Development and Future Trends of Financial Accounting in Indonesia

This study aims to find out how the development of financial accounting practices in Indonesia, the development of the accounting profession in Indonesia, and how the future trends of financial accounting practices in Indonesia. The results of the study showed that: (1) Thus far, the development of financial accounting practices in Indonesia was quite slow; (2) The development of the professional accounting organizations of Institute of Indonesia Accountants (IAI) and Institute Public Accountants of Indonesia (IAPI) tend to be slow until now, and (3) The tendency of financial accounting practices for the future in Indonesia is to start sequential entry in the notes of financial statement (disclosures) of reporting practices of Corporate Social Responsibility (CSR), reporting practices of human resource accounting, value added accounting , general price level accounting, ABC accounting, inflation accounting, and behavioural accounting.

Since 1970 until now, accounting practices in Indonesia look still very normative. It means that financial reporting still provides information only to what is needed by the company's main stakeholders such as the owners, the creditors, and the government. Meanwhile, information to other parties is still not well accommodated.

Research Problem
Starting from the research background above can be formulated research problems as follows: 1) How does the financial accounting practices in Indonesia develop since 1945 to the present? 2) How does the professional accountant organization in Indonesia develop since 1960 to the present? 3) What are the future trends of development of financial accounting practices in Indonesia?

Research Objective
Starting from the research background above can be formulated research objectives as follows: 1) To find out the development of financial accounting practices in Indonesia since independence to the present.
2) To find out the development of professional accounting organizations IAI and IAPI in Indonesia from 1960 to the present. 3) To find out the future trend of development of financial accounting practices in Indonesia.

Research Contribution and Target 1.4.1. Research Contribution
The results of this study are expected to provide two (2) main contributions, namely: 1) Operational. It is expected that information can be useful for owners, directors, and practitioners outside the company in utilizing financial accounting maximally in which it is useful for planning, controlling, and decisions making. 2) Science Development. It is expected to contribute to academics and other financial accounting practitioners in developing and utilizing financial accounting optimally.

II. LITERATURE REVIEW 2.1. Financial Accounting
Accounting consists of several main processes. First, it is started from the process of collecting transactions evidence relating to transaction and financial events of the company. Then, it is proceeded with the process of identifying and classifying the accounts that will be recorded. Next, the process of recording in accordance with the accounts associated with transaction and financial events of the company. the last, it is continued by preparing financial statements which are the final product of financial accounting to be submitted to the parties that are related to the company (stake holders) or parties related to the organization/institution whose financial statements are prepared. According to Weygandt, Kimmel, and Kieso (2018) stating that financial accounting involves the process of identifying, recording, and communicating economic events. Financial accounting was discovered in 687 AD which is during the time of Umar bin Khattab became Khalifah 1 in the middle east. Treasurer Baitul Mal 2 of his kingdom has recorded and used the main basic equation: Assets = Debt + Capital It means that every type of financial transaction or financial event of a company/organization/ government institution must involve 2 two elements of the main equation above. Therefore, if a concise financial accounting report is prepared, it will only contain the three elements in the equation above. In fact, if it is described in detail of the existed three elements in the equation, it will show sub-elements which are numerous and even different for each type of company, organization, and government institution. The final result of the financial accounting process is a report called a Financial Statement. There are 2 main components of financial statements, namely: the balance sheet and the profit and loss statement.
The balance sheet consists of 3 main sub elements, namely; Assets, debt, and capital/equity. Assets consist of the following elements: cash, accounts receivable, office supplies, inventory, prepaid insurance and prepaid rent, land, buildings, equipment, home furniture and appliances. Meanwhile, debt consists of account payable, shortterm bank debt, and long-term bank debt, and other debts. Capital/equity consists of owner's paid-in capital and retained earnings or not-shared earnings.
Calculation or statement of profit and loss consists of 4 main elements, namely: volume of sales or revenue, cost of goods sold, costs, and earning. Volume of ales represents gross income as a result of selling merchandise or goods produced from an industrial company, while the results of service sales are called revenue. Cost of goods sold is the purchase price of goods to be sold or the cost of production of goods to be sold to industrial companies producing their own goods. Costs are all operational costs incurred consisting of marketing costs and  Vol.10, No.16, 2019 87 administrative costs in the office including salaries of office employees.

Decision Making
Making a choice between two or more alternatives is a decision. before a decision is taken by an individual or by a manager in the company, of course, there is a process, and the process is a decision-making process. A decisionmaking model describing how individuals should behave in order to maximize an outcome is called by the "optimizing model". An optimization model of decision making involves 6 steps that should be known by an individual, either explicitly or implicitly when making decisions, namely: confirm the need for a decision, identify decision criteria, allocate grade to those criteria, develop alternatives, evaluate alternatives, and choose the best alternative (Robbins, 2016). The satisficing model is a decision-making model where decision makers choose solutions that are considered "good enough", namely satisfactory and sufficient. According to this model, managers or individuals make decisions by making simple models can reducing the complexity of the problem. The implicit favourite model is a moderate decision-making process where in the decision process, the decision maker implicitly chooses an alternative which is preferred subjectively. In other words, decision makers are irrational and not objective. The intuitive model is a process of decision-making through an unconscious process created from within a filtered experience, or it can also be said to be the result of the power of the sixth sense of decision maker. However, intuition is not free from rational analysis, instead the two are complement each other.
According to an academic view, variables that can influence the development of accounting practices in Indonesia are accounting managers of company, auditors of Public Accounting Firms (KAP), auditors of Supreme Audit Institution (BPK), Institute of Accountants of Indonesia (IAI), the Institute of Public Accountants of Indonesia (IAPI) , and accounting researcher.

