Audit Requirements for PT PMA in Indonesia 2026: When, Who & How Much

When Is an Audit Mandatory?

Not every PT PMA in Indonesia needs a financial audit. The requirement depends on the company's size, sector, and specific characteristics. Understanding when an audit is mandatory helps you plan and budget accordingly.

Mandatory Audit Criteria Under UU 40/2007

Article 68 of the Company Law (UU 40/2007) requires an audit by a public accountant for companies that meet any of the following criteria:

Sector-Specific Mandatory Audit

Practical Assessment for PT PMA in Bali

For most small to medium PT PMA companies in Bali (hospitality, F&B, consulting, tech, tourism), the honest assessment is:

Probably not required if:

• Annual revenue is below IDR 50 billion (approximately USD 3 million)
• Total assets are below IDR 100 billion
• Not in a regulated sector
• Not publicly listed

Definitely required if:

• Revenue exceeds IDR 50 billion
• In banking, insurance, or financial services
• Preparing for IPO
• Court-ordered (e.g., shareholder disputes)

Types of Audit

Statutory Audit (Audit Wajib)

The mandatory annual audit required by law. This is a full-scope audit resulting in an opinion on the financial statements.

Voluntary Audit (Audit Sukarela)

An audit conducted by choice, not legal requirement. Reasons include:

• Bank loan requirements
• Investor due diligence
• Internal governance
• Business partner credibility
• Preparation for future regulatory requirements

Tax Audit (Pemeriksaan Pajak)

Conducted by DJP, not by external auditors. This is a government tax investigation, not a financial statement audit. However, having audited financial statements significantly helps during tax audits.

Special Purpose Audit

Audits for specific purposes such as:

• Due diligence for M&A transactions
• Compliance audits for specific regulations
• Forensic audits for fraud investigation
• Agreed-upon procedures for specific areas

The Audit Process

Phase 1: Planning and Engagement (2-4 weeks)

Phase 2: Fieldwork (4-8 weeks)

The auditor's team visits your office and performs:

Substantive testing:

• Sample testing of sales transactions and revenue recognition
• Verification of bank balances (bank confirmations)
• Accounts receivable confirmations (directly with clients)
• Physical inventory count (if applicable)
• Fixed asset verification
• Review of expense documentation
• Tax compliance testing
• Related party transaction review
• Review of contracts and commitments

Controls testing:

• Evaluate internal controls over financial reporting
• Test authorization and approval procedures
• Review segregation of duties
• Assess IT system controls

Phase 3: Review and Reporting (2-4 weeks)

Phase 4: Delivery

The final deliverables include:

• Audited financial statements with auditor's report
• Management letter with findings and recommendations
• List of adjusting journal entries
• Summary of unadjusted differences (if any)

Audit Opinions

The auditor's opinion indicates the level of confidence in the financial statements:

Goal: Every PT PMA should aim for an unqualified (WTP) opinion. A qualified or adverse opinion can affect bank financing, investor confidence, and regulatory standing.

Choosing an Auditor

Types of Audit Firms in Indonesia

Big 4 Firms

Mid-Tier International Affiliates

Local KAP Firms

Hundreds of local Kantor Akuntan Publik (KAP) operate throughout Indonesia. They range from solo practitioners to mid-size firms with 50+ staff.

Selection Criteria

Cost Comparison

Fee factors:

• Company revenue and asset size
• Number and complexity of transactions
• Number of employees
• Multiple locations or entities
• Related party transaction volume
• Industry-specific requirements
• First-year vs. recurring engagement (first year is usually higher)

Preparing for an Audit

3 Months Before: Planning

1. Select and engage the auditor (or confirm continuing engagement)
2. Agree on timeline and key dates
3. Identify potential issues (accounting policy changes, unusual transactions, provisions)
4. Assign internal team (who will work with auditors)

1 Month Before: Documentation

Prepare the following documentation for auditors:

During Fieldwork: Cooperation

• Provide auditors with a dedicated workspace
• Designate a primary contact person
• Respond to information requests within 24-48 hours
• Be transparent about issues and uncertainties
• Do not alter records after providing them to auditors

Common Audit Findings for PT PMA

Finding 1: Inadequate Transfer Pricing Documentation

Issue: Transactions with related parties (parent company, affiliates) without proper arm's length documentation. Fix: Prepare transfer pricing local file annually.

Finding 2: Unreconciled Tax Accounts

Issue: Tax prepayment and payable balances in the books do not match actual tax filings and payments. Fix: Monthly tax reconciliation (see our bookkeeping guide).

Finding 3: Missing Revenue Cut-Off

Issue: Revenue recognized in the wrong period (December services billed in January, or vice versa). Fix: Implement proper revenue recognition procedures and cut-off analysis.

Finding 4: Unsubstantiated Expense Claims

Issue: Expenses without proper supporting documentation (receipts, invoices, contracts). Fix: Enforce a "no receipt, no reimbursement" policy and maintain organized document archives.

Finding 5: Fixed Asset Discrepancies

Issue: Physical assets do not match the fixed asset register (missing items, disposed but not removed from books). Fix: Annual physical asset verification and register updates.

Audit Timeline

Frequently Asked Questions

How much does a PT PMA audit cost in Indonesia?

Audit costs vary significantly by firm size and company complexity. Local KAP (audit firms): IDR 30-100 million for small to medium PT PMA. Mid-tier international affiliates (BDO, Grant Thornton, RSM): IDR 80-200 million. Big 4 firms (Deloitte, EY, KPMG, PwC): IDR 200-500+ million. The cost depends on revenue size, transaction volume, number of employees, and industry complexity.

Can a PT PMA choose to be audited even if not required?

Yes. Voluntary audits are common for PT PMA companies that want to: secure bank financing (many banks require audited statements for loans above IDR 1 billion), attract investors, demonstrate credibility to business partners, or prepare for future regulatory requirements. A voluntary audit follows the same professional standards as a mandatory one.

What happens if a PT PMA that requires an audit does not get one?

Non-compliance with mandatory audit requirements can result in: DJP rejecting the corporate tax return (SPT Badan), penalties from OJK for regulated entities, shareholder lawsuits (minority shareholders can challenge unaudited financial statements), difficulty obtaining bank loans, and potential issues with business license renewals.

How Bali Zero Can Help

Bali Zero connects PT PMA owners with qualified audit firms and manages the entire process:

• Auditor selection based on your company's size and sector
• Audit preparation through our accounting partners
• Year-round bookkeeping (ensures clean books at year-end)
• Tax compliance to prevent audit issues
• New company formation (IDR 20,000,000) with proper accounting framework from day one

Contact us at info@balizero.com or WhatsApp +62 821 3454 721 for audit and financial reporting support.