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The Supreme Audit Agency (BPK) has urged the Finance Ministry
to revoke the business licenses of a number of accounting and appraisal
firms due to malpractice and misrepresentation.
"We have reported these accounting and appraisal firms to the finance
minister, and have suggested that their business licenses be revoked,
as well as the individual professional licenses of their partners,"
said BPK director Anwar Nasution in Jakarta on Monday.
However, Anwar refused to name and shame the firms involved, saying
only that they had all been reported to the ministry earlier this month.
Anwar said that many accounting firms involved in auditing the books of
state-owned enterprises, for example, had been guilty of unprofessional
conduct, including giving inflated and misleading figures in their
reports.
"Their fees are reported to be unreasonably high. We suspect that part
of the fees actually constitute bribes," he was quoted as saying by
Antara.
"The accounts have to depict the real condition of the company being
audited," he said. "If the accounts are not reliable, then they are of
no use," he said.
"One of the causes of the 1997 crisis was the unreliability of the
reports issued by accounting firms and government auditors. Back then,
the substance of these reports was determined by how large the bribe
was," he said.
"We have to reform the culture in the accounting industry," he added.
Anwar said that accounting scams also took place in the developed
world, such as those involving major companies like the United
States-based Enron and the Italy's Farmalat.
Meanwhile, Indonesian Accountants Association (IAI) spokesman Franky
Setiawan said that his association had not been notified by the BPK of
the names of the individuals or companies that had been reported to the
finance ministry.
Franky said that the IAI was solely responsible for membership issues.
He said that under the current regulations, an accountant had to be
registered as a member of the IAI before he could practice.
"If the finance minister decides to revoke their licenses, than we will
automatically revoke their membership," he said.
In order to improve professionalism, the IAI would have all of its
members assessed by an independent agency called the Quality Review
Board.
"The function of the board is basically to assess quality control
within accounting firms. The program will be launched around September
or October," Franky explained.
Franky said that during the initial stage, the board would prioritize
the assessment of high-profile accounting firms that audited the
accounts of banks, publicly listed companies and other businesses
involving the public.
"We have more than 400 members. These assessments could take three or
four years to finish, but, of course, we will prioritize the important
ones and the ones that have to potential to prejudice the public," he
said.
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