ☺☺☺

Verified by,

[Bambang Leo Handoko] (D5271) and sent to Department/Program on MAR 22, 2021
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