Evaluation of The Role of Internal Compliance Unit on The Effectiveness of Internal Control
Amy Sabrina Khairunnisa(1*), Yan Rahadian(2)(1) Departement of Accounting, Faculty of Economics and Business, Universitas Indonesia
(2) Departement of Accounting, Faculty of Economics and Business, Universitas Indonesia
(*) Corresponding Author
Abstract
This study aims to evaluate the second line roles in supporting the effectiveness of internal control based on its principles. In the Directorate General of Taxes (DGT), the Internal Compliance Unit serves as its second line of defense. The present study was conducted at the Internal Compliance Sub-directorate which is the Internal Compliance Unit Echelon I level at DGT. Descriptive qualitative research applying a deductive approach with a case study method was carried out to answer the research problems. The criteria used to evaluate the second line roles on the effectiveness of internal control refer to the publication of the Committee of Sponsoring Organization of Treadway Commission (COSO) in collaboration with the Institute of Internal Auditors (IIA) in July 2015 entitled “Leveraging COSO Across the Three Lines of Defense”. The results of the study shows that the operation of UKI in supporting the effectiveness of internal control is quite satisfactory. However, several principles have not been implemented optimally
Full Text:
PDFReferences
Bisnis.com, T. R. (2020). "Eks Pejabat Kantor Pajak Divonis 6 Tahun Penjara Terkait Suap Restitusi Pajak". Retrieved in 1/1/2021, from https://kabar24.bisnis.com/
Bryman, A. (2012). Social Research Methods (4th Edition). New York, United States: Oxford University Press Inc.
Cahyadi, R. (2016). Factors Affecting the Audit Quality of the Internal Compliance Unit (Case Study at the Directorate General of Taxes for Central Java and Yogyakarta Special Region). Master thesis, Universitas Sebelas Maret
CNN. (2020). "Eks Kepala Kantor Pajak Modal Asing Divonis 6,5 Tahun Bui". Jakarta. Retrieved from: HYPERLINK "https://www.cnnindonesia.com/nasional/20200701202552-12-519772/eks-kepala-kantor-pajak-modal-asing-divonis-65-tahun-bui/"
CNN. (2021). "KPK Tetapkan Angin Prayitno Tersangka Dugaan Suap Pajak". Jakarta. Retrieved from: https://www.cnnindonesia.com/nasional/20210504140739-12-638366/kpk-tetapkan-angin-prayitno-tersangka-dugaan-suap-pajak.
Cooper, D. R., & Schindler, P. S. (2014). Business Research Methods (12th Edition). New York, America: McGraw-Hill/Irwin.
COSO. (2013). Internal Control-Integrated Framework Executive Summary, (May). Retrieved from www.coso.org
COSO & The IIA. (2015). Leveraging COSO across the Three Lines of Defense. Retrieved from https://www.coso.org/documents/coso-2015-3lod.pdf
Chizema, A., & Pogrebna, G. (2019). The impact of government integrity and culture on corporate leadership practices: Evidence from the field and the laboratory. The Leadership Quarterly, Vol. 30 (5).
DGT. (2019). Annual Report of the Directorate General of Taxes. Jakarta. Retrieved from www.pajak.go.id
DGT. (2019). Directorate General of Taxes Performance Report. Jakarta. Retrieved from www.pajak.go.id
DGT. (2020). Annual Report of the Directorate General of Taxes. Jakarta. Retrieved from www.pajak.go.id
DGT. (2020). Directorate General of Taxes Performance Report. Jakarta. Retrieved from www.pajak.go.id
Gangl, K., Hofmann, E., & Kirchler, E. (2015). Tax authorities' interaction with taxpayers: A conception of compliance in social dilemmas by power and trust. New Ideas in Psychology, Vol. 37, 13-23.
Gochhayat, J., Giri, V. N., & Suar, D. (2017). Influence of organizational culture on organizational effectiveness: The mediating role of organizational communication. Global Business Review, Vol. 18(3), 691-702.
Hartl, B., Hofmann, E., Gangl, K., Hartner-Tiefenthaler, M., & Kirchler, E. (2015). Does the sole description of a tax authority affect tax evasion? - The impact of described coercive and legitimate power. PLoS ONE 10(4): e0123355.
Henk, O. (2020). Internal control through the lens of institutional work: a systematic literature review. Journal of Management Control, Vol. 31, 239-273.
Huberts, L. (2018). Integrity: What it is and why it is important. Public Integrity, 20:sup1, S18-S32.
Hudson, B., Hunter, D., & Peckham, S. (2019). Policy failure and the policy-implementation gap: can policy support programs help? Policy Design and Practice, Vol. 2 (1), 1-14.
