The accounting profession is defined as “ the professional organic structures of comptrollers that set up and modulate preparation entry criterions and professional scrutinies, every bit good as ethical and proficient regulations and guidelines. These organic structures are organized on national and international degrees ”. While the IFRS are the guidelines and regulations set by the International Accounting Standards Board ( IAS ) that companies and organisations can follow when roll uping fiscal statements.
Both the accounting profession and criterions are necessary for systematically modulating and forming the readying, presentation, measuring, acknowledgment and revelation of the fiscal information and hence reasonably and systematically describe fiscal public presentation through the coverage of fiscal companies. Without criterions, users of fiscal statements would necessitate to larn the accounting regulations of each company, and comparings between companies would be hard.
The information containing in the fiscal studies has to be relevant so that it can give the user what he/she wants ; apprehensible that is pitching to the abilities and cognition of the users concerned ; dependable in order to supply to the user a high grade of assurance in the information presented to him/her ; finish so as to give the giver a entire image of the coverage concern every bit far as possible ; nonsubjective in that it should non be biased by the personal perceptual experience ; seasonably so as to be up to day of the month as possible ; comparable for any one concern or for any one period.
Accounting and fiscal describing systems developed otherwise in different states because of the proviso of finance, the bing legal system, the nexus between accounting and revenue enhancement and the cultural differences between societies. This is why the fiscal studies prepared by these states should follow the Generally Accepted Accounting Principles ( GAAP ) in conformity with criterions set by International Accounting Standard Board ( IASB ) or late formed a organic structure of International Financial Reporting Standard ( IFRS ).
This survey pertains to show the position of accounting profession and accounting criterions as adopted by the Republic of Indonesia which has a population of 219 million people from assorted different civilization and faith. The accounting standards-setting organic structure in Indonesia is the Financial Accounting Standards Board ( Dewan Standar Akuntansi Keuangan or DSAK ) under the Indonesian Institute of Accountants ( Ikatan Akuntan Indonesia or IAI ) which implement for both public and private companies the criterions.
Up to December 2008, DSAK-IAI issued about 62 statements of fiscal Accounting Standards ( Pernyataan Standar Akuntansi Keuangan or PSAKs ) , which consist of 55 PSAKs for conventional minutess and 7 PSAKs for Syari’a minutess, 8 Interpretations of Financial Accounting Standards ( Interpretasi Standar Akuntansi Keuangan or ISAK ) , and 3 Technical Bulletins. All the organisations, the fiscal establishments in the state and the authorities agents of Indonesia follow the criterion of IAI.
But it is felt that IAI does non hold complete rules and ordinances unlike IAS and IFRS in order to follow with international best patterns of accounting. Even though the state adopts the rules as set by IAS and IFRS, there are some differences in intervention of points in the fiscal coverage which will be discussed subsequently. However a great trade of attempt will be required by the state to make a demand of high quality of fiscal information coverage. The coverage system by assorted regulative governments in the state needs to be streamlined.
Adoption of to the full fledged criterions as per IAS and IFRS in scrutinizing demands to be of high precedence for the state. Therefore as per the program, Indonesia will to the full seek to follow the rules and criterions set in conformity with IAS and IFRS by the beginning of January 2012. The position of the accounting profession and criterion in Indonesia is detailed in the undermentioned treatment. The accounting profession and criterions in Indonesia has achieved a certain degree of development but still something to cover with the difference between IAS and Indonesian GAAP.
The chief differences in intervention between the US GAAP, UK GAAP and the GAAP in Indonesia occur chiefly due to the manner they treat proviso of finance in the state given the bing legal system in Indonesia. The legal system of Indonesia is rather complex which is influenced by the bequest of the Dutch jurisprudence and a national legal system based on Indonesian principles of jurisprudence and justness. Another factor lending to the differences is due to the manner the state links accounting and revenue enhancement intents.
But the major difference occurs due to cultural difference between societies amongst states which complicates the acceptance of cosmopolitan GAAP. The Dutch introduced the elements of double-entry clerking to Indonesia in the seventeenth century. The East Indies Company-the chief commercial organisation during the colonial era-had a important and on-going impact on Indonesian concern agreements. Colonial economic activities quickly increased during the 1800s and early 1900s.
This created demand for trained comptrollers and bookkeepers, which was partially met by an inflow of Dutch and British comptrollers into the settlement to assist administrate the huge estates, Millss and industrial endeavors. Opportunities for local comptrollers grew during the 1942-45 break of Dutch colonial regulation. Dutch accounting patterns remained in usage during the post-independence epoch of the fiftiess. Furthermore, third accounting developing continued to be based on the Dutch accounting system.
