Risk Based Internal Audit Based on Culture (Case Study at LPD Desa Adat Pecatu in Bali)

Abstract

Risk Based Internal Audit (RBIA) based on culture has been implemented by Lembaga Perkreditan Desa (LPD) to minimize risks that occur in the management of LPD, and created the synergy of leadership and supervision and risk management that conducted by LPD Chairman, Board of Supervisors, and Prajuru of Desa Adat Pecatu. LPD is an indigenous community-based financial institution that has perceived benefits for rural communities in particular, in the context of the development of social economy. The sample in this study is LPD of Desa Adat Pecatu in Badung District which already has Awig-Awig and Perarem on its own in the management of its business and has articulated risk management implicitly. This study showed that governance of LPD Desa Adat Pecatu has implemented its role and responsibilities of Board of Supervisors of LPD as an internal auditor in carrying out the supervision and control of the business involving the risk management to maximize performance. Tri Hita Karana and Catur Purusha Artha, as an element of culture becomes the operational basis in the management of business risks of LPD Desa Adat Pecatu. This is confirmed by the presence of Awig-Awig and Pararem of Desa Adat Pecatu as the basis for managing the riskbased on culture.

Keywords: LPD, Risk Based Internal Audit Based on Culture, Tri Hita Karana and Catur Purusha Artha