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OJK Regulations

OJK’s New Mandate on Financial Reporting: What Banks Need to Know

11/8/2024
OJK Regulations

Read Time: 5 minutes

The Financial Services Authority (OJK) issued Regulation 15/2024 on October 9, 2024, to enhance transparency and accuracy in financial reporting for Indonesian banks. This mandate requires banks to establish and maintain robust internal controls that ensure accurate, transparent, and compliant financial disclosures. With fines of up to Rp 50 billion for non-compliance, banks must quickly adapt to these new standards before the first quarter of 2025.

What Banks Need to Anticipate

The regulation outlines several key requirements that banks must follow, among these are:

  • Internal Control Effectiveness: Banks are required to establish and ensure the implementation of internal control policies and procedures for their financial reporting processes, addressing management override, unauthorized transactions, as well as transaction fairness and accuracy.
  • Establish Dedicated Work Units: Banks must appoint specialized work units or executive officers responsible for preventing fraud and manipulation during financial disclosures.
  • Clarify the Roles and Responsibilities of Bank Stakeholders: The Board of Directors (BoD), Board of Commissioners (BoC), bank audit committee, controlling shareholders, and affiliated parties now have defined duties in overseeing compliance. Banks must submit internal control reports annually to the OJK as part of financial reporting, including any significant weaknesses or conditions that could threaten the bank’s continuity.

For a comprehensive overview, access the full regulation [Here].

How Crowe Can Help

Implementing and testing internal controls can be challenging for banks due to tight deadlines and extensive OJK requirements. To meet these objectives, banks may find value in partnering with experts who can guide and accelerate the establishment of effective internal control policies, procedures, and information systems.

With more than 15 years of experience in Internal Control over Financial Reporting (ICFR), Crowe has assisted organizations build cost-effective compliance to ensure reasonable assurance over financial reports and disclosures.

Source: OJK, Crowe Indonesia

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