Articles

Enhancing the Competency Development Program for New Recruits: A Case Study at Internal Audit & Risk Management Function

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The pandemic created unsettling vulnerability as organization accelerated the shift to digital operations. One bright spot is that asset misappropriation, while still a top category of fraud, was down in the last 24 months perhaps due to more employees working remotely, with limited access to company assets. At the same time, remote working increased risks beyond just digital security. Hence, it is important to have effective internal controls to identify and prevent any kind of fraud. The increasing need for recruiting strong internal audit and risk management functions especially in public company is due to several factors, including increased regulatory scrutiny, greater stakeholder demands for transparency and accountability, and the growing complexity of business operations. With the increasing number of public companies, there is a greater need for effective internal controls and risk management systems to ensure financial reporting accuracy, prevent fraud, and meet regulatory requirements. Internal audit and risk management improve governance, decision-making, and identify risks for organizations. Strong functions require adequate manpower, trained personnel, and resources for effective performance. Group Audit and Risk Management (GARM) in one of public company, working on Internal Audit and Risk Management (IARM). To ensure GARM fulfils its responsibilities as a corporate center, they define Key Performance Indicators (KPIs) that are reviewed semi-annually by the Board of Directors (BOD). Unfortunately, one of the KPIs related to advisory and supporting roles, namely supporting the fulfilment of Group IARM manpower requirements, has not been met since 2013. The purpose of this study is to identify the root cause of the decrease in new recruit manpower fulfilment requests from Internal Audit and Risk Management functions in subsidiaries company and enhance the existing competency program in order to increase participation from Internal Audit and Risk Management functions. Using design thinking method and conducting in depth interview author may determine framework to enhance the programs that are more relevant to the competency needs.

Knowledge Mapping to Improve Organization Capability in Internal Audit of Indonesia Stock Exchange

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In the recent years, the Indonesian Capital Market saw a significant increase in terms of number of investors, daily transaction turnover, transaction frequency, and number of listed companies. This tremendous growth directly affects Indonesia Stock Exchange’s (IDX) to reconsider their knowledge management process to generate optimum results from carry out their responsibilities. As the sole capital market trading infrastructure provider in Indonesia, some of the stock exchange function can only be operated by using knowledge of IDX employee which acquired by years of working experience in IDX.

The objectives in this study were to determine identify the essential knowledge and to define the essential knowledge that needs to be improved in IDX’s internal audit, and then propose an implementation plan to improve knowledge in IDX’s internal audit. The research method used is qualitative methodology through document analysis and key persons interviews interview which was conducted in April 2023. This study uses a variety of knowledge management approaches to address knowledge mapping, knowledge gaps, and knowledge loss. According to the study’s results, the author identifies knowledge gap and offers several recommendations regarding Knowledge Development Program to close the knowledge gap and Knowledge Retention Program to build on the knowledge that Internal Audit already possesses.