Telkom may finish audit report this month

Rendi A. Witular, The Jakarta Post, Jakarta

After being in limbo for more than six months, state- controlled telecommunications company PT Telekomunikasi Indonesia (Telkom) said a reaudit of its 2002 financial report may be completed at the end of this month, as previously planned.

Telkom finance director Guntur Siregar told The Jakarta Post on Thursday that substantial progress had been made by PricewaterhouseCoopers (PwC) in making adjustments to Telkom's previous financial report.

"All the obstacles have been cleared, and now is in the process of being finalized. PwC still needs an approval of the reaudit results from its U.S. office... We are hopeful that it can be concluded this month," said Guntur.

Guntur explained that Telkom had concluded discussions with PwC and Deloitte Touche Tohmatsu, the auditor of Telkom's 2000 and 2001 financial accounts, regarding the adjustments.

However, Guntur refused to elaborate on the final adjustments.

But according to a Telkom press statement on Dec. 30, one of the adjustments would be a decline in its consolidated net income for 2002, 2001 and 2000 by a maximum of 5 percent, 10 percent and 5 percent respectively.

In the statement, Telkom also said that it expected the reaudit to be concluded at the end of January.

Problems with Telkom's 2002 financial report emerged after the U.S. Securities and Exchange (SEC) rejected an earlier filing because the report was audited by an Indonesian accounting firm which was not approved by the SEC.

The SEC has demanded that Telkom, whose shares are listed both in Jakarta and New York, resubmit the 2002 accounts as soon as possible or risk being delisted from the U.S. stock market. Telkom then called in PwC in June to reaudit the report.

However, the reaudit has taken longer than expected because PwC wants to reaudit Telkom's 2001 and 2000 financial reports as well, since the auditor claimed that they are related to the 2002 report.

PwC then discussed the issues with Deloitte to determine the necessary adjustments to the reports.

The most complicated issues the two auditors were debating center on the need to make adjustments in the calculation of deferred taxes and the consolidation of revenue from Telkom's former joint-venture company PT Pramindo Ikat Nusantara.