Government suspends two public accountants

Urip Hudiono, The Jakarta Post, Jakarta

Continuing the government's fight against investment fraud, Minister of Finance Yusuf Anwar announced on Thursday the license suspensions of two public accountants on the grounds of professional misconduct.

Yusuf suspended the licenses of public accountants Selamat Sinuraya and Irawati Kusumadi for three months as of Oct. 19. Irawati's firm would also be disallowed from practicing accountancy for the same period.

Ministry officials said investigations had led to the conclusion the accountants had violated Article 24 of Ministerial Decree No. 423/KMK.06/2002, as amended by Ministerial Decree No. 359/KMK.06/2003, on public accounting services.

The articles require public accountants to conform with set national standards of professionalism and with a code of ethics during the auditing of company financial reports.

The officials did not explain the detail of the violations or whether the accountants would face criminal investigations.

Earlier this month, Yusuf revoked the license of public accountant Bombongan Panjaitan, and suspended the licenses of accountants Hakim Murni and Lodewijk Purba, as well as their accounting firms, for 12 months as of Sept. 22.

Public accountants are usually hired by corporations and other entities to audit their financial reports. Investors and financial analysts use these reports to help them make judgments about the true value and prospects of a company. Banks, meanwhile, also rely on the reports when they approve credits for a company.

The suspensions came after several cases of questionable audits surfaced recently.

Beverage firm Coca-Cola Co, a subsidiary of European food giant Nestle SA, recently reported Jakarta-listed drinking water company PT Ades Alfindo Putrasetia to the U.S. Securities and Exchange Commission for inflating its sales volumes since 2001.

Auditor Dedy Saefudin has claimed the audit was based on actual figures and that no violations had been committed.

That case is currently under investigation here.

Economist Faisal Basri, meanwhile, praised the suspensions of the accountants and said that they would help create a more positive sentiment toward the country's markets.

"It is certainly good news, amid the many indications that public accountants here collude with the companies that hire them to polish up their financial reports," he said.

Faisal said the move would help raise the public's trust of accountants and of the country's stock market.

"It will, in the end, improve the country's general investment climate," he said.

Warning that the move would likely spark protests from the public accountant community, Faisal said the ministry should not be deterred as long as it had a firm legal basis for its actions.

In a related move against investment fraud, Yusuf has set up the special Unit for Investigation (IBI) inspectorate to probe corruption and bribery within the ministry.