Bapepam issues new regulations for auditors

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.