A Comparative Study of Accounting in Japan and Indonesia

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The Puorpose of this research was to compare Japan and Indonesia in terms of legal framework of accounting/disclosue and accounting/tax practice.Indonesia is now taking the policy of "opening the door" by facilitating de-regulation. Foreign investment into Indonesia is drastically increasing during these few years. Some Indonesian companies are pursuing internationalization.For example, Indosat is now listed to the New York Stock Exchange and another company is going to be listed to Tokyo Stock Exchange soon.3) Tax regulations, accounting standards and company law were reformed in 1994 and 1995. Indonesian accounting standards are now at an international level.This shows an interesting contrast to Japanese accounting standards, which is still quite different from the International Accounting Standards (IAS).As indicated above, Indonesian accounting is oriented towards internationalization/liberalization, and its accounting standards have incorporated IAS.In practice however, great number of companies cannot comply with written accounting standards. Taking into account Indonesian cultural background, we may be able to indicate that Indonesian companies do not have strong motivation to rigorously follow these regulations.If Indonesia truly intends to become international, it seems to be necessary that it try to change the traditional accounting values in order to reconcile accounting practice with its accounting standards.This is not an easy task to cope with.It is thus imperative to continue various efforts to improve accounting education and the quality of certified public accountants, and to change the orientation of the multinational corporations.This also poses a problem to Japanese comanies operating in Indonesia. They are expected to comply with accounting standards and tax regulations of Indonesia so that they are respected in the long run.