Indonesia does not have a specific date to celebrate national holiday for accountants, thus it is best to join global celebration of International Accounting Day on November 10 – as acknowledgment to the work of professionals all around the country.
Local firms will frequently throw informal parties in a bid to recognize their employees’ efforts. It is a jovial occasion that is short, but sweet for all hardworking accountants. November 10th is a fond reminder of all that is right with the profession and its representatives in Indonesia.
Facts about Accounting in Indonesia
As of December 2009, there were 47,500 accountants in Indonesia registered by Ministry of Finance.
Accountancy associations and groups
- Ikatan Akuntan Indonesia [Indonesian Institute of Accountants]
- Indonesian Accounting Society Total Country
Ikatan Akuntan Indonesia (IAI) offers three membership categories (regular, extraordinary, and honorary members) . Only regular members are required to fulfill all membership obligations. Regular members are required to hold a Bachelor‘s degree in accounting and successfully complete the IAI approved professional accounting program (PPAk) from an accredited university , and then register with the Ministry of Finance. Individuals who hold a Bachelor‘s degree in accounting, even without registration at the Ministry of Finance, may be entered as IAI extraordinary members without meeting additional requirements. The IAI may enter an individual as an honorary member when he/she is deemed to be of high caliber with respect to contributing to the development of accountancy profession in Indonesia.
Membership in the Indonesian Institute of Accountants or Ikatan Akuntan Indonesia (IAI) is not mandatory for preparers of financial statements or auditors . The IAI, which was established in 1957, has been a member of IFAC since 1986. The IAI is an umbrella organization that includes four ― compartments,‖ or associate organizations. These associate organizations congregate auditors (IAPI) 18 , management accountants (IAMI), academic accountants, and public sector accountants. As a self – funded professional body, IAI is responsible for setting accounting standards and organizing programs for continuing professional development for its members. As of December 2009, IAI had 8,185 registered members, 343 junior members, and 73 corporate members. 19 As observed from these figures, Indones ia has relatively few professional public accountants, and most of them are concentrated in the main urban centers.
The IAPI (Indonesian Institute of Public Accountants) represents the auditing profession of the country. Since its establishment in 2007, the IAPI has been responsible for setting a code of ethics as well as auditing standards. Although IAI leadership claims that IAPI is integral to its constitution, in practice these two organizations do not appear to belong to the same organizational struc ture. In fact, there are indications that IAPI has been planning to apply for IFAC membership in its own right. Immediate steps are necessary to resolve the confusion created by separation of IAPI from IAI. In this regard, an enabling legal framework is ur gently needed . As of December 2009, IAPI individual members totaled 1,1 78 , of which 87 3 are practicing public accountants and 305 are non – practicing public accountants. In addition to the individual members, there are 499 public accounting firms that have become IAPI members.
Indonesia needs to scale – up efforts for increasing the number of qualified professional accountants. As of December 2009, there were 47,500 MoF – registered accountants in Indonesia. Only a fraction of these have taken IAI membership. It seems that the vast majority of registered accountants do not find it beneficial to apply for IAI membership. Since 2009, graduates of the Accountant Professional Education program have been automatica lly registered as IAI members before they obtain the Registered Accountant title from MoF . In the future, this may increase the number of registered accountants with IAI membership. In Indonesia with a population of 240 million, IAI ‘s membership of less than 8,000 shows a skewed picture of the availability of qualified professionals. The problems within the accountancy profession are exacerbated when considering that about 40 percent of public accountants in Indonesia are above the age of 60 and about 8 percent are under the age of 40.
A registered public accountant can apply for a practice license from the Ministry of Finance once minimum requirements for offering professional services are fulfilled. To meet the minimum requirement s, a public accountant must supply evidence that he/she has an office located in Indonesia; employs three auditors with at least , a Diploma in Accounting and at least one must also be a registered accountant; and has a quality – control system in place. 21 If the firm is a partnership, the partners must provide the partnership charter and a letter of agreement on the appointment of a chairman signed by all partners. As of December 2009, there were 410 registered accounting firms in Indonesia. This also call s for better aligning clarity and consistency of Ministry of Finance‘s procedure of registration and licensing with IAPI membership requirements.