Acounting Standard and Disclosure

Capital Market will always be closely linked with the issue of disclosure of information that has to be made by Issuers or Public Companies to public since those two have acquired funds from public.

As the Capital Market authority, Bapepam feels obliged to continuously improve the quality of information disseminated to public as an effort to protect investors’ interests.

In the year 2002, a number of steps have been taken by Bapepam with regard to efforts in improving disclosure of information to public such as:

1.    The Drafting of Guidelines for Preparing and Disclosing  Issuer’s Financial Statements

       Financial Statements is an important source of information for investor to make an investment decision. However, Financial Statements has not yet delivered to the fullest extent financial information of an Issuer or a Public Company in a transparent manner so far.

       To respond to this matter, Bapepam worked together with The Jakarta Stock Exchange (JSX), The Indonesian Institute of Accountants and Indonesia Public Company Association in drafting a set of guidelines for Issuer and Public Company in preparing their Financial Statements. The guidelines stressed on specific information that must be stated in preparing financial Statements. It is hoped that these guidelines will help standardizing presentation and disclosure of information displayed in the Financial Statements as well as providing better quality of information for the end users of The Financial Statements.

      The guidelines for putting together and disclosing financial Statements were formulated based on different industries sector. Up to this point, the completely guidelines were covered 13 industries, which include manufacture, investment, commerce, construction, telecommunication, plantation, restaurant, real-estate, highway, hospital, cattle-breeding, hotels, and transportation industry.

     Those guidelines were formulated based on Bapepam Rule Number VIII.G.7 concerning Guidelines for the Preparation of Financial Statements. This guideline issued in the form of a Circular Note of Chairman of Bapepam. It is expected that the Issuers and Public Companies would not only meet the minimal requirements set in this Rule but also show motivation to present more informative report.

2.    The Issuance of Rule Concerning Accountant Independency

In November 2002, Bapepam issued a new rule concerning Independency of Accountant in Providing Auditing Services in Capital Market. In this rule, Bapepam required accountants to maintain their independency by not involving in relationships that may lead to conflict of interest during their assignments. Moreover, Bapepam also requested Public Accounting Firms to maintain their quality control system which takes into account the size and the nature of services offered by their firms.

With respect to assignment period, Bapepam has set a time limit of three  consecutive fiscal years for accountant and maximum of five  consecutive fiscal years for Public Accounting Firm to audit the same client. Both parties are allowed to audit the same client again only after working for three consecutive fiscal years with other clients.

Table of Contents Bapepam Annual Report 2002

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