Many accounting firms caught misbehaving<\/p>\n
JAKARTA (JP): A number of registered public accounting firms
\ninvolved in the auditing of several closed banks' assets
\ncommitted malfeasance, according to a senior official at the
\nMinistry of Finance.<\/p>\n
Darmin Nasution, director general for the supervision of the
\nfinancial institutions, said the irregularities were found during
\na joint audit conducted by the Ministry of Finance and the
\nDevelopment and Finance Audit Agency (BPKP) last year.<\/p>\n
As a consequence, many of the audit reports issued by the
\naccountants did not reflect the true condition of the banks,
\nDarmin said following a meeting with Supreme Audit Agency head
\nSatrio Budihardjo Joedono.<\/p>\n
Between 1998 and 1999, the government appointed several
\nregistered public accountants to audit about 200 commercial
\nbanks, as part of the restructuring program for the country's
\nbattered banking industry.<\/p>\n
Based on the audit results, the government undertook a number
\nof measures, including closing down several private banks and
\nrecapitalizing other banks to improve their performance.<\/p>\n
However, BPKP later discovered that several public accountants
\nappointed to carry out the due diligence process did not conduct
\ntheir duties properly.<\/p>\n
Although several accountants were involved in the malfeasance,
\nthe Ministry of Finance did not impose any sanctions on them,
\nDarmin said.<\/p>\n
\"Instead, the government only issued warning letters, as the
\nprocedure suggested,\" he added.<\/p>\n
According to Darmin, the Ministry of Finance is drafting a new
\nregulation that will allow it to impose adequate sanctions,
\ninluding permit cancellation or closure of the accountant's
\noffice, in order to prevent similar impropriety from occurring in
\nthe future.<\/p>\n
The accountants' malpractice has also caused significant
\nlosses to the state, especially in relation to the extension of
\nBank Indonesia liquidity support. (03)<\/p>",
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