Appointment Of Auditor Resolution Template for Indonesia
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What is a Appointment Of Auditor Resolution?
The Appointment of Auditor Resolution is a crucial corporate governance document required under Indonesian law for companies appointing external auditors. It is typically prepared annually or when there is a change in auditors, in accordance with Law No. 40 of 2007 on Limited Liability Companies and OJK regulations. The document serves as official record of the appointment, capturing key details such as the audit firm's details, scope of services, term of appointment, and remuneration framework. For public companies, additional regulatory requirements must be addressed in the resolution, including independence declarations and specific OJK compliance statements. The resolution also typically includes authorizations for executing related documents and notifications to relevant authorities.
About the Appointment Of Auditor Resolution
An Appointment of Auditor Resolution is a formal corporate document that legally authorizes your company to engage external auditors in Indonesia. This resolution is required under Indonesian corporate law and serves as the official record of your board's or shareholders' decision to appoint a specific audit firm to conduct your annual financial audit.
When do you need this document?
You need an Appointment of Auditor Resolution whenever your company appoints or reappoints external auditors. This typically occurs during your Annual General Meeting (AGM) when shareholders approve the auditor for the upcoming financial year. Public companies listed on the Indonesia Stock Exchange must prepare this resolution annually as part of their regulatory compliance obligations. You'll also need this document when changing audit firms, as Indonesian regulations require proper documentation of auditor transitions. Small and medium enterprises may need this resolution if they voluntarily engage external auditors or if required by loan agreements with financial institutions.
Key legal considerations
Your resolution must clearly specify the audit firm's full legal name, registration details, and IAPI (Indonesian Institute of Certified Public Accountants) membership status. The document should outline the scope of audit services, including whether it covers statutory audits, tax compliance, or additional advisory services. Pay careful attention to the term of appointment, as Indonesian regulations typically limit auditor tenures to prevent conflicts of interest. The resolution must include proper authorization for company officers to execute the audit engagement letter and related agreements. For public companies, ensure the resolution addresses auditor independence requirements and includes necessary declarations about the audit firm's eligibility under OJK regulations.
Legal requirements in Indonesia
Under Law No. 40 of 2007 on Limited Liability Companies, your resolution must be properly authorized by the appropriate corporate body - either the board of directors or shareholders depending on your company's articles of association. Public companies must comply with additional OJK regulations, including specific requirements for auditor rotation every five years for the same audit partner. The resolution should reference compliance with Law No. 5 of 2011 on Public Accountants, ensuring the appointed firm meets professional qualification standards. Your document must be prepared in Bahasa Indonesia and properly notarized if required by your company's constitution. The resolution should authorize notification to relevant authorities, including OJK for public companies, and ensure compliance with Indonesian Financial Accounting Standards (PSAK) throughout the audit engagement.
GOVERNING LAW
Applicable law
This Appointment Of Auditor Resolution is drafted to comply with Indonesia law. Key legislation includes:
Law No. 5 of 2011 on Public Accountants: Regulates the public accounting profession in Indonesia, including qualifications, rights, and obligations of public accountants and audit firms
OJK Regulation No. 13/POJK.03/2017: Regulations on the use of public accountant services and audit firms, including requirements for appointment and rotation of auditors
Indonesian Financial Accounting Standards (PSAK): Professional standards that auditors must comply with when conducting audits, which affect the scope and requirements of the audit engagement
Minister of Finance Regulation No. 17/PMK.01/2008: Specific regulations regarding public accountant services, including independence requirements and audit partner rotation rules
Indonesian Institute of Certified Public Accountants (IAPI) Regulations: Professional standards and ethical requirements that govern the conduct of audit professionals in Indonesia
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