Jiwasraya Case, IAPI Asked The Government And Parliament To Draft A Law On Financial Reports

JAKARTA - Responding to the Jiwasraya case, the Indonesian Institute of Certified Public Accountants (IAPI) asked the government and the DPR to draft a law related to financial reporting systems and governance. According to the Chairperson of IAPI, Tarkosunaryo, this rule is expected to be able to prevent accounting engineering practices that can harm users of financial statements.

He said IAPI supports the disclosure and examination of the Jiwasraya case which is currently being processed at the Attorney General's Office and the Supreme Audit Agency (BPK).

"We encourage the government to draft laws that regulate the system and management of financial reports to complement the Public Accountants Law which regulates auditors on financial reports," said Tarko in a discussion on "Regarding Jiwasraya Insurance from the Perspective of the Public Accountants Professional Organization" in Jakarta, Monday 13 January.

Basically, explained Tarko, the main problem Jiwasraya faced was in the effort to provide funds to pay due obligations, which resulted in the manipulation of financial reports.

"Engineering financial statements is not allowed to improve financial performance and to achieve targets. This is fraud," he said.

He said Jiwasraya's financial statements for the 2017 Fiscal Year had been audited by a public accountant who presented a profit of IDR 360 billion by attaching a 'modified opinion', without an explanation of the type and cause of the opinion obtained.

"We regret that Jiwasraya's complete financial statements for the 2017 Fiscal Year are not published. The 2018 and 2019 financial reports have not been audited. Jiwasraya's 2016 financial reports have been published with a total of about 500 pages," he said.

Tarko explained, 'modified opinion' is an opinion of the auditor other than 'unqualified' (WTP), which is caused by the inconsistency of the financial statements with accounting standards.

"Or, because the auditors lacked evidence, it was not sufficient to provide a WTP opinion," said Tarko.

The BPK report stated that the financial statements of Jiwasraya Insurance in 2017 received an adverse opinion, due to a shortage of technical reserves of IDR 7 trillion. The report from the Jiwasraya board of directors stated that this state-owned company recorded a profit of IDR 360 billion.

"In fact, it should have recorded a loss of Rp. 7 trillion," he said.