Indonesia’s MoF Mulls Sanctions for Deloitte

JAKARTA (TheInsiderStories)Indonesia’s Ministry of Finance mulled a sanction for accounting giant Deloitte Indonesia for its role in the default of PT Sunprima Nusantara Financing (SNP Finance)’s medium-term note.

Head of Financial Support Profession Development Center of MoF Langgeng Subur on Tuesday (7/7) said the investigation of the case had finished and the ministry has submitted a list of findings and is currently waiting for Deloitte Indonesia responses.

“We have submitted a list of temporary findings to the Financial Services Authority [FSA],” he added, as quoted by Kontan.

Subur said there are several findings highlighted after the investigation. First, regarding auditor skepticism and understanding of the financial recording system used by the SNP Finance.

Second, Deloitte Indonesia is accused of failing to look thoroughly at the SNP Finance’s financial documents as the latter has been a client for quite a while.

The MoF will coordinate with FSA and will request views from Indonesia Institute of Certified Public Accountants before deciding any sanction for Deloitte. The highest legal basis that regulates sanction for the independent auditor is Law 5/2011 on Public Accountant. Article 21 paragraph 1 letter b states the public accountant may be revoked if the public accountant is imposed an administrative sanction of license revoke.

Meanwhile, Head of Supervision Department of Non-Bank Financial Industry at FSA Bambang W. Budiawan said FSA will take imposed sanctions against Deloitte Indonesia if the MoF has concluded the violation and has imposed a sanction on the public accountant.

The sanction imposed can be a written warning, fines, registration freezing until the cancellation of public accountant license.

The failure case of SNP Finance is surprising because the company received a good rating from PT Pefindo. In addition, there are many victims involved in this case due to the issuance amount of Rp1.8 trillion.

There are 14 banks listed as creditors, of which three big banks namely Bank Mandiri, Bank Central Asia, and Bank Panin. In addition, other 11 smaller banks hold the MTN with bill ranging from Rp16 billion to Rp77 billion. The case potentially reduces the capital adequacy ratio of the smaller banks.