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The audit committee is often regarded as a formality, yet in many sectors it is mandatory and its duties cover matters very close to internal audit: reviewing the work of internal auditors and making sure the Board of Directors follows up on their findings. The rules differ by sector, and some have changed in the past two years.
This article compares the legal basis, composition, duties, and relationship of the audit committee with internal audit in public companies, SOEs (BUMN), commercial banks, and BPR (rural banks), based on the text of the regulations. References checked as of 23 October 2026. For audit committee coordination in universities, read the article coordination of the SPI (internal oversight unit), audit committee, MWA, and BPK (Audit Board).
What Is an Audit Committee?
OJK Regulation 55/POJK.04/2015 Article 1 point 1 defines the audit committee as a committee formed by and accountable to the Board of Commissioners to help carry out the duties and functions of the Board of Commissioners. The same pattern applies in other sectors: the audit committee is a supporting organ of the Board of Commissioners or Supervisory Board, not part of management.
What Is the Legal Basis of the Audit Committee by Sector?
| Sector | Legal basis | Status notes |
|---|---|---|
| Issuers and public companies | OJK Regulation 55/POJK.04/2015 Article 2: an audit committee is mandatory. Articles 3 to 21 regulate composition, duties, charter, meetings, and reporting | In force according to the BPK (Audit Board) database. We did not find its replacement, but the OJK database cannot be searched directly |
| State-Owned Enterprises | Law 19/2003 Article 70 as amended by Law 16/2025; Government Regulation 38/2026 Article 58 (Persero) and Article 90 (Perum); details in PER-3/MBU/03/2023 Articles 132 to 137 | Further details are delegated to BP BUMN regulations that we have not found. See the article on SOE SPI (internal oversight units) |
| Commercial banks | OJK Regulation 17/2023 Articles 63 and 64 (composition) and Article 71 (duties) | OJK Regulation 55/POJK.03/2016 was revoked by OJK Regulation 17/2023 Article 142 |
| BPR (rural banks) and BPRS (sharia rural banks) | OJK Regulation 9/2024 Articles 59, 60, and 64 | Mandatory for BPR (rural banks) with core capital of Rp50 billion or more. Below that, the function is carried out by the Board of Commissioners |
| Danantara | Government Regulation 10/2025 Article 9: the Supervisory Board is assisted by an audit committee, an ethics committee, and a remuneration and human resources committee | Government Regulation 19/2026 amends Government Regulation 10/2025 but does not change this article |
How Is the Audit Committee Composed?
| Aspect | Issuers (OJK Regulation 55/2015) | SOEs (PER-3/2023) | Commercial banks (OJK Regulation 17/2023) |
|---|---|---|---|
| Number of members | At least 3 people from independent commissioners and outside parties | No minimum number in the articles referenced | At least 3 people under the structure of Article 64 paragraph (1) |
| Chair | Independent commissioner | A member of the Board of Commissioners or Supervisory Board who is independent or can act independently | Independent commissioner |
| Expertise | At least 1 member with an accounting and finance background | One independent member or an accounting or finance expert, and one member who understands the SOE business | One independent party who is a finance or accounting expert and one legal or banking expert |
| Independency | Not an insider of a public accounting firm, consultant, or appraiser within the past 6 months; holds no shares; not affiliated with commissioners, directors, or major shareholders | Non-board members at most 2 people except under certain conditions | All members are independent. Members of the Board of Directors are prohibited from being members |
| Term of service | No longer than the term of the Board of Commissioners, may be re-elected for one subsequent period | Non-board members for a maximum of 3 years, may be reappointed for a maximum of 2 years | Not described in this article |
What Are the Duties of the Audit Committee?
For issuers, Article 10 of OJK Regulation 55/2015 sets the minimum duties: reviewing financial information; reviewing compliance with regulations; providing an independent opinion when management and the accountant disagree; recommending the appointment of the accountant to the Board of Commissioners; reviewing the conduct of examinations by internal auditors and overseeing the Board of Directors' follow-up on internal audit findings; reviewing risk management if there is no risk monitoring function; reviewing complaints related to accounting and financial reporting; and maintaining confidentiality.
For commercial banks, Article 71 of OJK Regulation 17/2023 requires the audit committee to monitor and evaluate audit planning and execution as well as follow-up monitoring of audit results, at a minimum covering the duties of the internal audit unit, the conformity of financial statements with accounting standards, and the Board of Directors' follow-up on findings from internal audit, external auditors, and OJK supervision. For SOEs, PER-3 Article 134 and PER-2 Article 59 contain similar duties, plus recommendations on the audit plan, budget, and performance of the SPI (internal oversight unit).
