The Changing Landscape of Accounting Profession in Indonesia

Transcription

1 The Changing Landscape of Accounting Profession in Indonesia Rosita Uli Sinaga, CA National Council Member of IAI IKATAN AKUNTAN INDONESIA

2 Change on Business Environment

3 Major Change in Business Environment Globalization and Global Competition With lack of jurisdiction, new challenge for profession and regulators, and law enforcement. ASEAN Economic Communities (AEC) AEC opens good and service flow among ASEAN countries. Technology Disruptions Using technology in business including FinTech (Financial Technology), has significantly disrupted conventional business / financial services. IKATAN AKUNTAN INDONESIA 3

4 We are living in a fast changing world

5 Below are the example of the most common FinTech in Indonesia: Category #startups Overview Examples Digital Payment 15+ Mobile wallet POS payments Online B2C and P2P transfers Aggregator 8+ Collect and compare financial products (cards, loans, etc) P2P Lending 6+ Connect individual borrowers and lenders Due diligence on potential borrowers

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7 The Impact of AI in the accounting profession

8 Deloitte wins Audit Innovation of the Year 2015 International Accounting Bulletin Awards has awarded Deloitte Audit Innvoation of the Year Deloitte used a leading-edge audit analytics tool called ARGUS Argus innovates the audit electronic documents by making use of cognitive technologies-computer systems capable of performing tasks normally requiring human intelligence. By employing state of the art tools like Argus in our audit work, our professional are able to spend more time interpreting results, exercising professional skepticsm and focusing on risks (John Raphael, Chief Innovation Officer, Deloitte & Touch LLP

9 How technology disruptions will change accounting profession Risk: Large accounting firms as the biggest accounting graduate employers has predicted that Graduate recruitment at auditors and accountants could fall significantly due to the impact of increasing automation and artificial intelligence. The economies in 2014 predicted accountants and auditors most likely to be replaced by robots in the next 20 years. Below are some examples of what potentially might change: 1. Automate admin type accounting & finance tasks 2. Real time smart audit 3. Reduce the need for many lower quantum high volume manual audit processes (e.g. use of data analytics). 4. Blockhain promises a world where all transaction can be locked, viewed and monitored in a real time.

10 How technology disruptions will change accounting profession Opportunities: Drive significantly growth of SMEs More SMEs creates more business/accounting advisory opportunities. The use of technology can reduce significantly manual process and redeploying talent to do higher value activities The role of accountant will move to more analytical and strategic type of job.

11 Change on Indonesian Financial Accounting Standards

12 CONVERGENCE STATUS AS AT 1 JANUARY 2015 STANDAR AKUNTANSI KEUANGAN AS AT EFFECTIVE 1 JANUARY year gap Substantially in line, with a number of exceptions INTERNATIONAL FINANCIAL REPORTING STANDARDS AS AT EFFECTIVE 1 JANUARY 2014 During DSAK IAI has issued (including new and revision): 13 PSAK and 4 ISAK along with annual improvements of SAK. During 2015 DSAK IAI has issued (including new and revision): 11 PSAK and 2 ISAK along with annual improvements of SAK. IKATAN AKUNTAN INDONESIA 12

13 SAK UMUM SAK ETAP SAK EMKM PILLARS OF SAK SAK UMUM IFRS based PSAK SYARIAH SAK ETAP SAK EMKM* PSAK SYARIAH entities with no public accountability micro, small & medium entities Sharia based transactions * New pillar introduced by DSAK IAI on 24 October 2016, effective 1 January IKATAN AKUNTAN INDONESIA

14 IFRS COMPLETED STANDARDS ~ IFRS STANDARDS IFRS 15: Revenue from Contracts with Customers IFRS Effective Date SAK Target Effective Date 1 Jan Jan IFRS 9: Financial Instruments 1 Jan Jan IFRS 16: Leases 1 Jan Jan IFRS 17: Insurance Contracts* 1 Jan Jan 2022 *IFRS 17 is Phase II of IFRS 4 Insurance Contracts planned to be issued by IASB on 1 st quarter of new big IFRS Standars will become effective in the period of 2018 to 2021 and will be adopted in Indonesia in the period of 2019 to 2022 ~ a 1- year gap significant changes will impact Indonesia accounting practices in period 2019 to 2022 ~ another tsunami after Phase 2 of the IFRS s convergence into SAK IAI International Seminar Ritz Carlton Jakarta, 25 May

