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Indonesia Audit2023-08-21T18:19:25+08:00

Company Law in Indonesia requires audit of financial statements by among others, limited liability companies, companies with assets more than 50 billion rupiah, and public companies. Our skilled auditors at Paul Hype Page offer dependable and expert audit services that foster shareholder trust and offer investors the certainty required for well-informed choices. Following rigorous international auditing standards, we conduct comprehensive and autonomous audits, pinpointing possible inaccuracies to present an authentic view of your company’s financial well-being, heighten stakeholder assurance and ensure regulatory conformity.

Why Company Audits in Indonesia are Important

Company audits in Indonesia hold significant importance due to their role in ensuring the accuracy, reliability, and transparency of financial information. An audit is an independent and systematic assessment of an organisation’s statutory records, financial documents, and book of accounts. In Indonesia, audits are conducted in accordance with the Indonesian Financial Accounting Standards (SAK) established by the Financial Accounting Standards Board (DSAK IAI) and the Indonesian Sharia Accounting Standards Board (DSAS IAI) for sharia-based companies.

The primary objective of a company audit is to determine the extent to which the financial statements, along with their non-financial disclosures, present a true and fair representation of the company’s financial status. By conducting thorough examinations and assessments, auditors provide credibility to the financial statements, ensuring that they are reliable and accurate.

Furthermore, company audits contribute to the improvement of a company’s internal controls and systems. Through the auditing process, weaknesses and deficiencies in internal controls can be identified, allowing the company to implement corrective measures and strengthen its governance framework. This helps mitigate risks, prevent fraudulent activities, and enhance the overall efficiency and effectiveness of the company’s operations. Other than analysing the credibility of the financial statements, audits also analyse the material misstatement risks that are present within them.

Indonesia Auditing Services We Provide

Our various audit services in Indonesia will be able to cater to the specific needs of your company. Among others, these are the services that we provide:

Audited Companies vs Unaudited Companies

Audited Companies Unaudited Companies

Ability to Create Reliable Financial Reports

Company audits play a crucial role in generating reliable financial reports for both internal and external stakeholders. By conducting comprehensive assessments of financial records, transactions, and statements, audits verify the accuracy and integrity of financial information. This enhances the credibility and trustworthiness of the company’s financial reports, enabling stakeholders to make informed decisions based on reliable data.

Inability to Create Reliable Financial Reports

Unaudited companies face challenges in producing reliable financial reports for both internal and external purposes. Without the independent scrutiny and validation provided by audits, there is a higher risk of errors, misstatements, or inconsistencies in financial records. This lack of reliability undermines the credibility of financial information, making it difficult for stakeholders to make informed decisions based on accurate data.

Resource Allocation and Productivity Assessment

Through audits, companies can gain insights into the proper allocation of resources and assess the productivity levels of different products or business segments. Audits help identify areas of inefficiency, wastage, or underutilisation of resources, allowing companies to make informed decisions on resource allocation, cost reduction, and process improvements. This promotes effective resource management and enhances overall operational efficiency.

Difficulty in Resource Allocation and Productivity Assessment

Without audits, unaudited companies struggle to determine the proper allocation of resources and assess the productivity levels of their products or business segments. The absence of systematic evaluations and analysis can lead to inefficiencies, suboptimal resource utilisation, and an inability to identify underperforming areas. This hampers effective decision-making and Audited Companies Unaudited Companies resource management and enhances overall operational efficiency.

Effective Financial Management

Companies rely on audits to gain a comprehensive understanding of their financial affairs. Audits provide a detailed analysis of assets, liabilities, revenue streams, and expenses, enabling companies to evaluate their financial health and performance. This information is essential for effective financial management, strategic planning, and decision-making. Without audits, companies would lack the necessary insights to monitor their financial status, identify potential risks, and take appropriate measures for financial stability and growth.

Limited Financial Affairs Management

Unaudited companies face challenges in effectively managing their financial affairs. The lack of in-depth analysis and evaluation of assets, liabilities, revenue streams, and expenses makes it difficult to gain a comprehensive understanding of their financial position and performance. This limits their ability to identify financial strengths, weaknesses, and potential risks, hampering their ability to make informed financial decisions and strategic plans.

Marketplace Reliability

Company audits contribute to establishing credibility and reliability in the marketplace. By consistently producing reliable financial reports and adhering to auditing standards, companies enhance their reputation for transparency and financial accountability. This, in turn, builds trust among customers, suppliers, investors, and other stakeholders. Reliable financial reporting demonstrates a company’s commitment to quality and professionalism, increasing its competitive advantage and market standing.

Unreliability in the Marketplace

The absence of audits can lead to an unreliable reputation in the marketplace for unaudited companies. Without independent verification of financial statements and adherence to auditing standards, stakeholders may question the accuracy and transparency of financial information. This can erode trust and confidence among customers, suppliers, investors, and other stakeholders, potentially impacting business relationships, partnerships, and market competitiveness.

Audit Exemption in Indonesia: Are There Any?

