Accounting firms told to revise audit reports on SOEs
Fitri Wulandari, The Jakarta Post, Jakarta
The Supreme Audit Agency (BPK) has asked several public accounting firms to revise their audit reports on 34 state-owned enterprises (SOEs) as they did not meet generally accepted accounting standards, a senior government official said.
"The BPK has asked the accounting firms to revise their reports," Mirza Mochtar, director of accounting and appraisal services at the Ministry of Finance, told The Jakarta Post on Tuesday.
Whether or not the accounting firms in question would be sanctioned would depend on an investigation to be carried out by the BPK and the Office of the State Minister for State Enterprise, he said.
Mirza added that he had held talks with the Indonesian Accountants' Association (IAI) about the problem.
"The IAI said that the firms are willing to revise their reports," he said.
Zaenal Soedjais, the chairperson of the IAI promised to take firm action against any of its members who colluded with SOE directors to cook their audit reports, as quoted by Koran Tempo.
Both officials declined to disclose the names of the accounting firms, but Zaenal acknowledged that they included the local units of the world's Big Five.
The BPK has demanded revisions of the audit reports as they did not include compliance reviews as required under the prevailing regulations.
Reports had earlier said that the auditors did not include the compliance review aspect in their audits as it was a relatively new requirement that was only introduced last year.
Experts have said that revising the audit reports by inserting compliance reviews could lead to a change in the auditor's opinions given for certain SOEs.
The 34 SOEs whose audit reports did not meet accounting standards include trainmaker PT INKA, postal service PT Pos Indonesia, insurance companies PT Jamsostek and PT Jasa Raharja, and banknote and security paper company Perum Peruri.
This latest development in the accounting field at home comes amid a string of major accounting scandals in the U.S.
Alleged accounting scams also emerged here during the late 1990s.
Ten firms had audited 37 banks before the 1997 financial crisis. The audit results revealed that the financial performances of the banks were sound.
As the financial crisis struck the country, the banks collapsed like a house of cards due to mismanagement.
Later, a government investigation slammed the accounting firms involved.
Ironically though, most of the firms involved in these cases went unpunished.
Mirza said that the government was currently revising two finance minister decrees on the accountancy profession in a bid to put stricter sanctions in place.
"We are aware of the weaknesses in the system, but we're trying to fix them," he said.
In the revised decrees, he said, public accountants would risk having their licenses revoked without prior warning if they were guilty of significant violations of accounting standards.
SOEs facing accounting woes: (1) PT Pupuk Sriwidjaja, (2) PT Iglass, (3) PT Semen Baturaja, (4) PT Industri Kereta Api (INKA), (5) PT LEN Industri, (6) PT Pupuk Kujang, (7) PT Rekayasa Industri, (8) PT Krakatau Engineering, (9) PT Kawasan Industri Cilegon, (10) PT Perkebunan Nusantara VIII, (11) PT Perkebunan Nusantara IX, (12) PT Perkebunan Nusantara X, (13) Perum Sang Hyang Sri, (14) PT Taman Wisata Candi Borobudur, Prambanan, Ratu Boko, (15) PT Pos Indonesia, (16) PT Perhotelan dan Perkantoran Indonesia, (17) Perum Jasa Tirta, (18) PT Amarta Karya, (19) PT Adhi Karya, (20) PT Virama Karya, (21) PT Wijaya Karya, (22) PT Bank Ekspor Indonesia, (23) PT Bank Mandiri, (24) PT Asuransi Kredit Indonesia, (25) PT Asuransi Jasa Indonesia, (26) PT Jasa Raharja, (27) PT Asuransi Ekspor Indonesia, (28) PT Batam, (29) PT Kawasan Berikat Nusantara, (30) Perum Peruri, (31) Perum Pegadaian, (32) PT SIER, (33) PT Jamsostek, (34) PT Permodalan Nasional Madani.