Ipaca.id (2020). Implementation of the Three Lines of Defense towards a Good Governance Structure in Companies. Retrieved from HYPERLINK "https://www.ipaca.id/articles/detail/18/Penerapan-Three-Lines-of-Defense-menuju-Struktur-Tata-Kelola-yang-Baik-dalam-Perusahaan"
Ismail. (2017). Etika Pemerintahan. Norma, Konsep, dan Praktik Etika Pemerintahan. Yogyakarta: Lintang Rasi Aksara Books.
Joseph, O. O., & Kibera, F. (2019). Organizational culture and performance: evidence from microfinance institutions in Kenya. SAGE Open, Vol. 9 (1).
Lapatinas, A., Kyriakou, A., & Garas, A. (2019). Taxation and economic sophistication: Evidence from OECD countries. PLoS ONE 14(3): e0213498.
Moeller, R. R. (2016). Brink’s Modern Internal Auditing:a common body of knowledge (8th Edition). John Wiley & Sons, Inc, New Jersey.
Ministry of Finance. (2019). State Revenue and Expenditure Budget Posture. Jakarta. Retrieved from www.kemenkeu.go.id/apbn2019
Nazuwir. (2018). The Effect of Internal Compliance Supervision on Employee Performance at the Customs and Excise Supervision and Service Office of Intermediate Customs Type B Pekanbaru. Thesis for Master of Administrative Science degree.
Naher, N., Hoque, R., Hassan, M. S., Balabanova, D., Adams, A. M., &
Ahmed, S. M. (2020). The influence of corruption and governance in the delivery of frontline health care services in the public sector: a scoping review of current and prospects in low and middle-income countries of south and south-east Asia. BMC Public Health, 20 (880).
Ndraha. Talizuduhu. (1997). Budaya Organisasi. Jakarta: PT Rineka Cipta.
Neog, Y., & Gaur, A. K. (2020). Tax structure and economic growth: a study of selected Indian states. Economic Structures, Vol. ( (38).
Pertiwi, K. (2018). Contextualizing corruption: A cross-disciplinary approach to studying corruption in organizations. Adm. Sci. Vol 8 (2).
Poerwanto. 2008. Budaya Perusahaan. Yogyakarta: Pustaka Pelajar.
Putra, W. W. F. (2017). Perceptions about the role of UKI (Internal Compliance Unit) and its influence on the performance of the Compliance and Verification of Employee Wealth Department as the second line of defense of the Inspectorate General of the Ministry of Finance. Master thesis, Universitas Jenderal Soedirman.
Rahardjo, M. (2017). Case Study in Qualitative Research: Concepts and Procedures. Universitas Islam Negeri Maulana Malik Ibrahim Malang. Graduate Program, 10-22. Malang.
Republika, T. R. (2018). "Terjaring OTT, Kepala Pajak Ambon Ditahan KPK." Retrieved in 9 December, 2020, from https://republika.co.id/berita/pg2m1m283/terjaring-ott-kepala-pajak-ambon-ditahan-kpk.
Ruslan, Rosady. 2007. Manajemen Public Realtions & Media Komunikasi: Konsepsi dan Aplikasi. Jakarta: PT Raja Grafindo Persada
Savic, G., Dragojlovic, A., Vujosevic, M., Arsic, M., & Martic, M. (2015). Impact of the efficiency of the tax administration on tax evasion. Economic Research-Ekonomska Istraživanja, 28:1, 1138-1148.
Sekaran, U., & Bougie, R. (2016). Research methods for business : a skill-building approach (7th Edition). Chichester, West Sussex, United Kingdom: John Wiley & Sons.
Sihombing, S. O. (2018). Youth perceptions toward corruption and integrity: Indonesian context. Kasetsart Journal of Social Sciences, vol. 39 (2), 299-304.
Szarowska, I. (2014). Personal income taxation in a context of a tax structure. Procedia Economics and Finance, Vol. 12, 662-669.
Tibulca, I.-L. (2021). The impact of the COVID-19 pandemic on tax revenues in the EU. Economic Research-Ekonomska Istraživanja.
Tran, S. K. (2017). GOOGLE: a reflection of culture, leader, and management. International Journal of Corporate Social Responsibility, Vol. 2(10).
Verhoef, P. C., Broekhuizen, T., Bart, Y., Bhattacharya, A., Dong, J. Q., Fabian, N., et al. (2021). Digital transformation: A multidisciplinary reflection and research agenda. Journal of Business Research, Vol. 122, 889-901.
Vo, D. H., Nguyen, T. C., Tran, N. P., & Vo, A. T. (2019). What factors affect income inequality and economic growth in middle-income countries? J. Risk Financial Manag. Vol. 12 (1).
Yin, R. K. (2003). Case Study Research: Design and Methods (Second Edition). Sage Publications, International Educational and Professional Publisher.
Article Metrics
Abstract view(s): 516 time(s)PDF: 573 time(s)
Refbacks
- There are currently no refbacks.
