IAI cannot halt malpractice among public accountant
JAKARTA (JP): The Indonesian Association of Accountants (IAI) said yesterday that malpractice was common among public accountants, but insisted it could do nothing to stop it if clients collaborated with their accountants.
IAI's chairman, Soedarjono, said the association could only expel members for unethical practice if clients reported malpractice or complained.
"Unless the client makes a big fuss about it, there is really nothing we can do," he said.
Soedarjono is also chairman of the Development Finance Comptroller. He was answering questions on the IAI's authority over its members.
Sources have said accountants were known to have fabricated financial reports -- often with their clients' consent -- to mislead those who use the reports.
The sources said a company might issue three different financial statements: one for its shareholders, so management can get shareholders' approval; one for the tax office, allowing it to pay less tax; and one for its creditor banks, to get bigger loans.
Soedarjono said IAI could only expel a member if he or she were found guilty of malpractice.
The association could only do this after a thorough investigation by the association's Board of Controllers, with approval from the higher-level Board of Advisors.
"Although the association can't revoke (a member-) public accountant's practicing license, our recommendations influence the Ministry of Finance's decision to issue -- or revoke -- a license to practice," he said.
Exams
Soedarjono said yesterday the association was planning to hold special exams to regulate the quality and professional capability of registered accountants who work as public accountants.
The Ministry of Finance's director for accounting and assessment services, Kartomo Wirjobroto, said it was important to standardize the quality of local public accountants so they can compete against foreign professionals when Indonesia joined the regional free trade areas (ASEAN and the Asia and Pacific region).
"Accounting is a very popular profession and almost all member-economies in the World Trade Organization (WTO) insist that the sector be opened soon," he said.
Kartomo said this was why the government, and IAI, considered it necessary to conduct the exams, "so Indonesian public accountants are compatible with foreign ones when they are exposed to global competition".
He said exams were also important to protect the public from "accountants of low quality, lack of professional standards, no dedication and questionable integrity".
Those eligible to sit the exams are university graduates of accountancy who are registered at the Ministry of Finance, who may or may not be practicing as public accountants.
Kartomo said the exams would be held twice a year, in March and September, in Jakarta, Surabaya, Medan and Ujung Pandang. But this first year, they would only be in Jakarta, in September.
"Those who pass will be given the title 'certified public accountant'. We hope to achieve a quality similar to that of the CPA accreditation in the United States," he said. (pwn)