Government drafts new bill on accountancy profession<\/p>\n
Fitri Wulandari, The Jakarta Post, Jakarta<\/p>\n
The government is drafting a new bill on the accountancy
\nprofession in a bid to help prevent misstatements and
\nmisrepresentations in audited financial reports.<\/p>\n
Mirza Mochtar, director of public accounting and appraisal
\nservices at the Ministry of Finance, said the new bill would
\nprovide better legal protection for both clients and accountants.<\/p>\n
\"The bill aims to provide a stronger legal foundation for both
\nclients and accountants, including protecting clients from being
\ndefrauded by their accountants,\" Mirza told The Jakarta Post on
\nWednesday.<\/p>\n
In the wake of the Enron and WorldCom scandals involving
\nArthur Andersen, one of the world's big five accounting firms,
\npublic accountants worldwide have been under fire for allegedly
\ncooking their clients' books.<\/p>\n
However, Mirza claimed that the bill did not have anything to
\ndo with the latest financial scandals.<\/p>\n
\"The current law on the accountancy profession was out-of-date
\neven when it was put on the statute books in 1954. It is no
\nlonger appropriate for current conditions. That's why we need to
\ndraft a new one,\" he said.<\/p>\n
According to Mirza, his directorate had set up a team to draft
\nthe bill. After the draft was finished, the next step would be to
\nform an inter-ministerial team to discuss the draft.<\/p>\n
The inter-ministerial team would consist of officials from the
\nMinistry of Justice, the Ministry of Finance, and the State
\nSecretariat.<\/p>\n
Mirza said that according to the bill, any public accountants
\nfound violating professional ethics and standards would have
\ntheir licenses revoked by the government without prior notice.<\/p>\n
He added that the bill would also open the possibility for
\ncriminal charges to be laid against accountants or accounting
\nfirms who deliberately made misstatements or misrepresentations
\nin financial reports.<\/p>\n
\"It is difficult to bring accountants before the criminal
\ncourts as the current ministerial decree does not authorize the
\nfiling of criminal prosecutions,\" he explained.<\/p>\n
The new bill also provides that a company may only retain an
\nthe services of an accounting firm for a maximum of four years.
\nUnder the current law, there is no such limitation.<\/p>\n
Mirza added that the new bill would also force accounting
\nfirms to give up their consulting services to avoid conflicts of
\ninterest.<\/p>\n
Another crucial change under the bill, Mirza said, was that
\nthe government would conduct a regular review of accounting
\nfirms.<\/p>\n
The reviews would be held annually to asses the performance of
\nthe firms and to see if they had carried out their work in
\naccordance with the set standards and rules.<\/p>\n
He added that in the wake of complaints from the public, the
\ngovernment could also institute special reviews.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/government-drafts-new-bill-on-accountancy-profession-1447893297",
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"sponsor": "Okusi Associates",
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