Frequently Asked Questions: #pma-company-financial-audit-frequency

A PMA company must have its annual financial statements audited by a registered public accountant if it meets the criteria of Article 68 of the Company Law (UU 40/2007). Here are the key points regarding financial audits for PMA companies:

• When an Audit Is Mandatory: Under Article 68 of UU 40/2007, an audit is required if the company has total assets and/or annual turnover of at least Rp 50 billion, collects or manages public funds, issues debt instruments to the public, is publicly listed or state-owned, or where other regulations require it. Companies meeting any of these criteria must be audited every year.

• Voluntary Audits: PMA companies outside these criteria are not legally obliged to be audited, but many conduct voluntary annual audits for good governance and to provide assurance to lenders and shareholders.

• Deadline: The audited financial statements must be prepared within 6 months after the end of the company’s fiscal year.

• Auditor Qualifications: The audit must be conducted by a licensed public accountant registered with the Indonesian Ministry of Finance.

• Scope: The audit covers the company’s financial statements, including the balance sheet, income statement, cash flow statement, and notes to the financial statements.

• Purpose:

  • To ensure compliance with Indonesian Financial Accounting Standards (PSAK)
  • To provide assurance to stakeholders about the company’s financial position
  • To fulfill regulatory requirements for tax reporting and other statutory obligations

• Exceptions: PMA companies with total assets and annual turnover below the Rp 50 billion threshold — and which fall outside the other Article 68 categories — are exempt from the statutory audit requirement. It’s advisable to consult with a professional or refer to the latest regulations to confirm your company’s status.

• Additional Audits: Some industries or specific circumstances may require more frequent or specialized audits. Always check the regulations specific to your business sector.

• Preparation: It’s recommended to maintain proper bookkeeping and financial records throughout the year to facilitate a smooth audit process.

Remember that where an audit is required, it is an annual obligation — and maintaining accurate and up-to-date financial records should be an ongoing process throughout the year regardless.

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