Auditing Firm Indonesia

Limited review refers to review conducted by independent auditors of entity’s financial statements for a period that is shorter than the entity’s financial year. Most of the times, limited review is done when companies listed on Stock Exchange are required to file quarterly financial statements, or subsidiary of a foreign holding company has to finalise it’s books of accounts for the closing of the Foreign Holding company which has a different financial year. Independent Auditor has to follow Standard on Review Engagements – SPR No. 2410 i.e.

Review of the Interim Financial Information Performed by the independent auditor of the entity.The objective limited review engagement is to enable the auditor to express a conclusion whether, on the basis of the review, anything has come to the auditor’s attention that causes the auditor to believe that the interim financial information is not prepared, in all material respects, in accordance with an applicable financial reporting framework. A limited review does not provide a basis for expressing an opinion whether the financial information gives a true and fair view, or is presented fairly, in all material respects, in accordance with an applicable financial reporting framework. A review, in contrast to an audit, is not designed to obtain reasonable assurance that the interim financial information is free from material misstatement. A review may bring significant matters affecting the interim financial information to the auditor’s attention, but it does not provide all of the evidence that would be required in an audit.   

One of the most important steps when taking any company public involves conducting an audit of the company’s financial statements. The OJK (Otoritas Jasa Keuangan/ The Financial Service Authority) requires companies that want to go public to file audited financial statements for the previous three fiscal years of the company’s operations with the OJK. The audit is critical to the going public process. Therefore, the process of selecting the right audit firm is as equally critical.  So how does a Company attempting to go public select an audit firm? There are many factors that can play into the decision. Here are three reasons why you should consider Jimmy Budhi & Rekan as your auditor for IPO purposes: 

Jimmy Budhi & Rekan is Registered with the OJK?
An important factor in selecting an audit firm as the IPO auditor is whether a firm is appropriately licensed and registered to conduct audits for IPO. CPA firms in Indonesia that provide audit services to private companies must be licensed and registered with the Ministry of Finance of the Republic of Indonesia. CPA Firms that audit public companies must also be registered with the OJK. Since 2003, Jimmy Budhi & Rekan has been listed with the OJK (p.k.a Bapepam). 

Jimmy Budhi & Rekan Has Extensive Experience
Previous experience of an audit firm in conducting audits for IPO is a very important factor that should be considered. Jimmy Budhi & Rekan have been able to gain significant experience conducting public company audits in Indonesia.
There are many other considerations associated with selecting right audit firm. It’s important that the Emerging Growth Company ensure that they consider carefully consider all of the factors mentioned to ensure they select the right audit firm. Remember, this is a long-term relationship, so it’s important to make the right choice the first time. 

Is the Price Right?
The audit engagement fee is often the single area of concern for many prospective companies looking to go public. Audit costs can constitute a considerable portion of the total going public costs. Emerging Growth Companies can ensure that they are getting a fair price by using two common sense methods.
The first method involves simply putting the audit job out to bid. The company should narrow its selection down to at least three firm bids. Of course, one should evaluate all factors equally before going with the lowest bidder, but telling audit firms that you are seeking bids from other firms should ensure that they offer you a fair price.

 
The other methodology involves performing sort of a comparable audit fee analysis. This is performed by comparing the offer received to historical audit fees charged to companies that have already gone public. You can easily get this information by going to the Securities and Exchange Commission’s website and obtaining S-1 registration statements. In those documents, companies are required to disclose all expenses incurred with their public offering. The audit fees should be towards the back of the document along with the other fees summarizing the total cost of the offering. The results could vary, but narrowing down your search of comparable companies to those which are similar in size to yours should provide enough data to evaluate the bid. 

What is a Forensic Audit

A forensic audit is an examination and evaluation of a firm’s or individual’s financial information for use as evidence in court. The work normally involves an investigation into the financial affairs of an entity and is often associated with investigations into alleged fraudulent activity.  

The purpose of the investigation, in the case of an alleged fraud, would be to discover if a fraud had actually taken place, to identify those involved, to quantify the monetary amount of the fraud (ie the financial loss suffered), and to ultimately present findings to the client and potentially to court. 

What are the types of forensic audit?
Forensic audit can investigate many different types of fraud, which may include conflict of interest, bribery, extortion, asset misappropriation and financial statement fraud.
A conflict of interest is a situation where an officer of a company uses his or her influence to achieve a personal gain which causes the company to incur losses. A bribery is offering money (or something else of value) in order to influence a situation. An extortion is the opposite of bribery, and happens when money is demanded (rather than offered) in order to secure a particular outcome. Financial statement fraud is a type of fraud that causes a material misstatement in the financial statements.

