Indonesia

Accounting, auditing, and financial reporting requirements in Indonesia are stipulated by the following laws and regulations:

• The Limited Liability Company Law No. 40 of 2007 requires corporate entities to prepare financial statements in accordance with accounting standards issued by the Dewan Standar Akuntansi Keuangan/Indonesian Financial Accounting Standard Board (DSAK) of the Ikatan Akuntan Indonesia/Institute of Indonesia Chartered Accountants (IAI). The DSAK issues Tier-1 SAK for domestic and foreign listed companies, as well as entities with public accountability, and Tier-2 SAK ETAP for entities with no public accountability. Tier-2 SAK ETAP was developed with IFRS for SMEs as a point of reference.
• The same law mandates audits for Indonesian companies that collect or manage public funds, issue debt-acknowledgements to the public, public companies, state-owned enterprises, companies with assets exceeding RP 50 billion, and other companies obliged by certain legislative regulations. The auditors of state-owned enterprises are required by law to perform both compliance audits and financial statement audits.
• Under Article 43 of the Public Accountants Act No. 5 of 2011, the Institut Akuntan Publik Indonesia/Indonesian Institute of Certified Public Accountants (IAPI) is responsible for adopting auditing standards—the Indonesian Public Accountant Professional Standards—set by the Audit Standards Committee of the IAPI.
• Under the Capital Market Law No. 8 of 1995 and the Banking Law, the Otoritas Jasa Keuangan/Financial Service Authority (OJK) establishes financial reporting requirements for entities under its supervision (banking, capital markets, and non-bank financial industries sectors) and mandates the use of DSAK-issued accounting standards. In addition, entities supervised by the OJK are required to be audited by a Certified Public Accountant. The OJK also registers and oversees auditors who provide audit services for the entities under its supervision.

In Indonesia, both the audit and accountancy professions are regulated.

To practice the accountancy profession in Indonesia, individuals have to be members of the Ikatan Akuntan Indonesia/Institute of Indonesia Chartered Accountants (IAI) (for accountants) or Institut Akuntan Publik Indonesia/Indonesian Institute of Certified Public Accountants (IAPI) (for public accountants). Under the Ministry of Higher Education Decree No. 153 of 2014 on the Professional Accountancy Education Program, the successful completion of the Pendidikan Profesi Akuntan/The Professional Accounting Education Program (PPAk) is a prerequisite for membership in either of the accountancy bodies. Individuals who pass the PPAk are issued the Register Negara Akuntan/State Registered Accountant title (Ak) by the Pusat Pembinaan Profesi Keuangan/Center for Supervision of the Financial Service Profession (PPPK). Both the IAI and IAPI establish requirements for their respective membership, including qualifying exams, practical experience, and continuing professional development (CPD).

The Minister of Finance Decree No. 263 of 2014 (KMK) authorizes the IAI to regulate professional accountants. On February 4, 2014, the Indonesian Government issued Minister of Finance Decree No. 25 of 2014 (PMK) concerning State Registered Accountants (Ak). The PMK was issued to establish the pathways to becoming a professional accountant and to encourage the development of the accounting profession in Indonesia. This decree gives the Ministry of Finance (MoF) the responsibility to regulate all Aks in Indonesia. The decree mandates that Aks (1) become competent by going through a process of professional education that includes taking the Chartered Accountant examination and obtaining relevant practical experience; (2) maintain competence by meeting CPD requirements; (3) be members of the IAI; and (4) comply with professional standards and the code of conduct.

The Public Accountants Act No.5 of 2011 (PAA) authorizes the IAPI to regulate public accountants and legally empowers it to set auditing and ethical standards for them. The legal foundation for the regulation of auditors is laid down in the PAA. The PAA establishes (1) the framework for regulating the audit profession and licensing auditors; (2) the framework and institutional arrangements for ethics and auditing standard setting; (3) an oversight body with a mandate to monitor and enforce accounting and auditing standards; (4) a disciplinary mechanisms for investigating and disciplining accountants in public practice for misconduct and breach of professional and ethics standards; (5) legal authority for the public accounting professional association; and (6) requirements for obtaining and maintaining membership in the professional accountancy organization for practicing auditors. In addition to the PAA, the government issued Decree No. 20 of 2015 on the Practice of Public Accountants, which details the requirements for becoming a public accountant and specifies the services that they can provide.

