In any company, accounting services are of critical importance and any company that fails to acquire the essential accounting services will be expected to experience many problems.

Even though Indonesia does not have a law that specifically regulate matters concerning financial reports, a bookkeeping system is still in compliance with Indonesia accounting services standards found in various laws and regulations. After incorporating a company in Indonesia, you should take note of your accounting and auditing functions.

Accounting and Auditing Services

Timely and accurate financial information is crucial for a company to maintain a competitive advantage in today’s dynamic business environment.

Accounting refers to the bookkeeping system that follows Indonesia’s accounting standards included in the Limited Liability Company Law and the Tax laws.

Auditing, on the other hand, refers to the systematic and independent examination of books, accounts, documents, and vouchers of a company to have a rough gauge of how far the financial statements presented are to a true and fait view of concerns.

Audit professionals provide a range of independent audit services based on a strong knowledge of accounting principles. These are complemented by an appropriate knowledge of business systems, processes, and controls.

By having an audited business, you will gain credibility from shareholders and investors.

NOTE: As long as your company’s annual income is more than IDR 50billion or your company consist of assets worth more than IDR 25billion, the company’s financial statements have to be audited.
Business Opportunities in Singapore

Advantages of Auditing

The benefits of auditing include:

  • Satisfying stakeholders such as employees, customers, suppliers, and pressure group, as well as the investing community, as to the credibility of published information

  • Facilitates the payment of corporate tax, good and services tax, and other taxes on time and accurately, thereby avoiding interest, penalties, and investigations

  • Enables the company to comply with banking covenants

  • Helps to deter and detect material fraud and error

  • Facilitates the purchase and sale of businesses

  • Takes advantage of the spin-off benefits such as advice on the structure and operations of systems

  • Demonstrates good corporate governance and citizenship

Corporate Secretarial checker

Taxation in Indonesia

All types of business entities in Indonesia are required to pay taxes and disclose their financial status on a regular basis. Monthly and annual withholding taxes, monthly and annual income taxes, Value Added Tax (VAT), Luxury Goods Sales Tax (LGST) – if applicable – as well as the firm investment plan are among them. These taxes must be paid at the local tax office where the business is located.

In Indonesia, failing to pay business taxes and individual taxes on time might result in a financial penalty. For late payments, the taxpayer should pay a monthly interest rate of 2%. The maximum amount of interest that taxpayers should pay is 48 percent. Given the amount of money you will have to spend on the fine, it is best to stick to the deadline as closely as possible.

Thinking of setting up your company in Indonesia? Reach out to us for free consultation on company incorporation and other corporate services like auditing today!

whatsapp us
contact us

FAQs

Does Indonesia follow IFRS?2021-11-08T14:43:47+08:00

Indonesia’s approach to IFRS adoption is to maintain its national GAAP (Indonesian Financial Accounting Standards, IFAS) and converge it gradually with IFRSs as much as possible. Currently there is no plan (and consequently no timetable) for a full adoption of IFRSs. 

Which financial Accounting Standard is Indonesia adopting currently?2021-11-08T14:27:23+08:00

International Financial Reporting Standard (IFRS) is adopted in Indonesia. 

Who set Accounting standards in Indonesia?2021-11-08T14:27:29+08:00

The Government Accounting Standard Committee (KSAP), established under Minister of Finance Decree No. 379 of 2004, is responsible for setting Public Sector Accounting Standards in Indonesia. 

What Accounting standards does Indonesia use?2021-11-08T14:24:37+08:00

Indonesia’s commitment is to support IFRS Standards as the globally accepted accounting standard and to continue with the IFRS Standards convergence process, further minimizing the gap between SAK and IFRS. Indonesia is yet to announce its plan for the full adoption of IFRS Standards in Indonesia. 

Share This Story, Choose Your Platform!

Just keep reading…

Join our PHP Community ID Forum - Expert Tips & Resources
Go to Top