Accounting for Auditors in Indonesia
Never miss an audit again as 3E Accounting gives you pertinent facts about auditors in Indonesia.
Indonesian laws mandating auditing, preparation of financial statements, and compliance are not codified. Instead, they are to be found in a variety of tax, investment, and company laws, as well as bylaws. As such, it is essential to have auditors in Indonesia to conduct timely audits to ensure compliance.
An audit is an evaluation and tally of all physical and digital data to accounts and financial statements kept by a company. It is carried out by accredited auditors who will examine a company’s income and finances. Auditors then provide a report indicating whether the accounts are an accurate and fair record of a company’s financial statements.
Indonesia’s audit landscape is unique in that global auditing firms need to be affiliated with local audit firms in order to conduct business. Audits are conducted based on Indonesia’s Accounting Standards and Rules (Dewan Standar Akuntansi Keuangan or DSAK). DSAK is regulated by the Financial Services Authority (Otoritas Jasa Keuangan or OJK). The OJK, in turn, is advised by the Indonesian Institute of Accountants (Ikatan Akuntan Indonesia or IAI).
The Indonesian Institute of Public Accountants (Institut Akuntan Publik Indonesia or IAPI) is responsible for adopting auditing standards set by the Audit Standards Committee of IAOI. All audit work by members of IAPI is regulated by the Supreme Audit Board (Badan Pemeriksa Keuangan or BPK).
It is a legal requirement that all companies, public or private, comply with DSAK’s accounting standards, which includes audits. The Limited Liability Company Law No. 40 of 2007 provides guidelines on the preparation of financial statements by corporate entities. State-owned firms must perform both compliance and financial statement audits.
Further, all entities that fall under the purview of the OJK must be audited by an OJK-registered Certified Public Accountant. This is required under the Capital Market Law No. 8 of 1995 and the Banking Law. Entities include all those in the banking industry, the capital markets sector, and non-banking financial industries.
Legal frameworks for foreign investors, on the other hand, are more clearly stated under the Company Law. This statute sets out the accounting standards and obligatory deadlines for audits for foreign-owned companies and investors.
Getting Your Accounting Right
Auditors in Indonesia, as well as audit firms, get their licenses from the Centre for Supervisions of Financial Service (Pusat Pembinaan Profesi Keuangan or PPPK). They are empowered by the Public Accountants Act to inspect work done by auditors and audit firms. The PPK also oversees the professional development of auditors and enforces disciplinary measures.
Auditing is necessary to ensure stakeholders, investors, and equity partners are satisfied with the credibility of a company’s financial dealings. Properly audited accounts also facilitate proper taxation and good corporate governance.
3E Accounting associate offers critically developed auditing methodologies, strategies, and processes that identify risks and weaknesses and propose solutions. The professionals at 3E Accounting apply impeccable knowledge of accounting principles to ensuring compliance with regulatory matters.
Contact 3E Accounting today to reach your business goals with the best auditing and accounting solutions customizable to your every need.