Bappepam tightens up accountancy rules<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The Capital Market Supervisory Agency (Bapepam) has issued a
\nnew regulation that bars a listed company from using the same
\npublic accountant or accounting firm for more than five years in
\norder to help ensure the continued objectivity of audits.<\/p>\n
Under the new ruling, set out in Bapepam Regulation No.
\nVIII.A.2. on the independence of accountants, audit services
\nprovided by an accountant or an accounting firm in respect of a
\nclient's financial statements should be limited to three and five
\nyears respectively, the agency said in a release.<\/p>\n
\"The new ruling is aimed at making accounting firms and
\naccountants more independent, which will eventually increase the
\nquality of the financial statements issued by listed companies so
\nthat they become more transparent and trustworthy,\" the release
\nsaid.<\/p>\n
As for those affected by the regulation but already bound
\nunder a contract, Bapepam would allow the present arrangements to
\ncontinue until the next fiscal year.<\/p>\n
The ruling also forbids auditors from providing other
\nconsultancy services to the same client during the audit period.
\nDuring this period, auditors would also be banned from having a
\nbusiness relationship, directly or indirectly, with clients, key
\nofficers of clients, or the main shareholders of clients.<\/p>\n
The ruling comes amid mounting calls for tighter supervision
\nof accountancy practices in the country as a way of ensuring that
\nthe lessons from a string of financial frauds in the U.S are
\nlearned.<\/p>\n
The world was recently stunned by a series of high-profile
\nbookkeeping scams, especially in the U.S. Major financial frauds
\nin giant firms Merck, WorldCom and Enron were only a few of the
\nmore prominent examples.<\/p>\n
These cases have proven contagious and have shattered investor
\nconfidence around the world, including in Indonesia.<\/p>\n
Experts have warned that if such frauds could take place in a
\ncountry like the U.S., whose control mechanisms were already
\nquite sound, it was quite frightening to think what might be
\nhappening in Indonesia.<\/p>\n
Therefore, tighter regulations were badly needed to prevent
\nsimilar frauds from occurring here and to provide investors with
\nbetter protection.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bappepam-tightens-up-accountancy-rules-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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