What Is the Relationship between the Audit Committee and Internal Audit?
| Matter | Issuers | State-Owned Enterprises |
|---|---|---|
| Appointment and dismissal of the head of internal audit | The president director with the approval of the Board of Commissioners (OJK Regulation 56/POJK.04/2015 Article 5). The audit committee is not named as an approving party | The president director with the approval of the Board of Commissioners or Supervisory Board (PER-2 Article 29) |
| Internal audit charter | Determined by the Board of Directors with the approval of the Board of Commissioners (Article 10) | The SPI (internal oversight unit) must have a charter (PER-2 Article 29) |
| Role of the committee | Reviews the conduct of examinations and monitors the Board of Directors' follow-up. The internal audit unit works with the audit committee (Article 7 letter g) | Recommends the SPI's audit plan, scope, and budget, and evaluates the SPI's reports and performance (PER-2 Article 59) |
| Access | The committee communicates directly with the party that carries out the internal audit function (Article 11) | The committee ensures that the SPI communicates with the Board of Directors, the board, and external auditors |
An important difference: at issuers, approval of the charter and of the head of internal audit rests with the Board of Commissioners, not the audit committee, although the committee reviews the results of the work. In banking, the details of the bank's internal audit function are regulated separately, and for BPR (rural banks) they are discussed in the article BPR internal audit.
How Do Issuer Audit Committee Meetings, Charters, and Reporting Work?
- Charter: must be held and published on the issuer's website (Article 12).
- Meetings: held periodically at least once every three months (Article 13), with a quorum of more than half of the members (Article 14), and the minutes submitted to the Board of Commissioners (Article 16).
- Reports: to the Board of Commissioners for every assignment (Article 17), and an annual report on committee activities disclosed in the issuer's annual report (Article 18).
- Information to OJK: the appointment and dismissal of members must be submitted within 2 working days at the latest (Article 19).
The public company governance guidelines (OJK Regulation 21/POJK.04/2015) use the comply-or-explain principle: public companies apply the guidelines or explain why they do not. The audit committee provisions in OJK Regulation 55 are mandatory.
How Can the Audit Committee and Internal Audit Work More Effectively?
The following steps are an example of a working approach, not a regulatory provision.
- Prepare a joint annual calendar. Schedule audit committee meetings with the head of internal audit in line with the minimum frequency in the rules, and bring the risk-based audit plan to the first meeting of the year. The concept of the audit plan is discussed in the article audit planning.
- Report the follow-up status, not only the findings. The issuer rules make oversight of the Board of Directors' follow-up a duty of the committee, so the list of recommendations and their status needs to be ready at every meeting. See follow-up on internal audit findings.
- Separate approval from review. Make sure the documents record who approves the charter and the appointment of the head of internal audit, and who reviews the results of the work.
- Document direct access. Record meetings between the committee and the head of internal audit without management present as evidence of independence.
- Evaluate the charter periodically and make sure the latest version is available in line with publication obligations.
How Does Internal Audit Software Help?
Audithink does not replace the audit committee, does not prepare meeting minutes, and does not submit reports to OJK or BP BUMN. Audithink is internal audit management software with six main features: risk assessment, audit planning, work program templates, notifications, follow-up monitoring, and automated reports. These features help with the materials an audit committee usually asks for: a risk-based audit plan, work program status, deadlines, and recorded follow-up on recommendations. An overview for banking is in the article Audithink for banking.
FAQ on the Audit Committee
Who Is Required to Have an Audit Committee?
Issuers and public companies (OJK Regulation 55/POJK.04/2015), SOEs (BUMN) (SOE Law Article 70), commercial banks (OJK Regulation 17/2023), and BPR (rural banks) with core capital of Rp50 billion or more (OJK Regulation 9/2024).
What Is the Minimum Number of Audit Committee Members for an Issuer?
At least 3 people drawn from independent commissioners and parties from outside the issuer, chaired by an independent commissioner, with at least one member with an accounting and finance background (OJK Regulation 55/POJK.04/2015 Articles 4, 5, and 7).
How Often Does an Issuer's Audit Committee Meet?
At least once every three months, with a quorum of more than half of the members (Articles 13 and 14).
Does the Audit Committee Approve the Issuer's Internal Audit Charter?
No, it is not mentioned. OJK Regulation 56/POJK.04/2015 states that the charter is determined by the Board of Directors after approval by the Board of Commissioners. The audit committee reviews the conduct of internal audit examinations and oversees the Board of Directors' follow-up.
May a Member of the Board of Directors Be a Member of a Bank's Audit Committee?
No. OJK Regulation 17/2023 Article 64 prohibits members of the Board of Directors from being members of a commercial bank's audit committee.
Have the SOE Audit Committee Rules Been Updated?
Law 16/2025 and Government Regulation 38/2026 require an audit committee and leave the details to BP BUMN regulations. We have not found that regulation as of 23 October 2026, so the details are available in PER-3/MBU/03/2023.
Conclusion
An audit committee is effective when it acts as a quality checker of internal audit, not merely a recipient of reports. The rules give a clear basis: review the work of internal auditors, oversee the Board of Directors' follow-up, and safeguard independent access. The details of composition and meetings differ by sector, so start from the legal basis for your sector.
If your internal audit team wants to prepare materials for committee meetings more neatly, schedule an Audithink demo.
