According to Business Times (9/8/06)

“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, the Jakarta Post said yesterday.”

BPK director Anwar Nasution refused to name the firms involved and quoted:

• 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. It is suspected that part of the fees actually constitute bribes;
• 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;

Indonesian Accountants Association (IAI) spokesman Mr Franky Setiawan confirmed the following:

• his association had not been notified by the BPK who these individuals or companies that had been reported to the finance ministry were;
• IAI was solely responsible for membership issues. 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 licences, than IAI will automatically revoke their membership;
• 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 programme will be launched around September or October
• IAI has more than 400 members. These assessments could take three or four years to finish and IAI will prioritise the important ones and the ones that have the potential to prejudice the public.’

Knowing the bureaucracy in Indonesia, IAI should be more professional to act faster to ensure its reputation is not marred by those bad apples in the audit profession.