BPK wants authority to audit FSAI

The Jakarta Post, Jakarta

The Supreme Audit Agency (BPK) said on Friday it should be given the authority to audit the financial state of the powerful Financial Services Authorities Institution (FSAI).

According to the current guidelines developed by the government, FSAI's financial reports should be audited by an appointed public accountant.

"That's not how it's supposed to be; BPK should be the one with the authority to audit its financial reports, because FSAI will become a state institution that obtain revenues from nontax income," BPK chief Satrio B. Judono told reporters.

The government is planning to set up the FSAI in 2004. It will supervise various financial services providers in the country, including banks, insurance companies, securities firms, publicly listed companies, mutual funds and pension funds.

The government is now drafting a bill to become the legal basis for the institution. The bill will be proposed to the House of Representatives later this year.

The need to set up such an institution surfaced amid increasing challenges within the financial services sector, as it faced more complex problems.

The government claimed that the products of the financial services sector had become more diversified within the current globalization era, and there were rapid innovations in finance- related technology.

Although the establishment of FSAI would eventually limit the scope of authority currently held by Bank Indonesia and the Capital Market Supervisory Agency (Bapepam), the two institutions have welcomed the plan.

However, many, including the public, have raised concern on how the new institution should be supervised.

With such a wide remit, a clear job description and scope of authority would be a crucial inclusion in the draft bill, to avoid misperceptions and overlapping regulations, critics said.