Program Studi Akuntansi Universitas Katolik Parahyangan
Parahyangan Catholic University’s Accounting Study Program won a Competition Grant (Hibah Kompetisi) in the Ministry of Education and Culture’s Merdeka Campus Competition Program in 2021. With regard to the achievement of this competition grant, Parahyangan Catholic University’s Accounting Study Program organized a series of activities, one of which was the debriefing and mentoring of the Accounting Competition Team by inviting accounting alumni and practitioners to deliver the materials for around 35 students of the Accounting Competition Team selected from the classes of 2018 and 2019.
The students gained a variety of knowledge experiences with current topics relevant to the competition and the future of the competition team in the workplace. On Friday, August 13, 2021, an online briefing was held by inviting an alumnus of the Accounting class of 2003, namely Mr. Ghany Pamungkas, SE. Ak., CA., CPA. He started his career at PwC Indonesia after graduation until 2014, continued his career at KPMG Singapore until 2015, and is currently at PwC New York in the position of Senior Manager.
On this occasion, he presented the development of the SEC Amended Loan Rule, which was very interesting and provided knowledge for the Accounting competition team of the Faculty of Economics, Parahyangan Catholic University. The Amended Loan Rule (ALR) is a rule issued by the Security Exchange Commission (SEC) with respect to auditor independence in connection with certain loans or debtor-creditor relationships to ensure auditor objectivity and impartiality. The ALR became effective on October 3, 2019 and replaces the previous rules. The ALR imposes a prohibition on certain debtor-creditor relationships between companies or covered persons and audit clients, employees of audit clients, or entities that are not yet affiliates but are beneficial owners of SEC audit clients with the ability to exercise significant influence over the audited entity (a Loan Only Restricted Entity, or LORE). The scope is within SEC audit clients and all their affiliates, with the exception of fund audit clients, where “sister funds” are excluded. Also includes beneficial owners of entities that may not be SEC audit clients themselves but are affiliates of SEC audit clients.
There are three things that can be noted to identify LORE. First, LORE focuses the analysis only on beneficial ownership. Second, LORE replaces the 10% bright-line test with the significant influence test. Third, LORE identifies beneficial owners of equity securities of audit clients (or their affiliates) using the “known through reasonable inquiry” standard.
There are several key elements of ALR. First, the determination of affiliation—Loan Only Restricted Entities, beneficial owners—was known through reasonable inquiry. ALR compliance is a shared responsibility by audit firms and clients. Clients and engagement teams are held to the “known through reasonable inquiry” standard when identifying LORE. Audit clients must have adequate procedures in place to meet this standard, and these procedures must be understood by the engagement team. This activity was closed with a question-and-answer session and a message from the speaker to the participants to speak up and have good networking skills.