Bapepam issues new regulations for auditors

Rendi A. Witular, The Jakarta Post, Jakarta

The Capital Market Supervisory Agency (Bapepam) said on Tuesday that it had issued a new regulation that required all accounting firms to disclose their audit results when auditing publicly listed companies.

Head of the legal division of Bapepam, Robinson Simbolon, said the regulation was aimed at enhancing transparency and accountability of public accountants and their audited reports to the public investors.

"The regulation is provided to help investors make wiser judgments before conducting any transactions on the stock market," Robinson said.

He said that starting next year, public accountants auditing listed firms should disclose in detail their accounting opinions and reasoning, so that investors could get a comprehensive view of the companies.

The existing regulations do not stipulate such requirements.

Bapepam has also issued another new regulation that would require accounting firms to report to the agency any partnerships or cooperation deals made with foreign-based accounting firms.

Robinson said the existing regulations only obliged the accounting firms to submit their reports to the National Accounting Agency.

However, he explained the report should also be filed with Bapepam to make sure that the accounting firms had complied with capital market regulations.

The new regulations follow the latest accounting problem that hit state-owned telecommunications company PT Telkom.

Telkom, which is also listed on the New York Stock Exchange, was forced to reaudit its 2002 financial accounts by the U.S. Securities and Exchange Commission after an earlier financial report, audited by local auditor Eddy Pianto, was rejected because the auditor had no affiliation with an accounting firm certified by SEC. The reaudit may lead to changes into the earlier report.

But the earlier report had been submitted to the Jakarta Stock Exchange. Under this report, Telkom said it made a net profit of Rp 8.34 trillion in 2002, double the result of the previous year. Investors in the Jakarta market made transactions in Telkom shares on the basis of this report.