Determinant factors on the disclosure level of local government’s financial statements in Indonesia
-
DOIhttp://dx.doi.org/10.21511/pmf.11(1).2022.01
-
Article InfoVolume 11 2022, Issue #1, pp. 1-9
- Cited by
- 668 Views
-
204 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
Financial reports are required from both the federal and municipal governments to demonstrate and improve governance and raise openness and accountability of government financial management. This study aims to determine how much mandatory disclosure in local government financial reports can be increased by adding variables such as the number of members in the legislative body, debt, and population, as well as a control variable – the age of the municipal authorities. The population of this study comprised all Local Government Financial Statements (LGFS) in Indonesia and the Supreme Audit Agency’s financial statement auditing requirements as of 2018. The paper adopted a purposive sample technique; 248 local governments in Indonesia were sampled. This study tested hypotheses using multiple regression analysis with the SPSS Version 25 application. The findings show that the number of members in the legislative body, debt, and total population do not affect the level of LGFS disclosure; however, the level of welfare does. This study should provide information that can help increase LGFS disclosure in a way that is valuable for local governments. Utilization of information technology in meeting social demands more efficiently and effectively is one of the strategies for local governments in carrying out financial statement disclosures.
- Keywords
-
JEL Classification (Paper profile tab)D72, H75, M41
-
References37
-
Tables4
-
Figures0
-
- Table 1. Research sample criteria
- Table 2. Research variables measurement
- Table 3. Descriptive statistics
- Table 4. Regression analysis
-
- Ahmed, K. (1995). The effect of corporate characteristics on disclosure quality in corporate annual reports: a meta-analysis (Working Paper). New Zealand.
- Aljifri, K., Alzarouni, A., Ng, C., & Tahir, M. I. (2014). The association between firm characteristics and corporate financial disclosures: evidence from UAE companies. The International Journal of Business and Finance Research, 8(2), 101-124.
- Arifin, J. (2014). Isomorphic Pressures Influencing the Level of Mandatory Disclosure within Financial Statements of Indonesian Local Governments. Curtin University.
- Arifin, J. (2018). Potential factors to enhance the level of disclosure within financial statements of Indonesian provincial governments. Journal of Accounting and Finance, 20(2), 89-98.
- Arifin, J., Tower, G., & Porter, S. (2015). Financial reporting compliance in Indonesia local government: mimitic pressure dominates. Jurnal Akuntansi dan Auditing Indonesia, 19(1), 68-68.
- Bakar, N. (2013). Disclosure of accountability information in the public sector annual report: the case of Malaysian federal statutory bodies. University of Malaya, Kuala Lumpur.
- Botosan, C. A. (1997). Disclosure level and the cost of equity capital. The Accounting Review, 72(3), 323-349.
- Dewata, E., Jauhari, H., Aprianti, S., & Hijria, E. N. (2018). The effects of local government characteristics and audit opinion on the performance of districts and city governments in Indonesia. Journal of Accounting and Business Dynamics, 5(2), 151-162.
- Gilligan, T. W., & Matsusaka, J. G. (2001). Fiscal policy, legislature size, and political parties: evidence from state and local governments in the first half of the 20th century. National Tax Journal, 54(1), 57-82.
- Giroux, G., & McLelland, A. J. (2003). Governance structures and accounting at large municipalities. Journal of Accounting and Public Policy, 22(3), 203-230.
- Hendriyani, R., & Tahar, A. (2015). Analisis faktor-faktor yang mempengaruhi tingkat pengungkapan keuangan pemerintah provinsi di Indonesia. Journal of Chemical Information and Modeling, 22(1), 25-33. (In Indonesian).
- Hilmi, A. Z., & Martani, D. (2012). Analisis faktor-faktor yang mempengaruhi tingkat pengungkapan laporan keuangan pemerintah provinsi. Simposium Nasional Akuntansi, XV, 1-26. (In Indonesian).
- Ingram, R. W. (1984). Economic incentives and the choice of state government accounting practices. Journal of Accounting Research, 22(1), 126-144.
- Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360.
- Kotler, P., & Keller, L. K. (2000). Marketing management (11th ed.). Jakarta: Indeks.
- Laupe, S., Saleh, F. M., Ridwan, & Mattulada, A. (2018). Factors influencing the financial disclosure of local governments in Indonesia. Academy of Accounting and Financial Studies Journal, 22(3), 1-9.