How we deliver our forensic audit?
The process of conducting a forensic investigation is, in many ways, similar to the process of conducting an audit, but with some additional considerations. It will include a planning stage, a period when evidence is gathered, a review process, and a report.
Our investigators will consider the best way to gather evidence, including testing of controls to identify the weaknesses, which allowed the fraud to be perpetrated, the use of analytical procedures to compare trends over time or to provide comparatives between different segments of the business, the use of computer assisted audit techniques, substantive techniques such as reconciliations, cash counts and reviews of documentation, and interviews with the suspect and other officers.

What are the deliverables of a forensic audit?
The main deliverables of a forensic audit is a report containing the findings of the investigation, including a summary of evidence and a conclusion as to the amount of loss suffered as a result of the fraud.
Additionally, the investigators may report how the fraudster set up the fraud scheme, which controls, if any, were circumvented, and investigator’s recommendation for improvements of controls within the organization to prevent any similar frauds occurring in the future.

For more information, please contact:
KAP Jimmy Budhi & Rekan
Name: Winnie Geronimo
Email: winnie@jimmybudhicpa.com
Phone: +62 21 579 56789

In the context of mergers and acquisitions, potential investors often normally obtain certain level of comfort on their investment target by requiring the target to get audited. The purpose of an audit In the context of mergers and acquisitions is to provide assurance that management has presented a true and fair view of a company’s financial performance and position. 

An audit is concerned with historical financial statements only and it is different with a financial due diligence. A financial due diligence, on the other hand, would incorporate a greater scope (please visit our non-assurance services if you are interested with financial due diligence services). 

Jimmy Budhi & Rekan has extensive past experience in providing audits for mergers and acquisitions.

One of the most important steps when taking any company public involves conducting an audit of the company’s financial statements. The OJK (Otoritas Jasa Keuangan/ The Financial Service Authority) requires companies that want to go public to file audited financial statements for the previous three fiscal years of the company’s operations with the OJK.

The audit is critical to the going public process. Therefore, the process of selecting the right audit firm is as equally critical.  So how does a Company attempting to go public select an audit firm? There are many factors that can play into the decision. Here are three reasons why you should consider Jimmy Budhi & Rekan as your auditor for IPO purposes:

Jimmy Budhi & Rekan is Registered with the OJK?
An important factor in selecting an audit firm as the IPO auditor is whether a firm is appropriately licensed and registered to conduct audits for IPO. CPA firms in Indonesia that provide audit services to private companies must be licensed and registered with the Ministry of Finance of the Republic of Indonesia. CPA Firms that audit public companies must also be registered with the OJK. Since 2003, Jimmy Budhi & Rekan has been listed with the OJK (p.k.a Bapepam).

Jimmy Budhi & Rekan Has Extensive Experience
Previous experience of an audit firm in conducting audits for IPO is a very important factor that should be considered. Jimmy Budhi & Rekan have been able to gain significant experience conducting public company audits in Indonesia.

There are many other considerations associated with selecting right audit firm. It’s important that the Emerging Growth Company ensure that they consider carefully consider all of the factors mentioned to ensure they select the right audit firm. Remember, this is a long-term relationship, so it’s important to make the right choice the first time.

Is the Price Right?
The audit engagement fee is often the single area of concern for many prospective companies looking to go public. Audit costs can constitute a considerable portion of the total going public costs. Emerging Growth Companies can ensure that they are getting a fair price by using two common sense methods.

The first method involves simply putting the audit job out to bid. The company should narrow its selection down to at least three firm bids. Of course, one should evaluate all factors equally before going with the lowest bidder, but telling audit firms that you are seeking bids from other firms should ensure that they offer you a fair price.

The other methodology involves performing sort of a comparable audit fee analysis. This is performed by comparing the offer received to historical audit fees charged to companies that have already gone public. You can easily get this information by going to the Securities and Exchange Commission’s website and obtaining S-1 registration statements. In those documents, companies are required to disclose all expenses incurred with their public offering. The audit fees should be towards the back of the document along with the other fees summarizing the total cost of the offering. The results could vary, but narrowing down your search of comparable companies to those which are similar in size to yours should provide enough data to evaluate the bid. 

For more information, click this to download !

Executing a successful IPO ” for companies serious about going public – the time is prepare now ”