Institutions to formulate standards for internal auditing,
Institutions to formulate standards for internal auditing,
JAKARTA (JP): Bank Indonesia, the central bank, yesterday
assigned American and domestic institutions to formulate
standards for internal bank auditing.
Amir Abbas Sabrudin, a spokesman for Bank Indonesia, said
cooperation with the Institute of Internal Auditors of the United
States and the Indonesian Accountant Association will help
improve the internal auditing systems of banks in the country and
the quality of their financial reports.
Under an agreement signed yesterday, the American institute
will standardize the internal auditing system of Indonesian banks
by formulating general standards on policy, professionalism,
organizations, management, supervision and administration.
In relations to general policies, for example, the concept
will have to describe the mission and authorities of internal
auditors as well as the scope and norms of auditing.
The concept will also include the criteria for internal
auditors and the formulas for the planning, implementation and
reporting of auditing.
The American institute is also required to design a curriculum
for an internal auditors course.
"The internal auditing of Indonesian banks is expected to be
more effective after the implementation of the auditing standards
to be formulated by the Institute of Internal Auditors," Amir
said.
Accounting
Under the other agreement signed yesterday, the central bank
wants the Indonesian Accountant Association to formulate
standards for financial accounting and reporting of banks.
The standards can also be used by companies which list their
shares on the capital market.
Amir explained that the standards to be formulated by the
association will include those for the integration of the
financial reports of a company and its subsidiary or subsidiaries
in a consolidated report and for interim financial reports.
The association is also required to formulate the standard for
investment accounting, which describes revenues from investment
in shares, bonds and other securities, and the standard for the
accounting of mergers and share acquisitions.
The standards to be formulated will also explain how to
calculate the earnings per share of a company and how to disclose
data on transactions among companies with special relations.
"We hope the central bank's cooperation with the accountant
association will help banks and publicly-listed companies to
formulate their financial reports in a standardized way," Amir
said.
According to Law No. 7/1992, banks and publicly-listed firms
are required to publish their financial reports in the mass media
quarterly and semi-annually respectively. (riz)