An Indonesian subsidiary may need audit work for foreign group reporting when its financial information is included in its parent’s consolidated financial statements, and the group auditor requires audit evidence from the Indonesian operations. This can apply even when the subsidiary is not independently required to undergo a statutory audit in Indonesia.
Need to determine what audit work your Indonesian subsidiary requires for group reporting? Contact MAP Resources Indonesia at info@mapresourcesindonesia.com
Indonesia’s SA 600, the auditing standard governing audits of group financial statements, applies to group audits for periods beginning on or after December 31, 2025, including where component auditors are involved. It is based on the international ISA 600 standard.
Does the Indonesian Subsidiary Need a Full Audit?
Not necessarily. SA 600 applies a risk-based approach under which the group auditor identifies and assesses risks of material misstatement in the group financial statements and determines the audit work needed in response.
The work in Indonesia may cover the subsidiary’s financial information broadly or focus on transactions, balances, disclosures, or identified risks. If an Indonesian auditor participates as a component auditor, the group auditor remains responsible for the group audit and must be sufficiently involved in that auditor’s work, including through direction, supervision, review, and communication.
Can an Indonesian Statutory Audit Satisfy the Group Auditor?
Where the Indonesian subsidiary already undergoes a statutory audit, work performed during that audit may provide evidence that can be used for the group audit. This does not mean that the statutory audit will necessarily cover everything the group auditor requires.
The group auditor may require additional procedures because of risks identified at group level, different materiality considerations, or the financial information required for the consolidated financial statements. The foreign parent may therefore need additional work from the Indonesian auditor without commissioning a second full audit.
When Is Separate Audit Work Required for Foreign Group Reporting?
Separate audit work can arise where the Indonesian subsidiary does not require a statutory audit, but the group auditor needs evidence from its financial information. In that situation, the requirement comes from the group audit rather than Indonesia’s statutory audit rules.
Align your Indonesian subsidiary’s audit with your group reporting requirements. Contact MAP Resources Indonesia at info@mapresourcesindonesia.com
The foreign parent may therefore need to commission audit procedures in Indonesia solely for group reporting purposes, with the scope determined by the evidence required for the group financial statements.
Align Your Indonesian Audit with Foreign Group Reporting Requirements
MAP Resources Indonesia helps foreign companies determine the audit work required from their Indonesian subsidiaries and align the local engagement with overseas group reporting requirements. Contact us today at info@mapresourcesindonesia.com to arrange a consultation.
