Statutory Financial Auditing and Reporting Services in Indonesia – 3E Accounting is Ready to Help!
3E Accounting Helps You Ensure Compliance With the Local Regulations
Investors intending to do business in Indonesia will find that Statutory Financial Auditing and Reporting Services are essential for their business.
Every Indonesia company is required to submit an annual tax report to the relevant regional tax office within four months from the end of the company’s fiscal year. You will receive a reminder through your mobile phone or email account from the tax office regarding your obligation to submit the tax report before the due date.
This due date to file the tax report to the tax office is not to be mistaken with the requirement as per the Company Law No. 40 Year 2007 which stipulated that Director’s from your company shall deliver annual reports to the general meeting of shareholders within a period of not more than 6 (six) months after the company’s financial year ends.
The annual tax reports must contain at least:
- a financial report consisting of at least the last balance sheet for the financial year just ended in comparison with the previous financial year, a profit and loss statement for the financial year concerned, a cash flow report, and a report on changes in equity, and notes on the financial report;
- a report on the company’s activities;
- a report on the implementation of Environmental and Social Responsibility;
- details of problems which arose during the financial year which influenced the company’s business activities;
- a report on the duty of supervision performed by the Board of Commissioners during the financial year just ended;
- the names of the members of the Board of Directors and members of the Board of Commissioners;
- salaries and allowances for members of the Board of Directors and salaries or honoraria and allowances for members of the Board of Commissioners of the company for the financial year just ended.
If your Indonesia company’s annual revenue is more than IDR 50 billion, you are required to get your financial statement audited as well.
Based on Article 68 of Company Law No. 40 Year 2007, the Board of Directors must deliver the company’s financial report to a public accountant for auditing if:
- the company’s business is to collect and/or manage public’s funds;
- the company issues acknowledgements of indebtedness to the public;
- the company is a public company;
- the company is a state-owned liability company;
- the company has assets and/or a business turnover worth at least Rp. 50,000,000,000 (fifty billion Rupiah); or
- it is obligatory under legislative regulations.
Need statutory audit services? Our associated auditors can assist you.
Why Do Businesses Need Statutory Financial Reporting Services?
Accounting standards and regulations are different. They are not the same as those set by United States Generally Accepted Auditing Principles (USGAAP) and International Financial Reporting Standards (IFRS). For that reason, foreign investors may face issues when dealing with the financial regulations in Indonesia.
Furthermore, regulations are continuously changing in Indonesia. Sometimes the changes are so subtle that you might not even notice. Therefore, to remain compliant with the regulations, it is important to engage a professional who will assist you with the financial reporting process. Statutory Financial Reporting is an important procedure for every business accounts to ensure it remains trustworthy and ethical.
In Indonesia, your accounting information must be both transparent and consistent.
Based on the Government regulations:
(1) All companies must submit an Annual Financial Report
(2) The Annual Financial Report is a publicly available document and it contains the followings:
- Balance Sheet;
- Income statement;
- Statement of changes in equity;
- Cash flow statement; and
- Notes to the financial statements that reveal accounts receivable including bank loans and a list of equity participation.
- The annual tax (SPT Tahunan) of the company must be submitted through e-Filing for Taxpayers registered in the Middle Tax Office, the Tax Office within the Regional Office of the Special Jakarta Tax Directorate General, and the Tax Office within the Regional Office of the Directorate General of Large Taxpayer Taxes.
- PPh 21 Income Tax Return and / or PPh 26 Income Tax for a company must be submitted through e-Filing for who are required to submit PPh 21 Income Tax Return and / or PPh 26 Income Tax in the form of electronic documents.
- The VAT Period SPT must be submitted through e-Filing for Taxable Entrepreneurs who are required to submit the VAT Period SPT in the form of electronic documents.
- Taxpayers who do not meet the provisions referred on No. 1,2,3 above can submit through:
- manual submission in person at the relevant tax office;
- post with proof of delivery of the letter; or
- freight forwarding companies or courier services with proof of mail deliver.
Failure to Comply
Failure to comply with the regulations with regards to Indonesian accounting and compliance requirements will result in tax penalties being imposed by the Indonesia Tax Authority. For any late payments, monthly interest penalties ranging from 2% to 48% will be imposed.
Companies which have not complied with the accounting and compliance requirements will fall under the surveillance of the Indonesia Tax Authority.
Why 3E Accounting?
Experience is what matters most when trying to achieve success in business. At 3E, our professionals possess a diverse range of experience across various industries. With insight and knowledge, we are in the best position to assist with your Statutory Financial Auditing and Reporting Services in Indonesia.
Our associated auditors focused approach in auditing, ongoing communication, and expert analysis of the accounting process will guarantee your business always stays on top of the regulation requirements. We want you to stay up to date and informed every step of the way and will be in constant communication with you.
Among the services our associated auditor provide as part of the statutory auditing process are:
- Industry and country-specific focused approach
- Annual review of your audits
- Pro forma account examination
- Review of intermediary settlements
- An analysis of any complex accounting circumstances you may face
- Narrative reporting