House to further regulate accounting services
Legislative Update 01/2010
Earlier this year, the House of Representative presented the academic draft on the Law on Public Accountants (download the academic draft here, in Bahasa). The current version of the draft law in its preamble does not seem to provide enough justification on why accounting services has to be regulated. It only states that at present, there is not enough regulation on the profession and that more rules are required to provide ‘legal certainty’ for clients and public accountants.
The academic draft does contain some justifications on why the accounting industry needs to be regulated, among other, that the profession attempts to reduce information asymmetry between principal and agents of an undertaking and provide them with financial information to back up their business decision. However, this is not adequately enshrined in the draft Law.
ILR’s sources at the House of Representative commented that the real aim of the draft law is to curtail the ever expanding growth of foreign accounting firms and provide opportunity for local firms to grow. Provisions regulating foreign accounting firms (Articles 17 and 13 of the current Draft) will become a contentious subject to be debated. On these articles, the number of foreign partners and foreign workers in an accounting firm is limited.
ILR will closely monitor the Draft Law on Public Accountant. If you require more information or tailor made service, please contact firstname.lastname@example.org