Govt drafts bill on accounting<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The Ministry of Finance is currently drafting a new bill on
\nthe accountancy profession, which will replace the existing
\noutdated law issued in the 1950s.<\/p>\n
The Ministry of Finance said, in a press statement on Sunday,
\nthat the new bill would not only provide better protection for
\nboth clients and accountants, but also accommodate the complex
\ndevelopment in trade liberalization and technology.<\/p>\n
The drafting of the new bill comes amid rising financial
\nscandals both at home and overseas, involving huge companies and
\ngiving rise to allegations that accountants have often cooked
\ntheir clients' books.<\/p>\n
The statement said that the new bill will prohibit public
\naccountants from doing their jobs if they are not independent.<\/p>\n
Individually, public accountants will not be allowed to make a
\ngeneral audit for a particular client for more than three years
\nin a row.<\/p>\n
Public accountants will not be allowed to have a side job at
\nanother institution -- both state and private -- unless it is a
\nteaching job at a university.<\/p>\n
In addition, public accounting firms will not be allowed to do
\naudit work for a client for more than five successive years. And
\nin doing audit work, the firm must be independent, meaning that
\nit must not have a conflict of interests.<\/p>\n
Public accounting firms will be banned from providing services
\noutside finance, accounting and management. This will force
\naccounting firms to end additional consultancy services, thus,
\navoiding a conflict of interests.<\/p>\n
It will also be required that working papers must be kept for
\n10 years, and an accountant's office must be isolated from other
\nactivities.<\/p>\n
Public accounting firms will be immune from legal charges if
\ndisclosing a crime committed by a client.<\/p>\n
But, both public accountants and public accounting firms will
\nbe held legally responsible for all services they provide.<\/p>\n
Sanctions for violating the law range from an administrative
\nsanction to a financial penalty and a jail term of between one
\nyear and six years.<\/p>\n
Administrative sanctions include freezing the accountant's
\nlicense and revoking the accountant's license.<\/p>\n
A client, or other parties who have suffered losses as a
\nresult of misstatements or misrepresentations in audit reports,
\ncan file legal charges.<\/p>\n
Criminal charges include a penalty of between Rp 50 million
\nand Rp 300 million for an accountant, and between Rp 100 million
\nand Rp 2.5 billion for a public accounting firm.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-drafts-bill-on-accounting-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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