In 2008, the MoF issued Decree No. 100 of 2008 (PMK), which makes the Pusat Pembinaan Akuntan dan Jasa Penilai/Center for Supervision of Accountants and Appraiser Services (PPAJP) responsible for the supervision of the accountancy profession, including monitoring the professional activity of statutory auditors. One of the functions of the PPAJP, among others, was to facilitate and formulate strategic policies for the accountancy profession. In 2014, the MoF issued Decree No. 206 of 2014 on the Organization and Working Procedures of the Ministry of Finance. Under this Decree, the PPAJP was re-established as the Pusat Pembinaan Profesi Keuangan/Center for Supervision of the Financial Service Profession (PPPK), maintaining the PPAJP’s functions.

The PMK decree allows State Registered Accountants to establish accounting services firms, called Kantor Jasa Akuntansi/Accountancy Services Firm (KJA). KJA firms can offer services such as bookkeeping, accounting system services, consulting, taxation and financial reporting services but are not permitted to provide assurance services. The PAA regulates and approves the establishment of Kantor Akuntan Publik/Public Accountancy Firms (KAP) that provide assurance services. The PPPK is responsible for registering all KJA and KAP firms in Indonesia.

Under the Capital Market Law No.8 of 1995, the Otoritas Jasa Keuangan/Financial Service Authority (OJK) registers and oversees auditors who provide audit services for the entities under its supervision (banking, capital markets, and non-bank financial industries sectors). In addition, under State Finance Law No. 17 of 2003 and BPK Regulation No. 1 of 2008, the Badan Pemeriksa Keuangan/Supreme Audit Board (BPK) is given the authority to review audit engagement work conducted by IAPI members on public sector entities.

In accordance with the Minister of Finance Regulation (PMK) Number 124 of 2024 concerning the Organization and Work Procedures of the Ministry of Finance, the former Center for Supervision of Financial Services (Pusat Pembinaan Profesi Keuangan – PPPK) has been reorganized into the Directorate of Financial Profession Development (Direktorat Pembinaan Profesi Keuangan – DPPK) under the Directorate General of Financial Sector Stability and Development (DJSPSK) MoF.

The DPPK continues to serve as the authority responsible for the development and supervision of the accountancy profession in Indonesia, including audit oversight functions as mandated by the Public Accountants Act No. 5 of 2011. Its responsibilities include issuing practicing licenses to public accountants and audit firms, establishing requirements to obtain and maintain such licenses, setting continuing professional development (CPD) obligations, regulating auditor rotation, and conducting investigations and disciplinary actions.

The Directorate is also mandated to perform inspections of the audit work conducted by auditors and audit firms to ensure compliance with licensing requirements and the maintenance of effective quality control systems.

DPPK is a member of the International Forum of Independent Audit Regulators (IFIAR) and the ASEAN Audit Regulators Group and is recognized by the European Commission (EC) and Swiss Federal Audit Oversight Authority (FAOA) as having an audit oversight system compatible with the requirements in the European Union and Switzerland.

There are three national professional accountancy organizations operating in Indonesia:

Ikatan Akuntan Indonesia/Institute of Indonesia Chartered Accountants (IAI)

The IAI is the largest and oldest accounting association in Indonesia, established on December 23, 1957. IAI has wide-ranging responsibilities in the accounting profession: regulate professional accountants, setting accounting standards in the private sector, administering the Chartered Accountant Indonesia exam, providing continuing professional education, establishing a code of ethics, adopting professional standards, and maintaining a disciplinary system for members. IAI membership comprises accountants from all accounting backgrounds, including professional accountants in business, public accountants/auditors, management accountants, tax accountants, internal auditors, academics, syariah accountants and public sector accountants. Prior to 2014, membership in the IAI was voluntary; however, in 2014, the Minister of Finance Decree No. 25 of 2014 (PMK) on State Registered Accountants introduced the requirement for accountants to become a member of a professional organization prior to their registration with the Minister of Finance. The PMK was superseded by the Minister of Finance of the Republic of Indonesia’s Regulation Number 216/PMK.01/2017 on Registered Accountants (PMK 216), which further strengthened the standing of the IAI in the profession.

IAI is one of the founding members of the International Federation of Accountants (IFAC) and the ASEAN Federation of Accountants (AFA) and is also a member of Chartered Accountants Worldwide (CAW).

Institut Akuntan Manajemen Indonesia/Indonesian Institute of Management Accountants (IAMI)

The IAMI consists of management accountants from private sectors. IAMI was established on April 1, 2008. Previously, it was a part of the IAI before becoming an independent organization in 2007. One of the IAMI's key activities in pursuing its vision is to promote and uphold the implementation of professional standards and codes of ethics among its members.

