Accountants question new proposed law on profession

P.C. Naommy, The Jakarta Post, Jakarta

Chairman of the Indonesian Accountants Association (IAI) Ahmadi Hadibroto questioned on Monday the necessity of applying criminal law to accountancy as reflected in the draft of the new law on the accountancy profession.

"Any violations in the profession should be condemned by imposing sanctions, not criminal punishment," Ahmadi asserted on the sidelines of a seminar on The Role of the Accountancy Profession in Indonesia.

He added that the use of the criminal code would discourage young people from joining the profession.

The new bill on the accountancy profession which has been under deliberation since 2002 is aimed at providing a stronger legal foundation for both clients and accountants.

The bill is currently under the scrutiny of an interdepartmental government team and a team from IAI.

Ahmadi also expressed his thoughts on the rotation plan for auditors, which is included in the bill. He said the question remained as to whether it applied to all auditors auditing both private and public companies, or only to auditors auditing public companies.

"Both public and private companies have different interests when it comes to the auditing process. That's why we need a proper definition of the public interests in connection with this," said Ahmadi.

According to the bill, a company may retain the services of an accounting firm for a maximum of three years.

In the seminar, which was attended by the Director General of Financial Institutions Darmin Nasution, Ahmadi also emphasized the importance of upholding accountability, transparency and integrity in earning public trust.

According to him, the International Federation of Accountants (IFAC) should be adopted in Indonesia.

"We need to restore the credibility of the accountancy profession, both nationally and internationally by becoming a member of IFAC," said Ahmadi.

Ahmadi said that all members of IFAC must adhere to the organization's seven-point pledge, which includes the promise to provide quality assurance and apply international standards in auditing.

Ahmadi said that the World Bank had offered two grants totaling US$256,000 to help maintain quality assurance and to translate the international standards of IFAC on accounting into the Indonesian language.

"We are now waiting for the response of the minister of finance on these grants," said Ahmadi.

Completion of the translation is expected before the end of this year.