Trust in business is built not only through reputation but also through a company’s ability to demonstrate accountability for its transactions, assets, liabilities, decisions, and operational activities. For Foreign Investment Companies (PMA) in Indonesia, the quality of financial records, tax and corporate compliance, internal controls, and readiness for audits and regulatory examinations are important elements of corporate governance and credibility. These challenges become more complex for companies that are part of international business groups, as they require reliable financial information for consolidation, decision-making, and expansion. Therefore, accounting and assurance should be viewed as an infrastructure of trust rather than merely administrative obligations. The proper application of accounting standards, traceable documentation, effective internal controls, transparency, and compliance with reporting requirements can strengthen governance, improve examination readiness, and support sustainable business operations in Indonesia.
Trust in conducting business in Indonesia depends on a company’s ability to provide information that is clear, consistent, and verifiable. For foreign companies establishing or acquiring a Foreign Investment Limited Liability Company (PT PMA), this requirement becomes particularly important because the company must comply with Indonesian requirements while also supporting the reporting needs of its international business group. Financial statements, transaction records, tax documents, asset ownership records, inventory data, ownership structures, and business licenses should therefore be properly maintained, traceable, and supported by adequate documentation. Such readiness is also important when a company undergoes due diligence by a potential investor or buyer, particularly in relation to related-party transactions, tax obligations, asset ownership, inventory accuracy, and the continuity of business licenses.
Indonesia’s Financial Accounting Standards (SAK) framework is strongly aligned with international financial reporting principles. Standards such as PSAK 115 on Revenue from Contracts with Customers, PSAK 109 on Financial Instruments, and PSAK 116 on Leases are based on principles that are aligned with relevant international standards. For private entities, the Financial Accounting Standards for Private Entities (SAK EP), effective from 1 January 2025, provides a simpler reporting framework for entities without significant public accountability. Such alignment can help reduce adjustments when Indonesian financial statements are incorporated into the consolidation process of an international business group.
However, alignment of accounting standards alone is not sufficient. Companies also need to ensure that local financial information can be effectively used by the group finance function. One practical approach is to link local account codes directly with the group reporting structure within the accounting system or Enterprise Resource Planning (ERP) system. Reconciliations between commercial accounting and tax calculations should also be performed systematically to reduce repeated adjustments during the financial closing process. The local closing timetable should be aligned with the group reporting timetable so that consolidation requirements can be met efficiently and consistently. This approach can improve reporting efficiency while reducing classification and reconciliation risks.
From a bookkeeping perspective, companies generally use Bahasa Indonesia and Rupiah as the basis for accounting records and documentation. However, certain companies, including qualifying PT PMA entities, may obtain approval to use another language or currency for bookkeeping purposes in accordance with applicable requirements. This should be considered from the beginning of the financial year because the use of a foreign currency for bookkeeping does not remove the company’s obligations to comply with Indonesian tax and reporting requirements.
Audit readiness should also be established from the beginning rather than when auditors start requesting documents. Under certain conditions, companies are required to have their financial statements audited by a registered public accountant in accordance with applicable regulations. For PT PMA entities that meet the relevant criteria, an audit is not merely an annual exercise but an important part of corporate governance. Indonesian auditing standards under the Standards on Auditing and Assurance Services (SPAP), which are based on the International Standards on Auditing (ISA), also provide a framework that can support coordination with international group auditors. Companies should therefore establish an audit trail through adequate transaction evidence, documented reconciliations, clear approvals, and organized supporting documentation.
In addition to financial reporting, companies need to manage corporate and investment reporting obligations. PT PMA entities should ensure that annual reports, shareholder-related documentation, and corporate records are prepared and maintained in accordance with applicable requirements. From an investment perspective, the Investment Activity Report or Laporan Kegiatan Penanaman Modal (LKPM), submitted through the Online Single Submission (OSS) system, should also be monitored periodically. Information concerning investment realization, employment, production or service activities, and business constraints should be consistent with the company’s actual operations. Good compliance is therefore not only about submitting reports on time, but also about ensuring that the information reported is accurate and consistent.
Transparency also extends to information concerning the Beneficial Owner (BO). Companies should ensure that individuals who ultimately own, control, or benefit economically from the company can be properly identified and that the information is updated when ownership or control changes. Accurate ownership information is particularly important for companies that are part of international business groups because ownership and control structures may need to be explained to regulators, auditors, investors, and business partners.
The reliability of financial information ultimately depends heavily on the quality of internal controls. Excessive dependence on one individual for critical processes such as payments, banking access, taxation, payroll, and supplier data can increase the risk of error or misuse. Companies should therefore establish segregation of duties, authorization limits, maker-checker procedures, and appropriate approval levels. Supplier management should also include approval procedures for new suppliers and changes to master data, supported by periodic reviews to reduce the risk of fictitious suppliers, duplicate invoices, or unauthorized changes to bank accounts.
These controls should be strengthened through anti-bribery and fraud prevention measures. Risks may arise not only from employees and management, but also from third parties such as consultants, agents, and business partners. Companies should therefore establish clear policies covering unofficial payments, gifts, hospitality, conflicts of interest, and relationships with third parties. Third-party due diligence and anti-bribery clauses in contracts can form part of the preventive control framework. At the same time, a safe and independent whistleblowing channel can help management identify potential violations at an earlier stage.
All these obligations should ideally be managed through an integrated compliance calendar. Tax obligations, BPJS Kesehatan and BPJS Ketenagakerjaan contributions, LKPM, Annual Corporate Income Tax Returns, financial statement approvals, corporate reporting, and Beneficial Owner updates should be monitored through a coordinated mechanism. This approach allows compliance to be managed as an ongoing process rather than as a series of deadlines addressed only when they are approaching.
This level of readiness becomes increasingly important when a company faces an audit or regulatory examination. Companies should ensure that business licenses, LKPM reports, tax returns, accounting records, corporate documents, and actual operating conditions present consistent information. Centralized document storage, clearly designated contact persons, and periodic internal compliance reviews can help the company respond to information requests in a structured manner. When an examination takes place, the company should also ensure that the identity and scope of the examination are properly verified and that documents provided to the authorities are appropriately recorded.
Ultimately, trust is not created simply because a company has audited financial statements. Trust is built when financial information is traceable, transactions are supported by adequate evidence, authority is not concentrated in a single individual, ownership is transparent, reporting obligations are fulfilled consistently, and the company is able to explain its information to shareholders and regulators. For PT PMA, these practices also strengthen readiness for group consolidation, audits, regulatory examinations, mergers and acquisitions, and capital expansion. Accounting and assurance should therefore be viewed not merely as administrative functions, but as an infrastructure of trust that strengthens integrity, corporate governance, and sustainable business operations in Indonesia.