Institut Akuntan Publik Indonesia/Indonesian Institute of Certified Public Accountants (IAPI)

According to the Law No. 5/2011 of Public Accountant and the Government Regulation No. 20/2015 of Public Accountant Practices, IAPI is an independent organization and regulator of Public Accountants (Auditors). Its responsibilities include (i) implementing and setting IPD and CPD requirements for its members, for example, carrying out the Professional Public Accountant Examination; (ii) issuing audit standards to be applied by auditors; (iii) issuing and monitoring a code of professional conduct for its members; (iv) establishing an I&D for its members; and (v) establishing a quality assurance (QA) review system for its members. Membership with the IAPI is mandatory for all public accountants. The IAPI was once a part of the IAI, first as a department, then as an association member between 2007 and 2012. In 2012, the IAI eliminated association membership and, as consequence, the IAPI’s membership with the IAI ended and the IAPI became an independent organization. In addition to being an IFAC Member, IAPI is also an associate member of the ASEAN Federation of Accountants.

Public Accountants (Auditors) in Indonesia are subject to a multi-layer system of supervision, with each responsible party conducting quality assurance (QA) reviews of auditors.

The Public Accountants Law No. 5 of 2011 requires the establishment of a mandatory QA review system for all audits in Indonesia. In accordance with the Act, The Directorate of Financial Profession Development (Direktorat Pembinaan Profesi Keuangan – DPPK) under the Directorate General of Financial Sector Stability and Development (DJSPSK) MoF, and Indonesian Institute of Certified Public Accountants (Institut Akuntan Publik Indonesia – IAPI) are responsible for establishing a QA review system for Public Accountants and firms. All three have established QA review systems. ISQC 1 is adopted in Indonesia.

The OJK in accordance the Capital Market Law No. 8 of 1995 is also empowered to establish a QA system for Public Accountants (Auditors) providing services to companies under its supervision— banks, listed companies, insurance companies, and financial institutions.

Additionally, pursuant to State Finance Law No. 17 of 2003 and BPK Regulation No. 1 of 2008, the Audit Board of the Republic of Indonesia (BPK) is vested with the authority to review the audit engagements carried out by public accounting firms and auditors engaged on behalf of BPK, to ensure compliance with applicable auditing standards and quality requirements.

DPPK priority of inspections are auditors of PIEs—listed companies and financial institutions—although DPPPK also conducts inspection on other audit firms. According to the DPPPK, it inspects Big-10 firms annually, second-tier firms biannually and other firms at least once in four or five years.

IAPI reports that its QA system is developed in line with the requirements of SMO 1 and covers its entire membership base (those who provide assurance and non-assurance services). IAPI reports that the QA system by the DPPPK is also developed in line with SMO 1 requirements. It is unclear whether the BPK’s or OJK’s systems are in line with SMO 1 requirements.

Beginning in 2022, IAI commenced its own quality management–focused review activities, in coordination with DPPK, aimed at monitoring Compliance Accountants (CAs) in Accounting Services Firms (KJAs). These activities are aligned with the International Standards on Quality Management (ISQM 1 and ISQM 2), which establish a risk-based approach to quality management for firms providing accounting and related services.

Given the overlapping responsibilities of multiple authorities involved in quality assurance reviews in Indonesia, discussions have continued among IAPI, PPPK/DPPK, and OJK to formalize a coordinated multi-agency QA review system. Coordination among these institutions has progressed, and joint-review mechanisms are being developed to streamline oversight and reduce duplication across the profession.

Current Status: Partially Adopted

In Indonesia, the Ministry of Higher Education, Ministry of Finance (MoF), Ikatan Akuntan Indonesia/Institute of Indonesia Chartered Accountants (IAI), and Institut Akuntan Publik Indonesia/Indonesian Institute of Certified Public Accountants (IAPI) have a role in implementing IPD and CPD requirements for professional accountants.

Under MoF Decree No. 25 of 2014, and with the approval of the Ministry of Higher Education, the IAI is responsible for setting IPD requirements for accountants, including developing the Professional Accountancy Education Program (PPAk), a program that is to be completed by all individuals who wish to enter the profession. This was superseded by the Minister of Finance of the Republic of Indonesia’s Regulation Number 216/PMK.01/2017 on Registered Accountants (PMK 216), further strengthened IAI’s role in the accountancy profession in Indonesia, as initially established in the Law No.34/1954 on the Accountant Title.

