Abstract

Indonesia is located along the equator in South East Asia, consisting of approximately 17,500 islands and a population of more than 252 million (Statistics Central Bureau, 2015), which places the country as the fourth most populous in the world. Indonesia became independent when the Republic of Indonesia was established on August 17, 1945. Prior to its sovereignty from the Dutch, Indonesia was colonized by the Portuguese (1512), the British (1685), and the Japanese (1942–1945). The Dutch occupied Indonesia for about 350 years (1595–1945) (Meyer et al., 2009). During Dutch colonization, all important economic activities were managed by the Dutch and the role of the islands’ original inhabitants was limited to small-scale, family-owned businesses. It is not surprising that, prior to its independence, there was no accounting profession or accounting standards or regulations in Indonesia.