In many cases, accountants around the world faces greater scrutiny on their objectivity, integrity, competence, professionalism, their due care in conducting their duties as financial report reliability on both the issuance and the audit of it has become the major part of this advanced economy we are in now.
Accountants around the world has always been facing issues in conducting their professional role objectively and with integrity. This is due to the fact that the differentiating factor of the accountancy profession is that it’s willingness to accept responsibility on behalf of the public interest, and this responsibility is not limited to the individual client or the organization or the company where the accountant works, therefore it is of utmost importance that the profession has a code of ethics which will provide guidance for this responsibility. The three Indonesia accountant associations has their each their own code of ethics, the Indonesia Institute of Chartered Accountants/IAI as the first association whose code of ethics adopting IFAC’s 2018 Code of Ethics, while Indonesia Institute of Certified Public Accountants/IAPI has their code of ethics adopting IFAC’s since 2013 and IAMI has harmonized it’s existing code of ethics to IFAC’s code of ethics 2018,
It was in February 2019 in Brunei Darussalam while attending the ACCPAC’s 92nd meeting on February 11-15 initiated by the ministry of Finance’ Center for Supervision and Development of Financial Professions (Pusat Pembinaan dan Pengawasan Profesi Keuangan/P2PK) as the regulatory body for the profession, and fully supported and led by the Vice Minister of Finance, Professor Mardiasmo, the three associations and the P2PK formed a task force to develop the same code of ethics by adopting the IFAC’s International Ethics Standard Board For Accountants Handbook of International Code of Ethics for Professional Accountants 2018 edition.
Then after about one year’s of working on the project, starting on May 2020, as the country and the whole world experiencing the outbreak of the COVID19 virus pandemic, after finished with the project, the three associations and the P2PK started the a series socialization events of the new code of ethics to the profession, and in July 1,2020 Indonesian accountants has reached it’s own breakthrough with the landmark achievement of formalizing the ethical code of conducts for accountants. IAI and IAMI issued the Code of Ethics for Indonesia Accountants and IAPI issued the code of Ethics for Public Accountant profession with exception on part 4A that will have the effective date on or after December 31, 2021 for audit and financial report reviews.
The code of ethics contains requirements and applicable materials which will help and equip accountants to fulfil their responsibilities to act in protecting the public interest.
The structure of the code of ethics comprised of four sections,
- Section 1 is on Complying with the Code, Fundamental Principles and Conceptual Framework which is applicable for all professional
- Section 2 for Professional Accountants in Business, applicable for accountants working in businesses in exercising his professional duties
- Section 3, professional accountants in public practice
- Section 4A is on Independence for Audit and Review Engagements applicable when conducting audit or review engagements
- section 4B on Independence for Assurance Engagements other than Audit and Review Engagements.
Accountants are obliged to observe this code of ethics, while it is also recognized that there might be situations where the prevailing law will prevent accountants to adhere to a certain part of the code of ethics, and in situations like these, accountants are obliged to observe fully the other parts of the code of ethics.
Basic principles of ethics
That accountants have to observe all of the basic principles of ethics. Indonesia accountants’ code of ethics groups the Basic principles of ethics in five:
- integrity- firm and honest in all professional and business
- Objectivity- does not compromising professional judgement or business due to bias, conflict of interest or inappropriate influence from other
- Competence and professional due care for:
- Achieving and holding on the professional skills and knowledge required to assure that the organization or the client receiving competent professional service based on the most updated professional and technical standard as well as the prevailing requirement by the existing law, and
- Exercising the works responsibly in accordance with the prevailing professional and technical
- Confidentiality- upholding confidential information obtained as a result from the professional and business
- Professional conducts- observing the applicable law and avoiding any known conducts which will discredit the accountancy
Since then, there have been socialization events conducted by the three associations and the P2PK through, of course, online conferences and webinars countrywide, and has effectively reached to more members in shorter time thanks to this online way of communications in place of in-person meetings and or conferences.
With this code of ethics in place, the Indonesian accountants firstly can exercise his or her professional duties with much greater confidence and assurance where this code of ethics serves as their protection as well. Secondly accountants working in organizations or businesses or practicing accountants are now able to exercise influence on the organizations or companies they work for or businesses they serve by applying this code of ethics, and able to use this as their powerful tool to help shape the development of organization’s or business’ ethics.
It is no doubt that the launch of this code of ethics will strengthen the profession in the country greatly, empowering the accountants to exercise their professional duties to a higher level, and in turn will strengthen the country’s economy with greater professionalism.