Universiti Malaysia Kelantan (UMK) recently hosted a successful and insightful guest lecture titled “Indonesia Current Issue on Fraud Audit: Case Study on Economic Business and Accounting,” on Monday, 10 June 2024.
The event featured Dr. Novi Darmayanti, a distinguished senior lecturer from Universitas Islam Darul ‘Ulum Lamongan, Indonesia, who shared her expertise on pressing fraud issues within Indonesia’s business and accounting sectors.
Key Highlights and Impact:
The lecture was part of the Integrated Case Study course, organized by the course coordinator, Dr. Amira binti Jamil. The course is designed to provide accounting students with a deep, practical understanding of complex business scenarios, bridging the gap between theoretical knowledge and real-world application. Dr. Amira’s initiative to bring in a subject matter expert like Dr. Darmayanti added significant value to the curriculum by giving students firsthand insights into the challenges of fraud auditing.
Dr. Darmayanti’s lecture captivated the audience, comprising students, faculty members, and professionals, by shedding light on the intricacies of fraud cases in Indonesia. A focal point of the session was the analysis of the notorious PT. Insurance Jiwasraya (Persero) case, where significant financial mismanagement and corruption led to losses exceeding IDR 16 trillion. This case was used as a prime example to illustrate the devastating impact of fraud on both a national and individual scale.
The PT. Insurance Jiwasraya (Persero) case is one of the most significant financial scandals in Indonesian history. The case involved the state-owned insurance company engaging in fraudulent investment practices, which were uncovered in 2018. The company’s management had manipulated financial reports to hide losses and present a healthy financial position to regulators and investors. This deception allowed them to attract more customers and investments, ultimately leading to a massive financial collapse when the truth was revealed.
The speaker detailed how the fraudulent activities were orchestrated through complex financial instruments and high-risk investments that were not disclosed properly in financial statements. These actions not only violated financial regulations but also breached the trust of millions of policyholders who relied on the company for their insurance needs. The fallout from this scandal led to widespread public outrage, significant legal actions, and a major overhaul of the financial regulatory framework in Indonesia.
Key Takeaways:
Dr. Darmayanti meticulously dissected the PT. Insurance Jiwasraya case, emphasizing how weak internal controls and unethical leadership can lead to catastrophic outcomes. The session highlighted the importance of robust auditing practices and stringent regulatory oversight to prevent similar incidents in the future.
The lecture stressed the role of ethical standards in business operations, drawing attention to the need for a strong ethical culture within organizations. Dr. Darmayanti urged students and professionals to uphold integrity in their future careers, making it clear that ethics are the backbone of sustainable business practices.
The students found the lecture particularly beneficial as it bridged theoretical knowledge with real-world applications. The detailed case study provided a practical understanding of fraud detection and prevention, enriching their academic experience and preparing them for the complexities of the financial world.
The interactive session following the lecture allowed students and participants to engage directly with Dr. Darmayanti, discussing the challenges of fraud detection in the digital age. This exchange of ideas fostered a deeper understanding of the subject and left participants with valuable insights to consider in their studies and careers.
Impact on Participants:
The guest lecture had a profound impact on the participants, especially the students, who left the session with a clearer understanding of the real-world implications of fraud in the business world. The lecture not only enhanced their knowledge of fraud auditing but also inspired them to consider the ethical dimensions of their future roles as accountants and auditors. Faculty members also appreciated the session, recognizing its contribution to enriching the university’s academic offerings. Overall, the lecture was a resounding success, reinforcing UMK’s commitment to providing its students with access to global expertise and fostering a learning environment that bridges academic knowledge with practical industry insights.
