'Strong sanctions against bad accountants a must'

'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.