Audit of companies registered in Indonesia

The financial condition of a company is an important indicator of its success. One of the key ways to assess and confirm this condition is an audit of financial statements.

What is an audit?

An audit is the process of verifying a company's financial statements to confirm their reliability and compliance with accounting principles. The main purpose of the audit is to assess the accuracy of the presentation of financial information and its compliance with generally accepted standards. The result of the audit is an audit report that informs interested parties about the state of the company.

Why should a company conduct an audit?

Confirmation of the reliability of financial statements: The audit verifies whether the company's financial statements comply with established accounting standards, which contributes to the trust of investors, creditors and other interested parties.

Compliance with legal requirements: Auditing is mandatory for certain categories of companies according to the law, which helps to avoid legal problems and fines.

According to article 68 of the Law on Companies No. 40 of 2007, auditing is mandatory for the following categories of companies:

  • Companies that manage public funds;

  • Public companies;

  • Companies declared bankrupt;

  • Companies with assets and turnover of over 50 billion IDR;

  • Companies that are required to conduct audits under the law.

Internal control assessment: The audit identifies weaknesses in the internal control system and offers recommendations for their elimination, which contributes to improving the efficiency of the company's management.

Attracting investments: Reliable and verified financial reports increase the attractiveness of the company for investors and potential partners.

Detection and prevention of errors and fraud: Auditors help to detect and prevent errors or fraudulent activities within the company.

Making informed management decisions: An audit provides an objective and independent assessment of the company's financial condition, which helps management make more informed decisions.

Types of audit

  1. Audit of financial statements: Verification of compliance of financial statements with accounting principles.

  2. Operational audit: Evaluation of the internal control system and development of recommendations for its improvement.

  3. Compliance Audit: Verification of the company's compliance with government regulations and internal policies.

  4. Performance audit: Assessment of public financial management and performance of functions by public institutions.

Documents required for the audit

  • The following documents are required to conduct an ISA (Indonesia Financial Audit Standards) audit

  • The balance sheet

  • Profit and loss

  • statement A working document on the main cash schedule

  • Bank statement

  • Bank confirmation letter

  • Cash verification protocol

Types of audit reports

  1. Opinion with reservations: The financial statements are reliable, but there are minor problems.

  2. Opinion without reservations: The financial statements comply with accounting standards.

  3. Disclaimer: Significant errors in reporting or audit limitations do not allow us to give a conclusion.

  4. Unfavorable opinion: The financial statements do not meet the standards or contain significant errors.

If you need an audit or would like to learn more about the process and cost, please contact us. We will help you ensure the transparency and reliability of your company's financial statements.

Contact us for details