Audited statements for the AGM & company-law compliance
Directors are required to present the annual report to the general meeting of shareholders, the RUPS. For many companies, those financial statements must first be audited by a public accountant. We help you meet that on time.
When must an Indonesian company be audited?
Article 68 of Law No. 40 of 2007 on Limited Liability Companies requires financial statements to be audited by a public accountant where the company meets any one of the following:
- It collects and/or manages funds from the publicbanks, insurers, pension funds and the like.
- It has issued debt acknowledgement instruments to the publicincluding bonds and similar instruments.
- It is a public company (Tbk)listed, or with shares offered to the public.
- It is a state-owned limited company (persero).
- Its assets and/or turnover reach at least IDR 50 billioneither one is sufficient.
- It is required by other legislationfor instance OJK sector rules, or the obligation to file annual company reports.
The annual report, including the financial statements within it, must be presented by the directors to the general meeting of shareholders no later than six months after the company’s financial year ends. For companies meeting the criteria above, what is presented is the audited financial statements.
This summary is general information, not legal advice. For certainty on your company’s position, please consult us or your legal adviser.
What else it buys you
Standing with lenders
Audited statements strengthen credit applications and financing negotiations, because the bank is reading figures an independent party has verified.
01Order for shareholders
The AGM approves the accounts on a firm basis, reducing the scope for disputes between shareholders.
02Findings you can use
Our management letter maps weaknesses in controls and bookkeeping, together with recommended remediation.
03Ready for the bigger step
A track record of audited statements smooths due diligence when the company seeks investors, makes an acquisition, or prepares for an IPO.
04Frequently asked
Our assets are below IDR 50 billion, must we still be audited?
Not necessarily. The Article 68 criteria are alternatives: meeting any one of them triggers the obligation. So even a small company is caught if, for example, it collects funds from the public, is a state-owned limited company, or is required by sector regulation. If none applies, an audit becomes a choice rather than a duty.
When must the annual report reach the AGM?
No later than six months after the financial year ends. For a company closing on 31 December, that means the end of June the following year. Because the statements must first be audited for companies meeting the Article 68 criteria, the audit should begin in January or February.
Is an audit for the AGM the same as one for a tender?
The report is the same, an independent auditor’s report on the financial statements. Only the user differs. One audit can therefore serve the AGM, the bank and a tender at once, provided the financial year matches what is being asked for.
Our parent company is overseas, does that change anything?
The statutory obligation is unchanged; it attaches to the Indonesian entity. What usually needs coordinating is timing and reporting basis: the local statutory audit under Indonesian standards, alongside a group reporting package for the parent. We handle both in the same engagement.
Year end closed, AGM ahead?
An audit begun in January finishes well before June. One begun in May rarely does. Get in touch and we will set the schedule.