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Technology Research and Higher Education. Large
funds must be in line with the ministry program that
must be able to answer the challenges faced by
learners so that it can compete with other countries.
In practice it is not easy, at the level of higher
education the complexity of financial management
has a higher level compared with other educational
levels. Of course, the dynamics that occur should be
addressed wisely, the development of units in higher
education (universities) in addition to developing
and advancing the university, but on the other hand
will bring new complexities in its management. In
line with the increasingly complex university
management, risk points including fraud risk will be
more and more. Inadequate internal control will
open up the width of these points. For that it is
necessary to design an effective control model in
order to suppress fraud so as to achieve university
governance (Fattah and Sumarto, 2013).
Sofianingsih (2012) in his research concluded
that after understanding the types of fraud, auditors
need to understand precisely the structure of good
internal control in order to make efforts to prevent
and detect cheating. According to COSO, the
internal control structure consists of five
components, namely control environment, risk
assessment, control activities and control activities.
If the internal control structure is already in place
and running well, opportunities for undetected
cheating will be much reduced.
For a university that has a rational complexity
must create a pattern of control that can prevent the
occurrence of fraud, so that the ideals to achieve
Good University Governance can be achieved.
2 LITERATURE REVIEW
According to the Committee of Sponsoring
Organization (COSO), internal control is a system,
structure or process implemented by board of
commissioners, management and employees within
a company that aims to provide adequate assurance
that the objectives of such control are achieved,
including the effectiveness and efficiency of
operations, financial reporting reliability, and
compliance with laws and regulations can be
achieved. The definition of internal control
according to Arens (2007) is as follows: "An
understanding of internal control, especially those
controls to the reliability of financial reporting, are
important to the auditor's purposes". Put Romney
and Steinbart (2009) defines internal control as
follows:
Internal Control is an organizational plan and
business method used to maintain assets, provide
accurate and reliable information that encourages
and improves the efficiency of the organization's
road, and promotes compliance with established
policies.
Agoes Sukrisno (2012), internal control is a
process undertaken by board of commissioners,
management and other personnel entities designed to
provide reasonable assurance about the achievement
of three classes of objectives, such as reliability of
financial statements, effectiveness and efficiency of
operations, and compliance with law and
regulations.
If divided into several concepts then:
1. Control is a process in the form of a series of
actions are pervasive and an integral part of the
organization. Internal control is a process to
achieve organizational goals
2. Control is exercised by internal controls not
only composed of policy guidelines and forms,
but run by people from every level of the
organization, which covers the board of
commissioners, management and other
personnel.
3. Internal can be expected to provide reasonable
assurance, not absolute confidence, for entity
management and commissioners.
4. Control is directed to reach interrelated goals:
reporting, finance, betting and operations.
According to Arens and Loebbecke (2009)
Management in designing the structure of internal
control has the following interests:
1. Reliability of Financial Statements
Company management is responsible for
preparing financial statements for investors,
creditors and other users. Management has
legal and professional obligations to ensure that
information has been prepared in accordance
with reporting standards, i.e. generally
accepted accounting principles.
2. Encourage operational effectiveness and
efficiency
Control in an organization is a tool to prevent
unnecessary activities and waste in all aspects
of the business, and to reduce the use of
ineffective and efficient resources.
3. Obedience to laws and regulations.
Good internal control not only provides a
complete set of rules and sanctions. But good
internal control, will be able to encourage
every personal to be able to comply with rules
that have been established and closely related
Implementation of Effective Internal Control in Higher Education
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