Hypothesis
Starting from the problem, the research framework can be deduced the following hypothesis: 1) The development of financial accounting practices in Indonesia since 1945 to present is quite rapid 2) The development of professional accountant organizations (IAI and IAPI) in Indonesia since 1960 to present tends to be slow.
3) The direction of the development of management accounting practices for the future in Indonesia is the starting point of CSR (Corporate social responsibility) accounting practices, human resource accounting, general price level accounting, inflation accounting, value added accounting, ABC Costing, and behavioural accounting which are all included in the notes to financial statements or disclosure.

Development of Accounting 1945 to 2018
Future Trend of Indonesian Accounting. Starting to enter CALK (Disclosure); (1) Corporate Social Responsibility (2) Accounting for human resources (3) Accounting for general price levels.

III. RESEARCH METHOD 3.1. Research Object
The objects of this study are accounting practitioners in large companies, supervisors or external practitioners, namely auditors of Public Accountant Firm (KAP), auditors of Supreme Audit Institution (BPK), administrators of accountant professional organizations of Institute of Indonesia Chartered Accountants (IAI), administrators of accountant professional organizations of Indonesian Institute of Certified Public Accountants (IAPI), and research academics.

Research Method
The research method used in this study is the survey method, which is collecting data (information) using questionnaires and telephone interviews to accounting practitioners (accounting managers) of large companies and supervisors or executing external practitioners, namely auditors of Public Accountant Firm (KAP), auditors of Supreme Audit Institution (BPK), administrators of accountant professional organizations of Institute of Accountants of Indonesia (IAI), administrators of accountant professional organizations of Institute of Public Accountants of Indonesia (IAPI), and accounting researcher.

Population and Sample
The population of this study was accounting managers in large companies, auditors of KAP, auditors of BPK, central and regional administrators of IAI, central and regional administrators of IAPI, and research academics. The sample method used is purposive sampling method which is by determining the sample evenly against respondents who are relevant to the object of research. The number of samples and respondents are as follows: 1) 100 of managers in large companies, 2) 100 of auditors of KAP, 3) 100 of auditors of BPK, 4) 100 of central and regional administrators of IAI, 5) 100 of central and regional administrators of IAPI, and 6) 100 of accounting researcher

Data Collection Techniques
Data collection techniques for each variable are carried out using a list of questions (questionnaire) with the following details: a. Data through a list of questions to the relevant respondents as a sample of observations. b. Interviewing relevant respondents through telephone directly as sample of observations. c. Taking data from the literature relating to the history of financial accounting in Indonesia.

Data Analysis Method
In this study, a descriptive analysis method was used. It is done by making a direct tabulation on the data of the variables to be analysed, then comparing the percentage of the values and the average of the value. The results of most respondents' answers became the first rank, the answers of the second most respondents became second rank, and so on.

Result
From the results of the survey through questionnaires and interviews via telephone can be presented the results of the study in the form of tables 4.1., and the seventh rank is behavioral accounting showing 13 respondents. Thus, the future trends of financial accounting practices in Indonesia will be completed sequentially included in the notes to the financial statements (disclosures), starting from accounting social responsibility of CSR (corporate social responsibility), human resource accounting, value added accounting, general price level accounting, ABC costing accounting, inflation accounting, and behavioural accounting.

V. CONCLUSIONS AND SUGGESTIONS 5.1. Conclusions
Starting from the problem, the research framework can be deduced the following hypothesis: 1) The development of financial accounting practices in Indonesia since 1945 to present is quite rapid 2) The development of professional accountant organizations (IAI and IAPI) in Indonesia since 1960 to present tends to be slow.
3) The direction of the development of management accounting practices for the future in Indonesia is the starting point of CSR (Corporate social responsibility) accounting practices, human resource accounting, general price level accounting, inflation accounting, value added accounting, ABC Costing, and behavioural accounting 5.2. Suggestions 1) Factors influencing the development of accounting practices in Indonesia are practitioners in large companies that have gone public, professional organizations of IAI and IAPI, auditors of KAP, auditors of BPK, and research academics in accounting field. 2) To accelerate the progress of the future development of accounting practices in Indonesia, there must be a joint forum between accounting practicioners residing in large companies, organizations of practitioners in large companies that have gone public, administrators of professional organizations of IAI and IAPI , auditors of KAP, auditors of BPK, and research academics in the accounting field.