- Lesmana, S. I. (2010). Pengaruh karakteristik pemerintah daerah terhadap tingkat pengungkapan wajib di Indonesia (Thesis). Universitas Sebelas Maret Surakarta. (In Indonesian).
- Liestiani, A. (2008). Pengungkapan lkpd kabupaten/kota di indonesia untuk tahun anggaran 2006 (Thesis). Universitas Indonesia. (In Indonesian).
- Marsella, C., & Aswar, K. (2019). An Investigation of Financial Statement Disclosure in Local Government Financial Statements. International Journal of Business and Economic Affairs, 4(6), 273-281.
- Martani, D., Nastiti, D., & Wicaksono, P. T. (2014). Disclosure of non-financial information about public services on the official website of local governments in Indonesia. Journal of Theoretical and Applied Information Technology, 66(2), 500-512.
- Murdayanti, Y., Gurendrawati, E., & Iyabu, Y. F. (2014). Analysis of factors affecting level of disclosure in regional sector’s financial statements. Review of Integrative Business & Economics Research, 4(1), 253-261.
- Naim, A., & Rakhman, F. (2000). Analisis hubungan antara kelengkapan pengungkapan laporan keuangan dengan struktur modal dan tipe kepemilikan perusahaan. Jurnal Ekonomi dan Bisnis, 15, 70-82. (In Indonesian).
- Nainggolan, A. T., & Purwanti, D. (2016). Analisis faktor-faktor yang mempengaruhi transparansi informasi keuangan daerah via website. Proceding Simposium Nasional Akuntansi (SNA) 19. Lampung. (In Indonesian).
- Naopal, F., Rahayu, S., & Yudowati, S. P. (2017). Pengaruh Karakteristik Daerah, Jumlah Penduduk, Temuan Audit dan Opini Audit Terhadap Pengungkapan Laporan Keuangan Pemerintah Daerah. ASSETS, 7(1), 56-68. (In Indonesian).
- Nor, W., Hudaya, M., & Novriyandana, R. (2019). Financial statements disclosure on Indonesian local government websites. Asian Journal of Accounting Research, 4(1), 112-128.
- Nurlianto, O., & Aswar, K. (2020). A conceptual framework on the financial statement disclosure in Indonesia local government. Journal of Economics and Behavioral Studies, 12(3(J)), 65-59.
- Patrick, P. A. (2007). The determinants of organizational innovativeness: the adoption of GASB 34 in Pennsylvania local government (Thesis). The Pennsylvanian State University.
- Richardson, A. J., & Welker, M. (2001). Social disclosure, financial disclosure and the cost of equity capital. Accounting, Organizations and Society, 26(7-8), 597-616.
- Robbins, W. A., & Austin, K. R. (1986). Disclosure quality in governmental financial reports: an assessment of the appropriateness of a compound measure. Journal of Accounting Research, 24(2), 412-421.
- Stigler, G. J. (1976). The size of legislature. The Journal of Legal Studies, 5(1), 17-34.
- Styles, A. K., & Tennyson, M. (2007). The accessibility of financial reporting of us municipalities on the internet. Journal of Public Budgeting, Accounting & Financial Management, 19(1), 56-92.
- Suhardjanto, D., & Yulianingtyas, R. R. (2011). Pengaruh karakteristik pemerintah daerah terhadap kepatuhan pengungkapan wajib dalam laporan keuangan pemerintah daerah. Jurnal Akuntansi & Auditing, 8(1), 30-42. (In Indonesian).
- Suwardjono. (2006). Teori akuntansi: perekayasaan pelaporan keuangan. Yogyakarta: BPFE Yogyakarta.
- Tricker, R. I. (1984). Corporate practices, procedures and power in British companies and their board of directors. Grower, UK: Economist Book.
- Verawaty. (2015). Determinan aksesibilitas internet financial reporting melalui e-government pemerintah derah di indonesia. Simposium Nasional Akuntansi (pp. 1-25).
- Waliyyani, G. M., & Mahmud, A. (2015). Pengaruh karakteristik pemerintah terhadap tingkat pengungkapan laporan keuangan pemerintah daerah di Indonesia. Accounting Analysis Journal, 4(2), 1-8. (In Indonesian).
- Zimmerman, J. L. (1977). The municipal accounting maze: an analysis of political incentives. Journal of Accounting Research, 15, 107-144.