Eddy Pianto defends firm's audit of Telkom

The Jakarta Post Jakarta

Accounting firm Eddy Pianto stands by its audit of the 2002 financial report of state-owned telecommunication company PT Telekomunikasi Indonesia (Telkom).

The firm's owner, Eddy Pianto, told The Jakarta Post by telephone from Australia that PriceWaterhouseCoopers (PWC) played a role in the rejection of Telkom's report by the United States Securities and Exchange Commission (SEC).

He explained that the primary reason behind the rejection by SEC of Telkom's financial report was because PWC, as the auditor of Telkom's cellular unit PT Telekomunikasi Selular (Telkomsel), refused to give its consent for Telkom to include Telkomsel's audit in its SEC filing.

"According to SEC regulations, this is not an issue related to the Eddy Pianto accounting firm, but rather an issue between Telkom and the auditor of its subsidiary, in this case PWC," said Eddy.

However, PWC in a press statement signed by partner Irhoan Tanudiredja said that it was unable to give any comment on the accusation, because of the firm's "current engagement with Telkom".

Telkom, which is listed at the Jakarta Stock Exchange and the New York Stock Exchange (NYSE), was forced by SEC to re-audit its 2002 financial accounts after the one audited by Eddy Pianto.

SEC has yet to announce the reason behind the rejection but some speculate it was because Eddy Pianto had no affiliation with an accounting firm certified by SEC.

However, Eddy blasted the speculation.

"There are no regulations at the SEC regarding qualifications for acceptance of foreign auditors, only that they should be knowledgeable regarding U.S. generally accepted accounting principles (U.S. GAAP), U.S. generally accepted auditing standards (U.S. GAAS), the SEC rules and other pronouncements with respect to accounting and auditor independence and that the firm is in good standing in its country origin.

"These principles were all followed in the Telkom audit," Eddy said.

The SEC has given Telkom until July 15 to resubmit the audited financial report. If it fails, the SEC will remove Telkom from the NYSE. However, the deadline has been extended several times.

In June, Telkom appointed PWC to do the audit.

While insisting that affiliation with a SEC-certified firm was not a requirement of the SEC, Eddy noted that it had an affiliation with Grant Thornton International during the auditing of Telkom, which is certified by the SEC. He said the affiliation was effective until after the Telkom audit was concluded by the firm.

The firm's affiliation with Grant Thornton was effective until March 31, 2003, while the Telkom audit was completed on March 25.

According to Eddy, his accounting firm is now affiliated with Kreston International.