This case discusses Garuda Indonesia’s 2018 financial report which is deemed to be misstated with respect to its revenue account. Despite this, the auditor issued an unqualified opinion. As a public company and national flag carrier of Indonesia, this case attracted a lot of attention from and was scrutinized by many stakeholders. A financial report should contain certain characteristics to it (usually referred to as qualitative characteristics of financial information), so that users can rely on it to help them make business decisions. Two commissioners of Garuda decided that Garuda’s 2018 report did not satisfy the accounting standards, and hence they refused to sign the report.

After receiving high publicity and conducting a thorough investigation, in June 2019, regulators finally announced that Garuda had manipulated its 2018 report and required Garuda to publish a restated financial report. In addition, Garuda was also required to pay a fine. The regulator also imposed sanctions to the auditor for failing to perform the audit process according to the auditing standards. In a sense, this case is yet another example of an accounting scandal and audit failure. Nevertheless, there is always another side of the story, which is expected to be discussed during the class discussion.