However, the nationalisation of Dutch-owned endeavors and the ejection of Dutch subjects in 1958 created a deficit of proficient, including accounting expertness. In response, Indonesia turned to U. S. accounting patterns. However, the debut of U. S. accounting idea and patterns blended good with Dutch accounting methods, peculiarly in authorities bureaus. An increasing figure of third establishments, including the government-based Sekolah Tinggi Akuntansi Negara ( College for State Accountancy, STAN ) , began to switch their accounting plans from the Dutch to the U. S. system from 1960.
In 1975, all establishments were required to follow the U. S. system. The accounting instruction should follow merely US constructs. The US authorities provided assistance and grants for proficient aid and for upgrading Indonesia ‘s instruction systems, for illustration, through Ford Foundation grants.
A Code of Ethics for public comptrollers was introduced in 1987, covering with attitude, independency, professional accomplishment, duty to clients, and other professional comptrollers. The norms embodied in the rules and criterions of the Code of Ethics were taken chiefly from statements of accounting norms in the US. Some were besides taken from the relevant dictums of the Australian and Dutch professional organic structures. The IAI was a member of the International Accounting Standards Committee ( IASC ) and presently it is a member of the International Federation of Accountants ( IFAC ) .
In 1997 a ministerial edict was issued to modulate the rank in the accounting profession in Indonesian. Accounting Profession The development of accounting profession goes through the regulations and ordinances of the standard organic structure of accountant, how to go a member and trades besides with the ethical behaviour of comptrollers and their professional scrutinies. These organic structures will find the type of accounting services required by society that is more and progressively complex. A Degree comptroller is a individual with a weight of professional rubrics that can be equated with other occupations.
A Broadly talking Accountant can be classified as follows: Public Accountant ( Public Accountant ) Independent public comptroller is an comptroller who provides his services on the footing of certain payments. A They are working freely and by and large integrate an comptroller ‘s office. A A public comptroller may execute the scrutiny ( audit ) , for illustration on revenue enhancement services, direction consulting, and service direction system readying. Internal Accountant ( Internal Accountant ) Internal comptrollers are comptrollers who work in a company or organization. A Internal comptroller is besides called the company accountant.
A Of these places can be occupied until the start of the regular staff with the Head of Accounting or Finance Director. A Their undertaking was to develop accounting systems, fixing fiscal studies to external parties, readying of fiscal statements for corporate leaders, fixing budgets, managing revenue enhancement affairs and internal audit. Government Accountants Government Accountants is an comptroller who worked at authorities bureaus, such as in the office of Finance and Development Supervisory Agency ( BPKP ) , the Financial Supervisory Agency ( BPK ) . Accounting Educators
Accountant accounting pedagogues are in charge of accounting instruction, research and development accounting, mangajar, accounting instruction course of study in college. What are the demands if a individual wants to obtain a grade comptroller? A Person was entitled to a grade if they have qualified accountant, among others: Education Bachelor of Economics majoring in Accountancy from the Faculty of Higher Education which has been recognized to bring forth a grade of Accountants, like UI, UGM, Hasanuddin University, USU, and so forth, or a private college affiliated to one universityA who has the right to supply a high grade of Accountants.
A It besides can follow the National Examination in Accounting ( Una ) held by a pool of Higher Education in Economic Science was established by the Education Minister RI SK 1976. The Indonesian Institute of Accountants ( IAI ) is the lone professional accounting organic structure in Indonesia acknowledged by the Ministry of Finance. The IAI is besides a laminitis of ASEAN Federation of Accountants and a full member of the International Federation of Accountants ( IFAC ) .
As a self-funded comptrollers ‘ professional organic structure, IAI is responsible for puting up a codification of moralss, accounting and auditing criterions, carry oning tests for certified public comptrollers ( CPA ) , and running plans for professional instruction. Membership in IAI is purely limited to holders of the “ accountant ” rubric. The IAI members originate from all accounting backgrounds, including hearer faculty members and public sector comptrollers. As of December 31, 2004, the IAI had 5,984 registered members, with 988 of them being public comptrollers.
As celebrated from these figures, Indonesia has comparatively few professional public comptrollers and most of them are mostly concentrated in the chief urban centres. Professional Education and Training Merely those who graduate in accounting ( with a lower limit of 144 recognition units ) and set about the Professional Education Program ( consisting 20-40 recognition units ) may gain an “ accountant appellation ” and obtain a State Registered Accountant ( SRA ) Certificate. 28 Merely SRA holders are eligible for the CPA test, which is administered by the IAI twice a twelvemonth.
