Disclosure level of local government’s financial statements in Indonesia: Role of the internal control system
-
Author(s)Rheny Afriana HanifLink to ORCID Index: https://orcid.org/0000-0003-0651-3862
,
Sem Paulus Silalahi
,
Supriono SuprionoLink to ORCID Index: https://orcid.org/0000-0002-1200-9235
,
Eka HariyaniLink to ORCID Index: https://orcid.org/0000-0003-2905-6289
,
Meilda WigunaLink to ORCID Index: https://orcid.org/0000-0001-8313-7501
-
DOIhttp://dx.doi.org/10.21511/imfi.20(3).2023.02
-
Article InfoVolume 20 2023, Issue #3, pp. 13-21
- 366 Views
-
145 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
This study was conducted to examine the factors affecting the level of disclosure of local government financial statements. The study uses the internal control system as a moderating variable. Local government financial reports in Indonesia were the subject of this study’s audit by the Supreme Audit Agency. The number of research samples used was 487 local/city governments in Indonesia for the 2021 period with purposive sampling as a sampling technique. In this study, the Structural Equation Model-Partial Least Square (SEM-PLS) Version 3 data analysis method was employed. Based on the test results, it was found that local government budget expenditures (β = 0.263; p < 0.05) have a significant effect on the level of financial statement disclosure. Meanwhile, financial condition (β = 0.173; p > 0.05) has no significant effect on the level of financial statement disclosures. The internal control system as a moderating variable can moderate the influence of local government budget expenditure (β = 0.263; p < 0.05) on the level of disclosure of financial statements, but cannot moderate the effect of financial condition (β = –0.073; p > 0.05) on the level of disclosure of financial statements. Local governments in Indonesia are expected to be able to further optimize disclosure in accordance with Government Regulations in the future. One of the approaches used by regional governments to execute financial report transparency is the use of information technology to satisfy social expectations more effectively and efficiently.
- Keywords
-
JEL Classification (Paper profile tab)G18, H72, M41, M48
-
References34
-
Tables3
-
Figures0
-
- Table 1. Research sample criteria
- Table 2. Descriptive statistics
- Table 3. Hypothesis testing results
-
- Arifin, J. (2020). Disclosure of financial statements on the website: An empirical study in Indonesian local governments. Review of Integrative Business and Economics Research, 9(2), 174-188.
- Aswar, K., Jumansyah, J., Mulyani, S., & Sumardjo, M. (2021). Moderating effect of internal control system to determinants influencing the financial statement disclosure. Investment Management and Financial Innovations, 18(3), 104-112.
- Aswar, K., Fanany, Y. A., Sumardjo, M., Wiguna, M., & Hariyani, E. (2022). Determinant factors on the disclosure level of local government’s financial statements in Indonesia. Public and Municipal Finance, 11(1), 1-9.
- BPK RI. (2021). IHPS Semester I Tahun 2021. BPK.
- BPK RI. (2021a). IHPS Semester II Tahun 2021. BPK.
- Chen, Z., Pan, J., Wang, L., & Shen, X. (2016). Disclosure of government financial information and the cost of local government’s debt financing – Empirical evidence from provincial investment bonds for urban construction. China Journal of Accounting Research, 9(3), 191-206.
- Committee of Sponsoring Organizations of the Treadway Commission (COSO). (1992). Internal Control–Integrated Framework.
- Giroux, G., & Deis, D. (1993). Investor interests and government accounting disclosure. Accounting, Auditing & Accountability Journal, 6(1), 63-78.
- Giroux, G., & McLelland, A. J. (2003). Governance structures and accounting at large municipalities. Journal of Accounting and Public Policy, 22(3), 203-230.
- Handoko, F., Pamungkas, B., Syakhroza, A., & A. Hermawan, A. (2019). Moderating effect of press highlights on the effect of the quality of internal control systems on disclosure in local government financial reports. Proceedings of the Asia Pacific Business and Economics Conference (APBEC 2018), 89(Apbec 2018), 476-484.
- Hardiningsih, P., Januarti, I., Srimindarti, C., & Oktaviani, R. M. (2019). Does the characteristics of regional government and complexity affect on the disclosure regional financial statements? Jurnal Akuntansi & Auditing Indonesia, 23(2), 106-116.
- Hariyani, E., Aswar, K., Wiguna, M., Ermawati, & Anisma, Y. (2022). Factors influencing financial statement disclosure: Empirical evidence from Indonesia. Investment Management and Financial Innovations, 19(2), 230-237.