While there are no specific auditing and compliance regulation in Indonesia which explains about audit exemptions, it is mandatory for every limited liability company in Indonesia to have their financial statements audited if they fulfil one of the following criteria.

Companies that are mandatory to be audited:

How to Respond to an Audit in Indonesia?

After engaging audit services in Indonesia, an audit report will be given. Here are some of the ways you can respond to it:

Your Questions, Answered

Auditing a company can be daunting – here are the top questions regarding Auditing Services in Indonesia compiled to clear your doubts!

Can small and medium-sized enterprises (SMEs) benefit from audits in Indonesia?2023-08-16T09:50:02+08:00

Yes, audits can be beneficial for SMEs in Indonesia as they provide an independent assessment of financial statements, enhance transparency, and improve the company’s credibility among stakeholders, including lenders, investors, and business partners.

Can companies switch auditors in Indonesia?2023-08-16T09:47:57+08:00

Yes, companies have the right to change auditors in Indonesia. However, it is important to follow the procedures and requirements set by the Financial Services Authority (OJK) and the Indonesian Institute of Certified Public Accountants (IAPI) when transitioning to a new auditor.

What happens after an audit is completed? 2023-08-16T09:47:39+08:00

After the completion of an audit, the auditor prepares an audit report, which includes their findings, opinions, and recommendations. The company’s management reviews the report, addresses any identified issues, and takes necessary corrective actions to improve financial reporting and internal controls.

How can companies prepare for an audit in Indonesia?2023-08-16T09:47:22+08:00

Companies can prepare for an audit by organising their financial records, ensuring compliance with accounting standards and regulations, conducting internal reviews, and addressing any identified issues or weaknesses in internal controls. Seeking guidance from professional auditors can also help in the preparation process.

Can companies choose to have voluntary audits in Indonesia?2023-08-16T09:47:03+08:00

Yes, companies have the option to undergo voluntary audits even if they are not legally required to do so. Voluntary audits can provide additional credibility and assurance to stakeholders and demonstrate a commitment to transparent financial reporting.

What are the consequences of non-compliance with audit requirements in Indonesia?2023-08-16T09:46:46+08:00

Non-compliance with audit requirements can lead to penalties, fines, reputation damage, and regulatory actions by authorities such as the Financial Services Authority (OJK). It is essential for companies to adhere to audit regulations to maintain compliance and avoid potential negative consequences.

Who is responsible for conducting audits in Indonesia?2023-08-16T09:46:21+08:00

Audits in Indonesia are conducted by qualified auditors who are registered with the Financial Services Authority (OJK) or the Indonesian Institute of Certified Public Accountants (IAPI).

What are auditing services?2022-07-15T12:10:32+08:00

Auditing services are professional services that provide compliant financial statements and ensure that the finances are in order before communicating to key stakeholders.

When do I need to submit the audited financial statements in Indonesia?2022-07-15T12:10:17+08:00

The audited financial statements must be submitted within 6 months from the end of the financial year.

How long does an audit usually take in Indonesia?2022-07-15T12:10:00+08:00

Depending on volume and complexity of transactions, an audit can take a few weeks or up to months.

How often do companies need to be audited?2022-07-15T12:09:42+08:00

Every company must have its financial statements and accounting records audited at least once a year. Only companies which fulfil the criteria for audit exemptions do not have to be audited.

What are 3 types of audits?2021-11-09T12:24:44+08:00

There are three main types of audits: external audits, internal audits, and Internal Revenue Service (IRS) audits. External audits are commonly performed by Certified Public Accounting (CPA) firms and result in an auditor’s opinion which is included in the audit report. 

Which is the first largest accounting body in the world?2021-11-09T12:24:30+08:00

The Chartered Institute of Management Accountants (CIMA) is the world’s largest and leading professional body of management accountants.

Does Indonesia adopt IFRS?2023-08-16T09:38:22+08:00

Yes. From 2015 onwards, the Indonesia Financial Accounting Standard (SAK) converged with the International Financial Reporting Standard (IFRS) entirely.

Who is obligated to be audited?2021-11-09T12:22:52+08:00

The Company Law mandates that financial statements of a limited liability company must be audited by a public accountant registered in Indonesia if they meet at least one of the following criteria: 

  • Companies with assets exceeding 50 billion rupiah (US$3.6 million);
  • Public companies;
  • Companies that issue debt instruments;
  • The company is a state-owned enterprise; or
  • The company collects or manages public funds (such as banks and insurance companies).

Audit In Indonesia Articles

Supplement your existing knowledge with additional insightful readings that we’ve crafted based on our years of experience.

Why You Should Conduct a Company Audit with Us

Here are the benefits of auditing your business with us:

We assess your internal controls – proper procedures, verification and segregation of duties

We will review your company’s security and recommend mitigation measures for issues

We efficiently identify gaps in your business operations

We verify the accuracy and integrity of your financial statements

We check the laws, regulations, and industry standards and your company’s compliance

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