The CPA test is compulsory to acquire an hearer licence from the Ministry of Finance and go an auditor member in the Institute. The CPA Board of Examiners was established by the IAI, the IAI National Council appoints the Board ‘s members. The CPA Board of Examiners has the authorization to ( a ) set the topic and course of study ; ( B ) O. K. the documents ; and ( degree Celsius ) set the passing class. The CPA test is a written scrutiny with chief accent on proving the proficient cognition with practical accomplishments.
To come in the audit profession, a CPA should hold had a minimal 1,000 hours of general audit during the last five old ages whereby 500 hours should be at the supervisory degree. The Directorate of Accountant under the Directorate General of Financial Institutions in the Ministry of Finance will allow an audit licence when demands are met. Most universities ‘ course of studies have topics associating to fiscal accounting, international accounting criterions, international auditing criterions, and concern and professional moralss.
A university or college must be recommended by the IAI and licensed by the Ministry of Education in order to present the Professional Education Program. In general, the course of study of the Professional Education Program covers all countries recommended by the IFAC educational guidelines, including fiscal accounting seminar, direction accounting seminar, revenue enhancement seminar, patterns for scrutinizing, concern and professional moralss, cognition of capital market, and concern environment.
Since Indonesia has committed to the acceptance of IFRS and ISA, the IAI in cooperation with the Ministry of Education should modify the course of study course of study for undergraduate classs, go oning professional instruction, and the Professional Education Program. This attempt needs to be intensified and be completed within a short timeframe given the complexnesss of IFRS and ISA. The IAI requires public comptrollers to go to a minimal 120 recognition hours of go oning professional instruction ( CPE ) every three old ages and non less than 30 recognition hours yearly.
Minimum 100 out of the 120 recognition hours must be in the signifier of structured acquisition activities. Of those needed credits, 30 per centum of those recognition hours can be claimed from developing suppliers other than the IAI, but merely if the IAI and/or Ministry of Finance acknowledge the preparation suppliers. At the beginning of every twelvemonth, all public comptrollers receive presentment about the standing of their CPE recognition hours. The Indonesian Institute of Accountants requires CPE-noncompliant members to carry through any deficit of recognition hr in the following twelvemonth.
On norm, more than 80 per centum of IAI members comply with CPE demands. Monitoring of non-compliance and countenance steps are besides set out by the Ministry of Finance and Bapepam. Dissimilarities in conformity Indonesian accounting dictums are issued by the Indonesian Accounting Standards Board ( DSAK ) of the Indonesian Institute of Accountants. They comprise 57 criterions ( PSAKs ) , 28 of the PSAKs were developed by mention to IASs and IFRSs, 20 were developed by mention to US GAAP dictums, and the balance is locally developed.
In 2007, the Indonesian Financial Accounting Standards were traveling toward converge with IFRS/IAS, and full acceptance was planned in 2012. There are many similarities and differences between IFRS and Indonesian GAAP and below is a treatment of some of the differences: The constructs of IAS 32, fiscal instruments: Disclosure and Presentation, and IAS 39, Fiscal Instruments: Recognition and measuring, peculiarly in the measuring and acknowledgment constructs of the fiscal statements instruments such as plus, liability and equity are non yet adopted by Indonesian GAAP.
Although Indonesian GAAP does mention to the historical cost construct, the criterion still permits the acknowledgment of plus reappraisal with authorities ‘s blessing. IFRS/IAS refers to the historical cost every bit good as just value constructs in which fiscal statements should be adjusted sporadically to the just value of the assets. Indonesian GAAP permits execution of pooling of involvements for the intent of pull offing minutess in concern combinations. This is inconsistent with IFRS 3, Business Combinations, which prohibits the pooling of involvement
Harmonizing to Indonesian GAAP, the good will that originates from a concern acquisition is to be amortized over non more than 20 old ages which contradicts the construct in IFRS, which states that the good will obtained from concern combinations should be evaluated on a regular footing in order to determine that the value of good will is non impaired. Indonesian GAAP has non yet adopted the construct of authorities grants accounting, as in IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, because the Indonesian authorities does non supply grants to the private sector.
As respects to consolidation, for Indonesian GAAP investing in subordinate should be accounted for utilizing equity method when the parent present separate fiscal statements as extra information to the amalgamate fiscal statements whereas for IFRS when an entity chosens or is required by local ordinances to show individually fiscal statements, investing in subordinate should be accounted for either at cost or in conformity to IAS 39.
For the related party revelation, the needed revelations in Indonesian GAAP are well similar to IFRS anticipate that: analysis by type of direction compensation is non required, the sum or proportion of outstanding balances can be disclosed and no specific demand to unwrap the disbursal recognized for the period in regard of bad debts due from related parties ( required for public companies ) .