15 DSAK IAI COMPLETED STANDARDS ~ 2016 IFRS Standards & Conceptual Framework Amandemen PSAK 2 & PSAK 46 (Amendments to IAS 7 & IAS 12) Penyesuaian Tahunan 2016 (Annual Improvements to IFRSs Cycle) Kerangka Konseptual Pelaporan Keuangan (Conceptual Framework for Financial Reporting) ED PSAK 71 Instrumen Keuangan (IFRS 9) ED PSAK 72 Pendapatan dari Kontrak dengan Pelanggan (IFRS 15) ED Amandemen PSAK 62 (Amendments to IFRS 4) Own Standards SAK Entitas Mikro,Kecil & Menengah (Standard for Micro,Small & Medium Entities) PSAK 70 Akuntansi Aset & Liabilitas Pengampunan Pajak (Tax Amnesty) ED ISAK 32 Definisi & Hierarki SAK IAI International Seminar Ritz Carlton Jakarta, 25 May

16 DSAK IAI WORK PLAN ~ 2017 Completed due process procedures for adoption of IFRS 9 & IFRS 15 into PSAK 71 & PSAK 72 Completed due process procedures for ISAK 32 Start due process procedures for adoption of IFRS 16 & IFRS 17 into ED PSAK 73 & ED PSAK 74) Post Implementation Review of SAK ETAP Further research on Standard for Not for Profit Entities Further research on Full Adoption of IFRS in Indonesia IAI International Seminar Ritz Carlton Jakarta, 25 May

17 CHALLENGES TO FULLY ADOPT IFRS IN INDONESIA STAKEHOLDER ENGAGEMENT LEGAL STRUCTURE CONSISTENCY OF INTERPRETATION / IMPLEMENTATION ISSUES SUPPORTING PROFESSIONS CHALLENGES SHARIA-BASED TRANSACTIONS PUBLIC EDUCATION TRANSLATION OF IFRS INTO LOCAL LANGUAGE IKATAN AKUNTAN INDONESIA 17

18 Change in Accountancy Regulations

19 HISTORY OF INDONESIAN ACCOUNTANCY QUALIFICATION NOW 10 PTN PTS New PTN PTN/PTS PTN/PTS Accountancy National Exam FOUNDATION Level PPAK IAI MEMBER CA EXAM Accountancy National Exam PROFESIONAL Level PRACTICAL EXPERIANCE ACCOUNTANT * PTN: PPAK dilaksanakan State University, di PT yang mendapat PTS: Private rekomendasi University dari IAI PPAK: Professional Accountancy Education Program IKATAN AKUNTAN INDONESIA 19

20 Statutory & Regulatory Framework - Indonesia Before 2012 Regulated by UU no 34/1954 After graduated from Accounting Profession Program (PPAk), automatically obtain Ak degree (registered at Ministry of Finance, without obligation to pass professional examination) Total number of Ak. holders, registered at Ministry of Finance is individuals. Ak. holders are registered only, without any obligations to maintain (no mandatory requirement to attend CPD) It is higly suspected that a lot number of Ak. holders are no longer active as accountant. IKATAN AKUNTAN INDONESIA 20

21 Statutory & Regulatory Framework - Indonesia After 2012 UU no 5 tahun 2011 tentang Akuntan Publik (Public Accountant Act), states that assurance and audit service are to be performed by individuals with CPA qualification. PMK 25/PMK.01/2014 tentang Akuntan Beregister Negara (Financial Minister Regulation on State Registered Accountant) is mandated by Law 34/1954 which has been delayed for 60 years. Mandatory to restructuring the IAI profession legalized through PMK 25/2014 and KMK 263/KMK.01/2014 to make re-arrangement in structuring the accounting profession based on global best practice, which has been proved in creating a Professional Accountant. There is mandatory requirement to attend CPD. IKATAN AKUNTAN INDONESIA 21

22 Monitoring & Enforcement Main regulators Pusat Pembinaan Profesi Keuangan (P2PK) Komite Profesi Akuntan Publik (KPAP) Otoritas Jasa Keuangan (OJK) UU no 25 tahun 2007 tentang Penanaman Modal (Act 25/2007 on Investment) UU no 40 tahun 2007 tentang Perseroan Terbatas (Act 40/2007 on Corporation) Regulate the submission of financial statement to BKPM (Investment Board) and related ministry, but the big question: Has it been fully implemented? Question remains for private entity that has not been specifically regulated. IKATAN AKUNTAN INDONESIA 22

