Accounting Profession

          The first step in the development of the accounting profession in Indonesia was the enactment of the Accountant Designation Act in 1954, which regulates the use of accountant professional designation and the provision of public accounting services by professional accountants. The year 1957 saw the establishment of the Indonesian Institute of Accountants (IAI), the first professional accounting association in Indonesia (Tuanakotta, 2007, p.317). The institute was established to advance the accounting profession and practice in Indonesia, which, in the 1950s was still in its infancy. To achieve the aforementioned goals, the IAI has run various programmes and held important responsibilities, including registering member accountants, organising professional certification programmes, developing ethical codes for accountants, publishing academic and professional journals, and running continuing professional education programmes (IAI, 2012a).

          The membership of the IAI was initially limited to individuals, whereby every member had been assigned to a particular compartment depending on his or her professional occupation. There were four compartments, namely: the compartment of public accountants, the compartment of management accountants, the compartment of academic accountants, and the compartment of public sector accountants. Although its member basis comprises of those within the public sector, the IAI remains a private organisation and is not located under any government agency. In 2007 the IAI underwent a major organisational restructuring process that had altered its divisional structure in the organisation (Tuanakotta, 2007, p.359). An extraordinary congress attended by the IAI’s executives and members decided that the IAI was now open for both individual and institutional membership. This was then followed by liquidation of the compartment of public accountants, the division which was formerly overseeing the public accounting profession in Indonesia.

         The compartment of public accountants of the IAI changed its organisation status into a separate professional association in May 2007, under a new name the Indonesian Institute of Certified Public Accountants (IAPI) (Tuanakotta, 2007, p.359). This new professional accounting body has become the first institutional member of the IAI. Being a specialised public accountant association, the IAPI continues its role to supervise the public accounting profession in Indonesia. Among its programmes are organising the Indonesian certified public accountant (CPA) examination, setting the Indonesian auditing standards, organising continuing professional education programmes, and publishing the public accountants code of ethics.

       A second spin-off in the IAI organisational structure occurred in 2009. The compartment of management accountant was dismissed and a new separate professional body named the Indonesian Institute of Management Accountants (IAMI) was established. The membership base of the IAMI is quite large as it is not limited to those who hold the accountant professional designation. Individuals without formal accounting education background, but if they are working in management accounting related areas, can also be members of this professional organisation (IAMI, 2009). Presently the IAMI organises the certified professional management accountants (CPMA) examination, a certification program that focuses on the competency of the professionals in the management accounting field.

           The two organisational restructurings have left the IAI with only two compartments. The compartment of public sector accountants, which focuses on administering members who work in the public sector, such as auditors at the Supreme Audit Board and Tax Department officers, and the compartment of academic accountants deals with academicians, researchers, and publication of scholarly journals. Apart from these compartments, the present organisational structure of the IAI includes committee for accounting professional education and, most importantly, the Indonesian Financial Accounting Standards Board. One of the most important responsibilities of the IAI in present days is overseeing the convergence of Indonesian accounting standards with IFRS.

          Apart from professional organisations, the development of accounting profession in Indonesia has also been associated with government bodies. At least two governm ent agencies directly affect the accounting profession, namely the Ministry of Finance and the Indonesian Capital Market Supervisory Agency (Bapepam-LK). The Ministry of Finance is a government body that supervises and oversees the public accounting profession in Indonesia. Among its duties are to register accounting graduates who, based on the accountant act, are eligible to hold the accountant professional designation. The Ministry of Finance is also responsible in setting government policies related to the profession. In overseeing the accounting profession, the ministry has the authority to issue practicing licences of Indonesian certified public accountants, conduct investigation in the case of violations, impose administrative sanction, and even to revoke public accountants’ practicing licences. Meanwhile, the Bapepam-LK is the government agency that oversees the Indonesian capital market and financial sector. As part of its function in supervising the capital market industry, Bapepam-LK has the authority to license public accountants (and thus public accounting firms) who are authorised to provide assurance services for public listed companies.

post by : Rony Sutiyanto