The Changing Landscape of

Accounting Profession in
Indonesia

Rosita Uli Sinaga, CA

National Council Member of IAI

IKATAN AKUNTAN INDONESIA

Change on Business
Environment
 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

We are living in a fast changing
world
The Impact of AI in the accounting
profession
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
 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.
 How technology disruptions
will change accounting profession
Opportunities:
• Very fast growth of FinTech start-up companies creates more advisory
opportunities.
• The use of technology can reduce significantly audit hours and
accounting/finance processes.
• The role of accountant will move to more analytical and strategic
type of job.
Change on Indonesian
Financial Accounting
Standards
CONVERGENCE STATUS AS AT 1
JANUARY 2015
1 year gap
STANDAR AKUNTANSI INTERNATIONAL FINANCIAL
KEUANGAN REPORTING STANDARDS
AS AT EFFECTIVE 1 JANUARY 2015 AS AT EFFECTIVE 1 JANUARY 2014
Substantially in line, with a number of
exceptions

• During 2013-2014 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 10

 PILLARS OF SAK

SAK UMUM IFRS based

UMUM
SAK UMUM

EMKM
SAK EMKM
ETAP
SAK ETAP
entities with
SAK ETAP no public
accountability
SAK

SAK
SAK

micro, small &

SAK EMKM* medium
entities

PSAK SYARIAH PSAK Sharia based

SYARIAH transactions

* New pillar introduced by DSAK IAI on 24 October 2016, effective 1 January 2018.

IKATAN AKUNTAN INDONESIA

IFRS COMPLETED STANDARDS ~
2016
IFRS
SAK
IFRS STANDARDS Target
Effective
Effective Date
Date
IFRS 15: Revenue from
1 1 Jan 2018 1 Jan 2019
Contracts with Customers
2 IFRS 9: Financial Instruments 1 Jan 2018 1 Jan 2019
3 IFRS 16: Leases 1 Jan 2019 1 Jan 2020
4 IFRS 17: Insurance Contracts* 1 Jan 2021 1 Jan 2022
*IFRS 17 is Phase II of IFRS 4 Insurance Contracts planned to be issued by IASB on 1st quarter of 2017

 4 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
 The period 2019 to 2022 significant changes will mark Indonesia
accounting practices after Phase 2 of the IFRS’s convergence into
SAK

IAI International Seminar

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DSAK IAI COMPLETED STANDARDS
~ 2016
• Amandemen PSAK 2 & PSAK 46 (Amendments to IAS
7 & IAS 12)
• Penyesuaian Tahunan 2016 (Annual Improvements
IFRS to IFRSs 2012 – 2014 Cycle)
Standards & • Kerangka Konseptual Pelaporan Keuangan
Conceptual (Conceptual Framework for Financial Reporting)
Framework • 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)

• SAK Entitas Mikro,Kecil & Menengah (Standard for

Micro,Small & Medium Entities)
Own • PSAK 70 Akuntansi Aset & Liabilitas Pengampunan
Standards Pajak (Tax Amnesty)
• ED ISAK 32 Definisi & Hierarki SAK

IAI International Seminar

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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

Initial review on Full Adoption of IFRS in Indonesia

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 CHALLENGES TO FULLY ADOPT IFRS IN
INDONESIA
LEGAL
STRUCTURE
STAKEHOLDER ENGAGEMENT CONSISTENCY OF INTERPRETATION /
IMPLEMENTATION ISSUES

CHALLENGES SHARIA-BASED TRANSACTIONS

SUPPORTING PROFESSIONS

TRANSLATION OF IFRS INTO LOCAL

PUBLIC EDUCATION
LANGUAGE

IKATAN AKUNTAN INDONESIA 15

Change in Accountancy
Regulations
 HISTORY OF
INDONESIAN ACCOUNTANCY QUALIFICATION
1954-2002 2002-2014 2014-NOW
New PTN/PTS PTN/PTS
10 PTN PTS
PTN

IAI MEMBER
Accountancy
National Exam
FOUNDATION
Level PPAK CA EXAM

Accountancy National PRACTICAL

Exam PROFESIONAL EXPERIANCE
Level

ACCOUNTANT
*PTN: State University,
PPAK dilaksanakan PTS: Private
di PT yang mendapat University
rekomendasi dari IAI
PPAK: Professional Accountancy Education Program

IKATAN AKUNTAN INDONESIA 17

 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
53.300 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 18

 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 19

 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 20

Other Challenges
 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 22

Number of Public
Accountants
1.189 AP
2016407 KAP
135 Branches

1.124 AP
2015403 KAP
125 Branches

1.053 AP
2014 388 KAP
999 AP 122 Branches
2013 377 KAP
119 *per 18 November 2016;
Branches
IKATAN AKUNTAN INDONESIA
Source: PPPK Kemenkeu
23
RI
 Public Accounting Firm (KAP) and
Public Accountant (AP)
Total: 1.189 AP & 407 KAP
Sumbagut
37 AP & 18 KAP
Kalimantan
9 AP & 7 KAP

Sumbagteng Sulawesi
28 AP & 10 KAP 16 AP & 10 KAP
Banten
106 AP & 17 KAP
Sumbagsel Jakarta
24 AP & 11 KAP 552 AP & 226 KAP

Jabar
213 AP & 45 KAP

Jateng & DIY Jatim Bali & NTB

52 AP & 13 KAP 134 AP & 41 KAP 18 AP & 9 KAP
24

*per 18 November 2016; Source: PPPK

Kemenkeu RIINDONESIA
IKATAN AKUNTAN
Challenges (or Opportunities?)
Accounting Services in INDONESIA
• 44,398 companies • 3,261 higher education
(452 public institution
companies) • 364 NGO
• 141 SOEs • 100,000 Not-for-profit
• 1,007 ROEs entities
• 186,907 cooperatives • 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 25

About IAI
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
Institute of Indonesia
professional Chartered Accountants is a professional organization that
education.
houses the representatives
• IAI has entire accountantsin
Indonesia
33 provincial regions.

IKATAN AKUNTAN INDONESIA 27

IAI ROLE AND ACTIVITIES
Enforcement Ethics
and Discipline and
Contributions Member
to Advocacy
the Community

Implementation
Publication
of Certification

International ACTIVITIES
Relations of IAI

Contributions
for Public Policy

Competence Registration and

Enhancement Development of Membership
Accountant Financial Accounting Services
Standard, Professional
Standards & Ethics

IKATAN AKUNTAN INDONESIA 28

Thank You
Institute of Chartered Accountant
Grha Akuntan
Jl Sindanglaya 1 Menteng Jakarta 10310
www.iaiglobal.or.id
iai-info@iaiglobal.or.id
Tel (021) 3190 4232