BPK wants authority to audit FSAI

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.