'Strong sanctions against bad accountants a must'

A'an Suryana, The Jakarta Post, Jakarta

A senior legislator supported the government's move to draft a new bill on the accounting profession, saying that the ruling could help ensure good corporate governance in Indonesia.

Learning from the current accounting scandals in the U.S., the bill should impose stiffer sanction for delinquent accountants to deter them from fraud in the future, said Faisal Baasir, deputy head of the House of Representatives Commission IX on financial affairs.

"The new bill is vital to assure legal certainty for investors as all cases related to accounting frauds would have been regulated once the bill is passed into a law," he told The Jakarta Post Friday.

Faisal acknowledged that the new bill had yet to reach the hands of the legislators, as it was still being drafted by the government.

"The sooner is better," said Faisal, who pledged that legislators would push for imposing strong punishment, including jail terms for bad accountants.

The finance ministry's directorate for public accounting and services is currently drafting the new accounting profession bill.

The comment was made in the wake of major accounting scams in corporate America, which have also sent adverse sentiments to financial markets in the world, including Indonesia.

U.S. President George W. Bush has called for stricter measures and harsher punishment for delinquent accountants.

Despite the current general mood that delinquent accountants must be harshly punished to prevent other accounting fiascoes in the future, the Indonesian Accounting Association (IAI) apparently remained reluctant to join in the spirit.

A striking example occurred with a recent case in which IAI merely handed down a lenient sentence to fraudulent public accounting firms.

During the case last year it was revealed that 10 public accounting firms had allegedly committed accounting scams after they audited some banks in 1997.

Nine of them were recently declared guilty by IAI, but IAI only handed down lenient sentence to the nine firms. Three were barred from auditing banking clients, while the rests were only reprimanded for the accounting frauds.

IAI's chairman Zaenal Soedjais defended its position on Friday.

"It is quite difficult to punish the delinquent accountants as they always use diplomatic phrases in their financial reports," he said, adding that evidence was hard to find.

IAI is the only organization for accountants, and it has authority to issue or to revoke the license of the accountants.