Professor Dr. Golrida Karyawati Purba, M.Si, Ak., CA, CSRA, has been officially appointed as a Professor in Accounting at Universitas Pelita Harapan (UPH). The appointment was made on June 28, 2023, based on a decree from the Ministry of Education, Culture, Research, and Technology (Kemendikbudristek) dated March 6, 2023.

In her academic oration titled “The Effectiveness of PSAK 65 as a Principle-Based Accounting Standard,” Prof. Golrida emphasized the critical role of the Indonesian Financial Accounting Standard (PSAK) 65 as a clear and consistent framework. This framework is used to recognize, measure, present, and disclose financial instruments in financial statements. She highlighted the importance of evaluating PSAK 65 in Indonesia, given the urgent need for accounting regulations to promote sound business practices in the country.

“By adopting PSAK 65, it is hoped to ensure that all controlling parties can present consolidated financial statements. This means that the parent company’s consolidated financial statements must include all subsidiaries. PSAK 65 provides general guidance to grant flexibility to accountants in identifying controls,” explained Prof. Golrida.

However, Prof. Golrida further explains that in practice, PSAK 65 tends to have a bias due to the prevalence of family businesses dominating in Indonesia. Research findings indicate that in pyramid-shaped group structures like family businesses, controlling parties have a greater opportunity to conceal their power. They can also exploit controlled companies to engage in tunneling practices (channeling resources out of the company for the benefit of controlling shareholders) and obscure the variations in returns obtained from subsidiary companies. Therefore, principle-based accounting regulations pose significant challenges in identifying controlling parties in countries with characteristics of family businesses.

“It should be acknowledged that expecting significant results in improving business practices in Indonesia solely from PSAK 65, without further efforts, would be unrealistic. Although PSAK 65 provides broader opportunities to identify controlling parties required to prepare consolidated financial statements, implementing PSAK 65 is far more burdensome compared to the previous accounting standard concerning consolidated financial reporting. Up to this point, PSAK 65 has not delivered the expected contributions,” explained Prof. Golrida.

Therefore, she emphasizes the urgent need for a prompt evaluation of PSAK 65, which has been in effect since 2015. Additionally, Prof. Golrida highlights the importance of accountants in Indonesia having the courage to exercise judgment. High-quality judgment will undoubtedly enhance the financial reporting quality of business practices. According to Prof. Golrida, the effectiveness of PSAK 65 in Indonesia ultimately depends on the competence of Indonesian accountants in exercising judgment, relying on strong references and authoritative guidelines. Thus, she underscores that training and competency development, including the courage to exercise judgment, are essential. This is the key to ensuring that accountants can effectively apply PSAK 65.

“I hope that accounting students will further enhance their understanding of the grey areas which will be beneficial in exercising judgment. This will help them to become excellent graduates who are confident in making judgments and enable them to produce sound and transparent financial reporting,” Prof. Golrida conveyed her message.

UPH Dean of the Faculty of Economics and Business (FEB) Dr. Gracia Shinta S. Ugut, M.B.A., Ph.D., appreciated Prof. Golrida’s achievement and stated, “Prof. Golrida is the fourth professor in FEB UPH, and we take great pride in her accomplishment. Her journey was indeed lengthy and not without challenges. Nonetheless, I am proud and grateful to Prof. Golrida for her hard work in attaining the highest academic position. I hope her achievement will serve as an inspiration for other faculty members.”

UPH Rector Dr. (Hon.) Jonathan L. Parapak, M.Eng., Sc., added in his remarks, “We are proud that UPH has now appointed the 23rd professor. We are thankful that more and more faculty members are enthusiastic about advancing the academic field. This achievement reflects UPH’s vision and mission, which is to achieve academic excellence that is grounded on faith in Christ. I hope Prof. Golrida will continue to contribute to educating students and serving the nation’s progress in the field of Accounting in Indonesia.”