Initial measuring for investing belongings under Indonesian GAAP is recognized at cost when acquired but Indonesian GAAP does non clear up constituents of cost, whereas under IAS it is at cost but with elucidations of cost constituents and what should non be included in the cost. Indonesian GAAP does non follow with IAS on the subsequent measuring of investing belongings where the measuring is based on just value theoretical account and cost theoretical account and for Indonesian GAAP investing classified as long – term assets are carried at cost, adjusted for important decreases or lasting diminution in value.
LIFO as a cost expression for stock lists is prohibited under IAS whereas Indonesian GAAP accepts it. On stock lists revelations, it is a demand to unwrap the transporting sum of stock lists carried at cyberspace realizable value, in contradiction to IAS where this demand is eliminated. The subsequent measuring for belongings, works and equipment in IAS is based on the cost theoretical account and reappraisal theoretical account, for Indonesian GAAP the cost method applies but the reappraisal is non permitted unless allowed by authorities ordinance.
The depreciation method and utile life under IAS should be reviewed at least at each fiscal year-end and under Indonesian GAAP, should be reviewed sporadically. Indonesian GAAP complies with IAS on the initial acknowledgment of an intangible plus which is recognized at cost. Indonesian GAAP does non follow with IAS in such that it prohibits the reappraisal of intangible assets which under IAS merely if an active market exists.
Equally far as the amortisation of good will is concerned, Indonesian GAAP does non follow with IFRS in such that under IFRS good will should non be amortized but should be tested for damage yearly, whereas harmonizing to Indonesian GAAP, good will should be amortized over its utile life, a period that should non transcend five old ages except that a longer period, but non transcending twenty old ages, can be used when there is a justifiable footing.
Negative good will under Indonesian GAAP is recognized as deferred income and recognized as income over a period of non less than 20 old ages, whereas under IAS, it is recognized as a addition in the income statement instantly Under Indonesian GAAP, gross acknowledgment measuring is in general similar to IFRS, except that certain industry-specific gross acknowledgment counsel may ensue in some measuring differences.
When it comes to the accounting policy alterations and mistakes, Indonesian GAAP does non follow with IFRS in such that it considers alteration in depreciation method as alteration in accounting policy whereas IFRS considers it as alteration in estimations. As respects the acknowledgment of adoption costs, IFRS allows that one may take from the benchmark or the allowed alternate method but Indonesian GAAP merely allows the alternate method of IFRS. For the acknowledgment of damage of assets Indonesian GAAP is similar to IFRS but does non supply any specific counsel for assets held for disposal.
Equally far as the sale and leaseback minutess are concerned, under Indonesian GAAP any net income or loss on sale is deferred and amortized in proportion to the amortisation of the leased plus if capital rental and in proportion to the amortisation of the rental disbursal if operating rental, whereas under IFRS the net income or loss on sale is amortized over the lease term. For the amalgamate fiscal statements, Indonesian GAAP does non supply freedoms such as under IFRS, it requires the readying of amalgamate fiscal statements by a parent entity that includes all qualified subordinates.
For the enumeration system, the Indonesian PSAK are otherwise numbered as compared to the IFRS but will to the full integrate their content. In order to to the full meet to the IFRS, the Indonesian accounting professional organic structure will hold to aline the above unsimilarities before the planned period of January 2012. Decision The accounting profession and criterions worldwide differ from a state to another due to different causes chiefly the proviso of finance, bing legal system, link between accounting and revenue enhancement and cultural differences.
Basing of the findings from the instance of Indonesia, accounting profession and criterions has reached at a certain degree of development although some differences between Indonesian GAAP and International Financial Reporting Standards ( IFRS ) . The current position of accounting profession and criterions in Indonesia, the Dewan Standar Akuntansi Keuangan or DSAK-IAI which is the Board of Indonesian Accountants Institute ( IAI ) , has issued 62 Statements of Financial Accounting Standards with a mark to to the full follow the IFRS by the terminal of 2010 and execution of all IFRS in Indonesian GAAP by the beginning of 2012..
However, the chief factors which influence these differences in Indonesia are fundamentally ensuing from the complexness of the Indonesian legal system because of bequest of Dutch jurisprudence mixed with the national legal system based on Indonesian principles of jurisprudence and justness.
But the major factor is the complication of cosmopolitan GAAP due to cultural differences between societies. Furthermore, comparing the Indonesian GAAP to the other developed systems worldwide in the same industry such as US GAAP and UK GAAP, there are still chief differences in intervention of IFRS which will be solved by harmonisation of criterions in the accounting profession and criterions.