In addition, the IAI has developed the Standar Pendidikan Akuntansi Indonesia/Indonesian Accounting Education Standards, with the support of the World Bank. These standards are to be used when developing accounting education programs.

IAI’s CA program (including its examination) consists of 3 (three) levels: foundation level (CAFB), professional level, and advanced level in line with provisions of IES 2 – Technical Competence. To facilitate students in conducting the exams, IAI has developed a Computer Based Written Exam in 2020, providing members with option to attempt their examinations in designated computer-based exam centers.

The Public Accountants Act of 2011 and MoF Regulation No. 17 of 2008 set forth the requirements for becoming a registered public accountant. This process includes completing the PPAk and passing the Indonesia CPA examination administered by the IAPI.

Both IAI and IAPI report that the IES are incorporated into the educational programs in Indonesia for all professional accountants. Both IAI and IAPI report that the revised IES are incorporated in Indonesia.

Current Status: Adopted

Under the Public Accountants Law of 2011, the Institut Akuntan Publik Indonesia/Indonesian Institute of Certified Public Accountants (IAPI) has direct responsibility for setting auditing standards in Indonesia. It does so via the Indonesian Auditing and Assurance Standards Board (“Indonesian AASB”) which has adopted the Indonesian Public Accountant Professional Standards (SPAPs) based on the ISA and translated into Bahasa Indonesia. The SPAPs are currently based on the 2020 IAASB Handbook. The Indonesia AASB is reviewing and has made plans to adopt ISA 315 (revised 2019), ISQM 1, 2, and ISA 220 (revised), and ISA 600 over the next two—three years.

As mandated by KMK No. 263 and PMK No. 216, the Institute of Indonesia Chartered Accountants (IAI) issues professional and ethical standards for its members. The DSPJA IAI, an independent standard-setting body under IAI, develops professional standards for licensed members providing non-assurance services through public accounting service firms (KJA). DSPJA adopts and issues standards and guidance based on the IAASB’s International Standards on Related Services and other relevant pronouncements.

Current Status: Partially Adopted

The Ikatan Akuntan Indonesia/Institute of Indonesia Chartered Accountants (IAI) and the Institut Akuntan Publik Indonesia/Indonesian Institute of Certified Public Accountants (IAPI) are responsible for setting ethical requirements for their members, in accordance with the Minister of Finance Decree No. 216/PMK.01/2017, and the Public Accountants Act No. 5 of 2011.

IAI, IAPI, and IAMI as the three recognized PAOs in Indonesia have published a joint Code of Ethics for all professional accountants in Indonesia called the Kode Etik Akuntan Indonesia. The latest joint Code has been updated and aligned with the 2024 IESBA International Code of Ethics for Professional Accountants.

Current Status: Adopted

The Government Accounting Standard Committee (KSAP), established under Minister of Finance Decree No. 379 of 2004, is responsible for setting Public Sector Accounting Standards in Indonesia. The KSAP is an independent committee comprising representatives from the Ikatan Akuntan Indonesia/Institute of Indonesia Chartered Accountants, academia, and government practitioners, among others. The KSAP uses IPSASs as the main reference when drafting national public sector accounting standards; however, modifications are made to allow for the differences in Indonesia’s legal and regulatory environment. As of 2015, Indonesian public sector accounting standards are defined as full accrual standards.

Current Status: Partially Adopted

Professional accountants, Chartered Accountant (CA) and Public Accountants (Auditors), are subject to a multi-layer system of supervision, with each responsible party conducting investigative and disciplinary (I&D) processes of professionals. The investigation and discipline (I&D) of accountancy professionals in Indonesia is shared between the Directorate of Financial Profession Development (Direktorat Pembinaan Profesi Keuangan – DPPK) MoF, Otoritas Jasa Keuangan/Financial Service Authority (OJK), Ikatan Akuntan Indonesia/Institute of Indonesia Chartered Accountants (IAI), and the Institut Akuntan Publik Indonesia/Indonesian Institute of Certified Public Accountants (IAPI).

In accordance with the MoF Decree No. 216/PMK.01/2017 the IAI has established I&D mechanisms for its members. The IAPI, empowered by the Public Accountants Act No. 5 of 2011, also established an I&D system for its members. Disciplinary actions can lead to written warnings, membership suspension, or Permanent termination of IAI membership and revocation of any associated CA or other IAI certificates. Additionally, a Registered Accountant whose certification or membership is revoked by the IAI may also have their Registered Accountant (RNA) certificate revoked by the Head of the DPPK. Both systems are aligned with the requirements of SMO 6.

