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Diagnostic Study of Accounting and Auditing Practices in Indonesia
Written by Neside Tas-Anvaripour and Barry Reid

This report describes accounting and auditing arrangements in Indonesia, identifies deficiencies in those arrangements, and presents recommendations to address those deficiencies.

The study concludes that Indonesian private sector accounting and auditing practices and standards are largely consistent with international best practice. Moreover, Indonesian professional accountancy qualifications compare very favorably with regional and international norms. Nevertheless, Indonesia faces significant issues. This study recommends continued development of standards and practices, and that support is given to facilitate the development, enactment and implementation of the Public Accountants law. It also recommends measures to strengthen the valuation profession.

SEE ALSO

Diagnostic Study of Accounting and Auditing Practices Series Financial Management and Governance Issues Series

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Contents

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Preface, Currency Equivalents, Acronyms, Contents and Executive Summary [ PDF: 377kb | 20 pages ]

1. Introduction [ PDF: 255kb | 13 pages ]
   1. Study Background
   2. Objectives
   3. Scope
   4. The Republic of Indonesia
   5. ADB Focus on Indonesia Financial Governance
   6. International Guidelines and Surveillance
   7. Report Structure

2. Accounting and Auditing in Indonesia [ PDF: 315kb | 26 pages ]

   Part One. Accounting

   1. Introduction
   2. The "Indonesian Accounting System"
   3. Financial Reporting and Disclosure Requirements
   4. The Quality of Financial Reporting and Disclosure

   Part Two. Auditing

   5. Introduction
   6. Auditor Appointment and Dismissal
   7. Auditor Independence
   8. Auditor Reporting Requirements
   9. Auditors Sanctions and Liability
   10. Accounting and Auditing Firms
   11. The 2002 Decree on Public Accountant Services

3. Professional Infrastructure [ PDF: 436kb | 48 pages ]
   1. Introduction
   2. Professional Organization and Regulation
   3. Ministry of Finance (MOF)
   4. Indonesian Institute of Accountants (IIA)
   5. Indonesian Accountancy Qualifications
   6. Other Professional Organizations
   7. The Appraisal (Valuation) Profession
   8. Globalization and Liberalization Challenges
   9. Professional Quality Control and Assurance
   10. The Draft Public Accountant (PA) Law
   11. Issue Synopsis: Professional Infrastructure

4. Accounting and Auditing Standards [ PDF: 251kb | 19 pages ]

   Part One. Accounting Standards

   1. Introduction
   2. Financial Accounting Standards Board (DSAK)
   3. Accounting Standard-Setting Process
   4. Indonesian Financial Accounting Standards (PSAKs)
   5. Conformity with International Accounting Standards (IAS)
   6. Legal Status of PSAKs
   7. Taxation Reporting Requirements
   8. Public Sector Accounting Standards

   Part Two. Auditing Standards

   9. Introduction
   10. Auditing Standard Setting
   11. Indonesian Auditing Standards (SPAPs)
   12. Comaprison with International Standards on Accounting (ISAs)
   13. Public Sector Auditing Standards
   14. Issue Synopsis: Accounting and Auditing Standards

5. Issues and Recommendations [ PDF: 250kb | 18 pages ]
   1. Support PA Law Implementation
   2. Develop Accountancy Qualifications
   3. Provide Training to Lecturers and Professors
   4. Decentralize the USAP
   5. Strengthen CPE Training and Monitoring
   6. Strengthen the Valuation Profession
   7. Support the Application of Valuation Standards
   8. Consider Improvements to PSAKs
   9. Support Indonesian Involvement in UNCTAD-ISAR
   10. Further Develop Auditing Training and Monitoring
   11. Gradually Adopt International Auditing Pronouncements

   Chapter Appendix: Suggestions for Improving PSAKs

   1. Introduction
   2. Suggested Improvements
   3. A Possible Implementation Approach

References [ PDF: 196kb | 7 pages ]

Appendixes [ PDF: 537kb | 98 pages ]