- Kewo, C. L., & Afiah, N. N. (2017). Does quality of financial statement affected by internal control system and internal audit? International Journal of Economics and Financial Issues, 7(2), 568-573.
- Kiswanto, Hajawiyah, A., & Lazty Mahera, Y. (2020). Factors influencing the weaknesses of internal control of local governments in Indonesia. International Humanities & Social Sciences, 8(1), 122-129.
- Kusuma, R., Aswar, K., & Ermawati. (2021). Pengungkapan Laporan Keuangan Pemerintah Daerah di Indonesia: Suatu Tinjauan Empiris. Konferensi Riset Nasional Ekonomi, Manajemen, Dan Akuntansi, 2(1), 581-591.
- Lesmana. (2010). Pengaruh karakteristik pemerintah daerah terhadap tingkat pengungkapan wajib di Indonesia. Universitas Sebelas Maret.
- 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.
- Muthaher, O. (2019). Government accounting standard, human capacity, internal control system and financial supervision as a quality of government financial statements. Fokus Ekonomi: Jurnal Ilmiah Ekonomi, 14(1), 186-200.
- Nurhidayati, R. P., & Rahayu, S. (2020). Determinan pengungkapan LKPD pada website resmi pemerintah daerah provinsi di Indonesia tahun 2017. Jurnal Ilmiah Akuntansi Dan Finansial Indonesia, 3(2), 87-95.
- 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)), 65-69.
- Pemendagri No. 13. (2006). Peraturan Menteri Dalam Negeri (Permendagri) No. 13 Tahun 2006 tentang Pedoman Pengelolaan Keuangan Daerah.
- Pemendagri No. 64. (2013). Peraturan Menteri Dalam negeri Republik Indonesia No 64 Tahun 2013 tentang Penerapan Standar Akuntansi Pemerintahan Berbasis Akrual Pada Pemerintah Daerah. In Kebijakan Akuntansi.
- Peraturan Pemerintah No. 60. (2008). Peraturan Pemerintah Republik Indonesia Nomor 60 Tahun 2008 Tentang Sistem Pengendalian Intern Pemerintah.
- Peraturan Pemerintah No. 71. (2010). Peraturan Pemerintah Republik Indonesia Nomor 71 Tahun 2010 tentang Standar Akuntansi Pemerintah (SAP).
- Prismanisa, D., Suhairi, & Sofriyeni, N. (2019). The effect of characteristics, complexity and audit findings on the level of disclosure of the local government’s financial statements with the internal control system as moderating variable. International Journal of Innovative Science and Research Technology, 4(12), 555-562.
- Pujiono, D. S., Sukarno, H., & Puspitasari, N. (2016). Pengaruh sistem pengendalian internal terhadap pengelolaan keuangan daerah serta kinerja pemerintah daerah (Studi di Provinsi Maluku Utara). Bisma Jurnal Bisnis Dan Manajemen, 10(2), 68-81.
- Putri, E. A., Rahayu, S., & Lestari, T. U. (2022). Opini audit, dana perimbangan, kondisi keuangan dan pengungkapan informasi keuangan pemerintah daerah. E-Jurnal Akuntansi, 32(8), 2132-2141.
- Putri, R. L., Nirwanto, N., Assih, P., & Darmawan, W. (2020). The importance of regional original income, balance fund and demography on flypaper effect through the regional government expenditure. International Journal of Research in Humanities and Social Studies, 7(2), 33-45.
- Ritonga, I. T. (2014). Developing a measure of mocal government’s financial condition. Journal of Indonesian Economy and Business, 29(2), 142-164.
- Ritonga, I. T., Clark, C., & Wickremasinghe, G. (2012). Assessing financial condition of local government in Indonesia: An exploration. Public and Municipal Finance, 1(2), 37-50.
- Ryan, C., Stanley, T., & Nelson, M. (2002). Accountability disclosures by Queensland local government councils: 1997–1999. Financial Accountability & Management, 18(3), 261-289.
- Sekaran, U., & Bougie, R. (2016). Research methods for business: A skill-building approach. In Leadership & Organization Development Journal (Seventh Ed). John Wiley & Sons Ltd.
- Styles, A. K., & Tennyson, M. (2007). The accessibility of financial reporting of U.S. municipalities on the internet. Journal of Public Budgeting, Accounting & Financial Management, 19(1), 56-92.
