Investigative Audit and Forensic Accounting
An investigative audit is an examination to gather and evaluate evidence of alleged financial irregularities, such as embezzlement, procurement fraud, misuse of funds, financial statement manipulation, or debt disputes. The result is a report setting out the facts, the flow of transactions, the parties involved, and the financial impact, which can be used for management decision-making as well as legal proceedings.
Engagements follow a forensic accounting approach: tracing source documents, reconstructing transactions, testing the reasonableness of prices and actual work performed, and seeking clarification from relevant parties. I hold the Certified Financial Investigator (CFI) certification from IAPI.
State Financial Loss Calculation (PKKN)
In corruption cases, the element of state financial loss must be proven to be real and of a definite amount. Investigators may seek assistance from competent parties, including Public Accountants, to calculate state financial loss in the management of the state budget (APBN), regional budgets (APBD), BUMN/BUMD, or grant funds.
PKKN engagements I have handled include official travel, procurement of goods and services, grant fund management, regional expenditure, and the financial management of region-owned enterprises. Engagements have come from High Prosecutor's Offices, District Prosecutor's Offices, and the Police in various regions.
Methods and Working Principles
- Evidence-based. Every figure can be traced to source documents, statements, or confirmation results.
- Independent and objective. Independence is assessed before an engagement is accepted.
- Clear calculation methods. For example, total loss, the difference between the contract price and fair price, or the difference between actual spending and accountability reports, tailored to the facts of the case.
- Ready to be tested in court. Reports are prepared so they can be explained and defended when giving expert testimony.
Institutional Authority
Examination and calculation of state losses may be carried out by BPK, BPKP, APIP, or Public Accountants within their respective authority, while the final assessment and determination of the amount of state loss falls under the authority of BPK and is evaluated by the judge at trial. Recent discussion of this topic is available in News.
Frequently Asked Questions
Who can request an investigative audit?
Law enforcement authorities (Prosecutor's Office or Police investigators), BUMN/BUMD, private companies, foundations, and parties to a dispute through their legal counsel, within the agreed scope.
How does an investigative audit differ from a financial statement audit?
A financial statement audit assesses whether the statements as a whole are fairly presented. An investigative audit focuses on specific alleged irregularities to uncover the facts, modus operandi, parties involved, and the amount of loss.
Can PKKN results be used as evidence?
Calculation results can serve as material for the investigation, and the Public Accountant who performed them can be called as an expert. Their evidentiary weight is assessed by the panel of judges.