Elimination Of Rotation To Spur Public Accountant Firm Growth

JAKARTA May 19 2015— New regulation on public accounting i.e. Government Regulation No.20/2015 is believed to spur the growth of public accounting firm since time limit for auditing a certain company is eliminated.

Advisory Board of Indonesian Institute of Accountant Mustofa said the new regulation has eliminated rotation issue so far hampering accounting firm.

He argued that the new regulation signed by President Joko Widodo on 6 April is an ‘advantage’ for accounting firm since it no longer prepares for establishment of new firm i.e. change of name change of partners providing leave for old-time partners and recruiting new partner.

“There will be no waste to prepare everything for new office ranging from new tax number name board name card booklet leaflet and invoice” he told Indonesia Business Daily Sunday (5/10).

He estimates the new regulation will re-activate partners predicted to reach more than 100 firms. They will work again to sign audit report and the practice will resume its normal activity similar to that before rotation.

Public accountant is a professional accountant who keeps official permit to provide financial accounting service while public accounting firm is a business entity established by an individual or some people.

Mustofa explained the new regulation was an implementation of Regulation No. 5/2011 on public accounting. In the previous regulation - PMK No.17/PMK.01/2008 on public accounting service – auditee or client is required to move from one firm to other firms after five years period.

Irwan Bunyamin Afiff Senior Managing Partner of RSM AAJ said the regulation emphasizes the independency of public accounting firm. However if the government intends to uphold independency regulator also needs to improve audit equipment. Read more..