Audit of a company in Indonesia, financial statements, accounting, consulting in Indonesia

Indonesian companies must keep accounting records of their transactions on a regular basis (monthly). Accounting records shall be kept in Indonesian.

The currency of accounting transactions and financial statements is the Indonesian rupiah (IDR). To use another functional currency companies must obtain permission of tax authorities.

Primary accounting documents of a company must be kept for 10 years.

Companies must file their financial statements along with a tax return with tax authorities of Indonesia.

Financial statements of Indonesian companies consist of 5 main financial sections:

1. Balance sheet;
2. Profit and loss statement;
3. Cash flow statement;
4. Statement of changes in equity;
5. Notes to financial statements.

Financial statements of the following companies must be audited:

1. Public companies;
2. Financial institutions (credit institutions, pension and investment funds, insurers);
3. Companies whose assets exceed 25 000 000 IDR;
4. Companies whose proceeds exceed 50 000 000 IDR;
5. Debtors of banks whose financial statements are subject to annual examination by the bank;
6. Companies at least partially owned by the state;
7. Companies that issue promissory notes;
8. Companies whose activity is connected with the management of a community fund;
9. Companies that are issuers of securities.

Companies may not use services of the same auditor or audit company during 6 straight years, unless there have been changes in the company’s structure.

Companies that are incorporated in Indonesia and have subsidiaries must prepare consolidated financial statements. Consolidated financial statements must be prepared in accordance with the financial reporting standards of Indonesia. The key factor in the consolidation of financial statements is the fact that the parent company has control over the subsidiary.