Page 167 - SUSTAINABILITY ISSUES & COVID-19

• Since the beginning of its establishment, there has never been a staff meeting scheduled by KAP X Partners on a
regular basis to remind all staff to implement a quality control system at KAP X.
• Every day, KAP X’s colleague reminds the staff to progress the work so that the work is done quickly and KAP X can
make a bill for the work that has been completed.
• Until the completion of the research, the appreciation given by KAP X for staff who are able to obtain or give clients
to KAP X.
• Some staff get clients for referrals from close friends, relatives, and business relations.
• During the inspection by the IAPI team, the KAP X partner instructed the staff to prepare basic things needed to
fulfill requests from IAPI.
• The results of the IAPI examination found that the SPM at KAP X did not yet have clear policies and procedures, as
well as unclear policies regarding sampling and materiality calculations.

3.2 Observation
Researchers carried out observations on Monday - Tuesday (17-19 June 2019). By carrying out observations, researchers
found some information about activities in the KAP X office area. Researchers made observations and reviews of the
activities carried out by staff in carrying out the quality control system. Thus, the evidence and events under review are
limited to the time the observation is carried out so that it may have an impact on how the quality control system that
applies to KAP is applied. In addition, because this review was only carried out at the KAP X office, the results of this
observation did not include any quality control activities when staff conducted field audits at the client office.

The following are the results of observations carried out at the KAP X office:
• This observation was carried out in the office of KAP X. KAP X only has one office. In the workspace the staff gather
to carry out their respective jobs if there is no scheduled visit to the client.
• There is no dividing wall between the work space of KAP X staff and partners, but there is a partition to limit the
work desk area between colleagues and staff. There is one table and sofa for receiving guests and several meeting
rooms outside the office workspace provided by the co-working space.
• In the corner of the office space there is a shelf that contains published audit reports. There is a KAP X Quality
Control System manual. As stated by the IAPI inspection team, the SPM does not have clear procedures and policies.
• In addition, from the observations made during this observation, the researcher did not see any rule books such as
the code of ethics for the public accountant profession, Financial Accounting Standards, only educational books on
accounting, auditing, taxation in the room.
• At the time of the observation, there were documents scattered on a work table piled together. This document
is a document that contains important information from the client such as bank statements, bank confirmations,
engagement letters, client representation letters, and management letters.

3.3 Observation
Documentation includes testing internal evidence as well as external evidence of every transaction and activity at
KAP X. Generally, in a KAP there are two types of documents, namely internal documents and external documents.
Internal documents are documents that are prepared, created and used only for internal company purposes which
are confidential in nature so that they cannot be published or used for the benefit of parties outside the company.
External documents are documents that are prepared and created by external parties and are used by companies and
customers to represent the company in carrying out transactions and to ensure that the transaction has occurred.

In this study, the researcher explained the evidence (documents) to be examined and the function of the document
related to the format, content, function, and authorization, as well as how the document was distributed to KAP X
personnel. Some of the documents that the researcher could obtain were documents with a date transactions or
activities in April 2019, are:
• Audit Engagement Letter
• KAP X Quality Control Standards
• Attachments to SPM KAP X
• KAP Permit X

166 International Conference on Sustainability
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