For many businesses in Indonesia, preparing for an audit is not easy. Reports show that a large number of companies still struggle with delayed financial reporting and incomplete documentation. These challenges not only slow down the audit process, but can also reduce trust from investors, regulators, and other stakeholders. Below are five of the most common mistakes companies make and practical ways to avoid them.
1. Late Documentation
In Indonesia, delays in end-of-year audited financial reporting remain a recurring concern. During the 2024 reporting cycle, the Indonesia Stock Exchange (IDX/BEI) enforced stricter discipline: 127 listed companies received a written warning for late submissions, 78 companies were fined Rp 150 million each for non-submission or nonpayment, and 68 firms had their trading suspended until they complied with disclosure obligations.
These actions show a clear escalation from administrative delays to financial penalties and trading suspensions — underscoring how seriously regulators now treat reporting lapses and their impact on investor confidence.
To prevent this, companies should prepare documents in real time, align internal deadlines with OJK and IDX schedules, and assign clear responsibility for monitoring submissions. Simple tools such as reminders, progress trackers, or workflow automation can help prevent last-minute delays.
2. Inconsistent Records
Many businesses still face issues where financial statements, invoices, and supporting records do not match. This becomes a challenge during audits because auditors rely on consistent and reliable documentation to draw conclusions. The importance of such reliability is also emphasized in SA 500 on Audit Evidence, which requires auditors to obtain sufficient, relevant, and reliable evidence.
Regular reconciliation is the key to addressing this matter. Finance teams should schedule monthly or quarterly cross-checks across departments to ensure numbers match. Involving multiple units not only improves accuracy, but also builds stronger accountability.
3. Poor Segregation of Duties
When only one person is responsible for authorizing, recording, and handling assets, errors or fraud become more likely. The Audit Board of The Republic of Indonesia (BPK RI) has repeatedly noted weak segregation of duties as a finding in its public-sector audits, showing that this risk is not limited to private companies.
Clear separation of duties is therefore essential. No single individual should control all the critical steps in the financial process. By dividing responsibilities, for example, between recording, approval, and custody, companies can reduce the risk of errors.
4. Misunderstanding of Materiality
Another common mistake is misunderstanding what auditors consider “material.” Some companies spend excessive time on minor details that have little to no impact, while overlooking areas that could significantly affect financial reporting. For example, a company may focus on reconciling small expenses such as office supplies, yet fail to properly review a large revenue contract.
In Indonesia, both PSAK (aligned with IFRS) and OJK disclosure rules emphasize the importance of materiality. However, in practice, committees with less experience often make errors in setting these thresholds.
In this case, management should define clear thresholds for materiality and focus resources on areas that truly impact reports. Consulting with external advisors can also help avoid misjudgments.
5. No Internal Review
Without an internal review, problems often go unnoticed until auditors raise them. In Indonesia, it is common to see audit findings repeated year after year because companies do not follow up on earlier recommendations.
Companies can schedule mock audits, management reviews, or pre-audit walkthroughs to catch issues early. Using internal audit or third-party consultants to flag potential issues before auditors arrive.
Each of these five mistakes can be prevented with the right preparation, and that’s where Moores Rowland takes the lead. Our audit services go beyond checking the numbers. We help businesses identify potential gaps early, strengthen internal controls, and ensure compliance with local and international regulations.
Our services include:
- Statutory audits to ensure compliance with national requirements and regulatory bodies.
- Contractual audits, for example, when financials are needed for transactions, acquisitions, or special engagements.
- IFRS-related services, including adoption support, audits under international or converged standards, and accounting for complex transactions.
- Sector-specific expertise, tailored to your industry’s needs, ensuring audit focus is relevant to your operations.
- Ongoing communication throughout the audit process, so you stay informed at every stage, can ask questions, and make adjustments as needed.
These services help not only with meeting legal and regulatory requirements, but also with improving internal controls, enhancing transparency, and supporting better decision-making throughout the organization.
Stay compliant and confident in every audit. Partner with Moores Rowland Indonesia to prepare smarter and reduce risks. Let’s make your next audit a smoother process, contact us today.