23 Other Challenges

24 Other Challenges for Accounting Profession in Indonesia Education Quality Gap in Indonesia Java vs Outside Java Accounting lecturer with Professional experience Readiness to produce graduates who meet the market demands due to fast business environment changes. The absence for Financial Reporting Acts (UU Pelaporan Keuangan) Regulator states that regulations for public accountant have been completed through UU 5/2011 dan PMK tentang Akuntan Publik; yet wider regulation related to accountant and financial reporting not yet exist. Law Enforcement and Regulatory Enforcement for public accountant and financial statements preparers. Roles of audit committee strengthen. Integrated and consistent regulation on public accountant (P2PK vs. OJK). Contribution of Government/OJK to the development of accounting standards in Indonesia IKATAN AKUNTAN INDONESIA 24

25 Number of Public Accountants AP 407 KAP 135 Branches AP 377 KAP 119 Branches IKATAN AKUNTAN INDONESIA AP 403 KAP 125 Branches AP 388 KAP 122 Branches *per 18 November 2016; Source: PPPK Kemenkeu RI 25

26 Public Accounting Firm (KAP) and Public Accountant (AP) Total: AP & 407 KAP Sumbagut 37 AP & 18 KAP Kalimantan 9 AP & 7 KAP Sumbagteng 28 AP & 10 KAP Sumbagsel 24 AP & 11 KAP Jabar 213 AP & 45 KAP Banten 106 AP & 17 KAP Jakarta 552 AP & 226 KAP Sulawesi 16 AP & 10 KAP Jateng & DIY 52 AP & 13 KAP Jatim 134 AP & 41 KAP Bali & NTB 18 AP & 9 KAP 26 *per 18 November 2016; Source: PPPK Kemenkeu IKATAN AKUNTAN RI INDONESIA

27 Challenges (or Opportunities?) Accounting Services in INDONESIA 44,398 companies (452 public companies) 141 SOEs 1,007 ROEs 186,907 cooperatives 3,261 higher education institution 364 NGO 100,000 Not-for-profit entities 558 Governmental units In total more than 300,000 potential clients If half of them required by various law to be audited, there are 150,000 entities need to be audited Total audit opinion produced is only about 20,000 audit opinions INSTITUTE OF INDONESIA CHARTERED ACCOUNTANTS IKATAN AKUNTAN INDONESIA 27

28 The market place would continue to revolve: accounting standards, regulation, business transactions and technology Technology would significantly change human behaviour and create new competency and skill demands. How the accountancy profession in Indonesia will response? Inward looking or forward looking? Accountancy education play important role to maintain the relevancy of the accounting profession

29 About IAI

30 IAI at Glance IAI was established in Jakarta on December 23, 1957 and is the main professional accountancy body in Indonesia. IAI is a full member and founder of the organization of the accounting profession world-international Federation of Accountants (IFAC) and the organization of regional accounting profession- ASEAN Federation of Accountants (AFA). IAI members originate from all background, either practicing as a public accountant, accountants public sector, the private sector, educators accountants, management accountants, tax accountants, forensic accountants, and others. As a self-funded professional accountancy organization, IAI responsible for enforcing the code of professional conduct, compile accounting standards, carry out the certification exams, and running a continuing professional education. IAI has representatives in 33 provincial regions. Institute of Indonesia Chartered Accountants is a professional organization that houses the entire accountants Indonesia IKATAN AKUNTAN INDONESIA 30

31 IAI ROLE AND ACTIVITIES Implementation of Certification Knowledge and Professional Development Center Enforcement Ethics and Discipline and Member Advocacy Contributions to the Community Registration and Membership Services ACTIVITIES of IAI Publication Development of Financial Accounting Standard, Professional Standards & Ethics Competence Enhancement Accountant Contributions for Public Policy International Relations IKATAN AKUNTAN INDONESIA 31

32 Thank You Institute of Chartered Accountant Grha Akuntan Jl Sindanglaya 1 Menteng Jakarta iai-info@iaiglobal.or.id Tel (021)