Indonesia's Public Accounting Institution (IAPI) is preparing to build a sustainable assurance system with the goal of improving the quality and credibility of sustainability reports. This announcement was made during a press conference held in Jakarta, where Sembrana Bahari, the chairman of IAPI, emphasized the importance of this system in light of the global shift towards sustainability reporting related to environmental, social, and governance (ESG) factors.
Bahari explained that investors are increasingly looking for reports that go beyond financial performance, indicating that reports should reflect companies' commitments to labor and environmental laws. This trend aims to build greater trust among stakeholders.
Event Details
In the context of developing the sustainable assurance system, IAPI praised the steps taken by the Indonesian Financial Services Authority (OJK) to enhance the regulatory framework for sustainable finance through a bill that mandates financial companies to prepare sustainability reports according to specific standards.
The bill requires companies to prepare sustainability reports that align with Sustainability Reporting Standards (PSPK), reflecting the importance of coordination between financial reporting and sustainability reporting.
Background & Context
Historically, Indonesia has seen a growing interest in sustainability, with companies becoming obligated to report on their environmental and social impacts. This interest aligns with global trends focusing on transparency and accountability in business practices.
In recent years, a range of international standards has been introduced to improve the quality of sustainability reports, reflecting Indonesia's commitment to global standards.
Impact & Consequences
The development of a sustainable assurance system is considered a significant step towards improving transparency in the Indonesian market, as it will help companies manage risks more effectively and comply with regulations. Furthermore, this system will enhance investor confidence in the market.
Additionally, the adoption of international standards such as ISSA 5000 and IESSA will contribute to raising the level of accounting practices in Indonesia, making them more aligned with global standards.
Regional Significance
As Arab countries strive to enhance their economic sustainability, they can benefit from Indonesia's experiences in developing sustainable assurance systems. Strengthening transparency in corporate reporting can positively impact investment attraction.
Moreover, cooperation between Arab nations and Indonesia in this field could open new avenues for improving environmental and social practices in the region.
In conclusion, the development of a sustainable assurance system in Indonesia represents an important step towards enhancing transparency and credibility in corporate reporting, contributing to building greater trust between investors and stakeholders.