The OJK is authorized to conduct investigation and disciplinary (I&D) procedures for professional accountants providing services to entities under its supervision, including banks, listed companies, insurance companies, and other financial institutions. The DPPK is responsible for I&D relating to professional accountants in Accounting Services Firms (KJAs) and public accountants in Public Accountancy Firms (KAPs), with authority to issue warnings, fines, and other sanctions. Both bodies coordinate with IAI and IAPI to reduce overlap in disciplinary actions for public accountants who perform both assurance and non-assurance services. However, available information does not indicate whether the I&D systems of OJK and PPPK fully align with the requirements of SMO 6.

Within the profession, the IAI National Council (DPN IAI) and the IAI Disciplinary and Ethics Board (DPDA IAI) impose sanctions on members for ethical and professional violations, while the IAI Supervisory Board (Dewas IAI) acts as the appellate body.

In 2020, IAI has established its Organizational Rules to cover mechanism for members’ discipline enforcement for implementation.

Current Status: Partially Adopted

In accordance with the Companies Law and the Capital Market Act, all companies must prepare annual financial statements following the financial reporting requirements established by the Indonesian Financial Accounting Standards Board (Dewan Standar Akuntansi Keuangan – DSAK-IAI). The DSAK-IAI, under the Institute of Indonesia Chartered Accountants (Ikatan Akuntan Indonesia – IAI), is the independent national accounting standard-setting body that establishes the Indonesian Financial Accounting Standards (Standar Akuntansi Keuangan – SAK).

DSAK-IAI has developed SAK, which are based on IFRS with adjustments to Indonesia’s conditions and regulations and to the effective date (one year gap), for all listed companies and other entities with significant public accountability. DSAK-IAI also published the SAK ETAP for entities without public accountability. SAK ETAP will be superseded by SAK PE for private entities effective 1 January 2025 (with option for early adoption). SAK PE is a convergence of the 2015 IFRS for SMEs. For micro, small, and medium enterprises which meet the criteria sets in prevailing laws on MSMEs, DSAK-IAI published the SAK EMKM.

As part of IAI’s collaboration with the Financial Services Authority (Otoritas Jasa Keuangan – OJK), DSAK-IAI—through authorization from the IAI National Council (Dewan Pengurus Nasional – DPN IAI)—introduced SAK Internasional (SAK-I) in January 2023.

SAK-I is a word-for-word translation of IFRS Accounting Standards, providing a framework for entities that meet OJK’s eligibility criteria to prepare their financial statements using full IFRS as endorsed by DSAK-IAI. The implementation timeline, eligibility, and transition arrangements are being determined by OJK in consultation with IAI and other stakeholders.

Current Status: Adopted

Relevant Organizations

• Indonesia Financial Service Authority (OJK)
• Institute of Indonesia Chartered Accountants (IAI)
• Institut Akuntan Publik Indonesia (IAPI)
• Finance Professions Supervisory Center (PPPK)

Relevant Legislation

• Law No. 34 of 1954 on the Use of the Title “Accountant”
• Capital Market Act No. 8 of 1995
• Limited Liability Company Law No. 40 of 2007
• Minister of Finance Decree No. 216/PMK.01/2017
• Minister of Finance Decree No. 263/KMK.01/2014
• Public Accountants Act No. 5 of 2011
• Financial Sector Development and Strengthening Law (Law No. 4 of 2023 – P2SK Law)

Relevant Publications

• Financial Stability Board, “Global Shadow Banking Monitoring Report 2014—Indonesia,” October 2014.
• IAI, SMO Action Plan, TBD 2015.
• IAPI, SMO Action Plan, TBD, 2023.
• International Forum of Independent Audit Regulators (IFIAR), “Member Profile—Indonesia.”
• World Bank, “Report on the Observance of Standards and Codes (ROSC)—Accounting and Auditing (A&A): Indonesia,” 2018.
• World Bank, “Report on the Observance of Standards and Codes (ROSC)—Accounting and Auditing (A&A): Indonesia,” 2010.
• World Bank, “Current Status of the Accounting and Auditing Profession in ASEAN Countries,” September 2014.
• IFAC, Uniting for a Stronger Accountancy Profession: National PAOs introduce a joint code of ethic for Indonesian Accountants, 2021
• IFRS, Who uses IFRS Accounting Standards, Indonesia, 2025.
• IFAC, IAI’s SPK: Strengthening Indonesia’s Role in the Global Sustainability Reporting Landscape, 2025
• IFRS, Jurisdictional Snapshot: Indonesia, 2025.