- Yosefrinaldi. (2013). Pengaruh kapasitas sumber daya manusia dan pemanfaatan teknologi informasi terhadap kualitas laporan keuangan pemerintah daerah dengan variabel intervening sistem pengendalian intern pemerintah (Studi empiris pada DPKAD se-Sumatera Barat). Jurnal Akuntansi, 1(1), 1-24.
-
Perceived health risk, online retail ethics, and consumer behavior within online shopping during the COVID-19 pandemic
Yuniarti Fihartini ,
Arief Helmi ,
Meydia Hassan ,
Yevis Marty Oesman
doi: http://dx.doi.org/10.21511/im.17(3).2021.02
Innovative Marketing Volume 17, 2021 Issue #3 pp. 17-29 Views: 3944 Downloads: 1525 TO CITE АНОТАЦІЯThe risk of virus contracting during the COVID-19 pandemic has changed consumer preference for online shopping to meet their daily needs than shopping in brick-and-mortar stores. Online shopping presents a different environment, atmosphere, and experience. The possibility of ethical violations is higher during online than face-to-face transactions. Therefore, this study was conducted to investigate the influence of perceived health risk and customer perception of online retail ethics on consumer online shopping behavior during the COVID-19 pandemic, involving seven variables, namely perceived health risk, security, privacy, non-deception, reliability fulfillment, service recovery, and online shopping behavior. The data were collected through an online survey by employing the purposive sampling technique to a consumer who has shopped online during the COVID-19 pandemic in Indonesia. 315 valid responses were obtained and analyzed through quantitative method using SEM-Amos. The results showed that perceived health risk and four variables of online retail ethics including security, privacy, reliability fulfillment, and service recovery affected online shopping behavior. Meanwhile, non-deception was found to have an insignificant effect. The coefficient value proved perceived health risk to be more dominant in influencing online shopping behavior than the variables of online retail ethics. Thus, consumers pay more concern for their health during online shopping. However, positive consumer perceptions of the behavior of online retail websites in providing services also can encourage consumers to shop online during this pandemic.
-
Positive contribution of the good corporate governance rating to stability and performance: evidence from Indonesia
RR. Iramani , Muazaroh Muazaroh , Abdul Mongid
doi: http://dx.doi.org/10.21511/ppm.16(2).2018.01
Problems and Perspectives in Management Volume 16, 2018 Issue #2 pp. 1-11 Views: 2984 Downloads: 251 TO CITE АНОТАЦІЯThis paper aims to examine the impact of Good Corporate Governance (GCG) practice on bank stability and performance. Governance is measured using the GCG rating that covers eleven aspects. The authors apply instrumental regression to link governance to performance and stability. The study covers a sample of 150 banks. The result shows that bank stability can mediate bank governance and bank performance. On the determinant of bank performance, it can be concluded that the GCG rating is positive and directly influences bank performance. Bank stability is also positive for bank performance indicating the indirect contribution of the GCG rating to bank performance. NPL, LDR, CAR and bank’s size (LASSET) are all negative and significant. The aim of this paper is to provide strong empirical evidence on the importance of governance and stability for performance. The limitations of this paper are the size of the sample and that it only covers public banks which are theoretically required to apply better governance in all aspects of their business by the Capital Market Authority.
-
Human resource management in promoting innovation and organizational performance
I Gede Riana ,
Gede Suparna ,
I Gusti Made Suwandana ,
Sebastian Kot 
,
Ismi Rajiani
doi: http://dx.doi.org/10.21511/ppm.18(1).2020.10
Problems and Perspectives in Management Volume 18, 2020 Issue #1 pp. 107-118 Views: 2967 Downloads: 668 TO CITE АНОТАЦІЯHuman resource management (HRM) is one of the elements enabling an organization to remain competitive in turbulence conditions. The effective practice of HRM makes competent and innovative employees contributing to the achievement of organizational objectives. This study aims to analyze HRM practices in creating innovation and organizational performance. The questionnaire was used to measure the respondents’ perceptions of variables used by a Likert scale. A survey of 126 manager samples and middle managers at export-oriented short and medium enterprises (SMEs) in Bali, Indonesia, was conducted to test the model. The analysis has shown that the proposed model was proven to be compliant with the research hypotheses. HRM significantly affects organizational performance and innovation, and it was found out that innovation can improve organizational performance. However, in the process of simultaneous testing, it was found out that innovation cannot improve organizational performance. The lack of attention to investments in human resources became one of the barriers to SMEs in creating innovation.
