New accounting standard may still leave doubts<\/p>\n
Sandy Darmosumarto, The Jakarta Post, Jakarta<\/p>\n
Supreme Audit Agency (BPK) Chairman Satrio Budihardjo (Billy)
\nJoedono said on Friday the new state accounting standard to be
\nimplemented in all state-related institutions nationwide in 2005
\nwill not guarantee that auditors will clear financial report
\ndisclaimers.<\/p>\n
Billy explained that the disclaimers were attached to state
\nbudgets in past years during discussions on the new accounting
\nstandard, which is currently being drafted by the agency and the
\nfinance ministry.<\/p>\n
He said, "a disclaimer means the auditor has no basis on which
\nto declare that the figures presented in budgets are accurate.<\/p>\n
"Over the past four years the agency has not been convinced of
\nthe numbers reported by the government. We could not affirm
\nwhether state transactions were conducted in an appropriate way."<\/p>\n
Billy added that despite the new standard, it would still be
\npossible for the agency to attach disclaimers to any budget.<\/p>\n
BPK noted that there are two reasons why BPK would attach a
\ndisclaimer. One is the effect of different accounting systems
\nadopted by different government institutions. Another is an error
\nin calculations.<\/p>\n
A disclaimer would be attached based on whether or not the
\nagency felt that a particular state institution has applied the
\nnew mechanism to check the accuracy of the reported state
\nfinancial balance and assets owned by the government.<\/p>\n
Under the current standard, "all expenditure for fixed assets
\nsuch as buildings is considered lost spending," stated Billy.<\/p>\n
This results in a distorted value for state inventory. On the
\ncontrary, the new standard, when implemented across the country,
\nwill have new asset measurement mechanisms that allow the agency
\nto more accurately value assets, including buildings and foreign
\ncurrency.<\/p>\n
Once the new standard comes into effect, "there will not be an
\ninventory of the state's wealth; instead, there will just be a
\nlist of the government's assets," stated Billy. "These include
\nbanks, fixed and variable assets, claims, savings, cash, and
\nbanks." why is banks mentioned twice?<\/p>\n
Additionally, Billy said, "the problem lies in the
\ngovernment's failure to follow a standard that it ought to use in
\ncalculating state budgets.<\/p>\n
"Government financial reports do not exist. Instead, what
\nexists now are calculations on state budget," stated Billy.<\/p>\n
The current state accounting practices utilize a single-entry
\nmethod, not double-entry as planned in the new standard. The
\ndouble-entry method will resemble the financial reports produced
\nby private companies, in which a single transaction is recorded
\ntwice in terms of debit (loss) and credit (gain).<\/p>\n
The new bookkeeping standard is currently it its last stages
\nof completion and is expected to be completed in June next year.
\nIt will become the guideline for BPK to grade the completeness
\nand clarity of government financial reports.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/new-accounting-standard-may-still-leave-doubts-1447893297",
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