This study investigates the effect of local government size, local government spending, and the local government dependence level on the financial reporting quality. This study employs a quantitative method. The research data summarizes the financial statements of the regency/city governments in Papua and West Papua from 2016 to 2020. The data is sourced from www.djpk.kemenkeu.go.id and www.bpk.go.id. By using purposive sampling, the sample amounted to 207 observations. The hypothesis testing of this research was conducted employing logistic regression. The test results suggest that the local government size and local government spending are positively associated with financial reporting quality. In contrast, the local government dependence level is negatively associated with financial reporting quality.

Kualitas laporan keuangan mencerminkan kesesuaian informasi keuangan yang disajikan oleh suatu entitas dengan standar akuntansi yang berlaku. Laporan keuangan yang berkualitas baik menunjukkan bahwa informasi yang terkandung di dalamnya dapat digunakan dalam pengambilan keputusan. Penelitian ini bertujuan untuk menginvestigasi pengaruh transparansi informasi keuangan, belanja modal, kesehatan keuangan dan ukuran pemerintah daerah terhadap kualitas laporan keuangan pemerintah daerah. Penelitian ini menggunakan pendekatan metode kuantitatif. Data penelitian diambil dari ikhtisar laporan keuangan pemerintah kabupaten/kota di Indonesia tahun 2016 sampai dengan tahun 2019. Data penelitian ini bersumber dari www.djpk.kemenkeu.go.id, website resmi pemerintah daerah, dan www.bpk.go.id. Berdasarkan purposive sampling, sampel penelitian ini berjumlah 349 observasi. Pengujian hipotesis penelitian ini dilakukan dengan menggunakan analisis regresi logistik. Hasil pengujian menunjukkan bahwa transparansi informasi keuangan dan ukuran pemerintah daerah berpengaruh positif terhadap kualitas laporan keuangan. Penelitian ini juga menyimpulkan bahwa belanja modal dan kesehatan keuangan pemerintah daerah tidak bepengaruh terhadap kualitas laporan keuangan. Penelitian ini dapat digunakan oleh Badan Pemeriksa Keuangan dalam melakukan indikasi awal atas kualitas laporan keuangan pemerintah daerah.

This study examines the impact of fiscal autonomy, capital expenditure for basic services, and local government investment on the transparency level of local government. In addition, this study includes local government financial health as a moderator in the association between the dependent and independent variables. This study employs a quantitative approach. Data are obtained through content analysis of the local government's official websites. The total sample of this study amounted to 349 observations collected from 2016 to 2019 and was selected by purposive sampling. The hypothesis test employs multiple linear regression analysis with the ordinary least square. The study suggests that fiscal autonomy is positively associated with the transparency level of local governments, capital expenditure for basic services is negatively associated with the transparency level of local governments, and local government investment is not associated with the transparency level of local governments. This study also finds that local governments' financial health has a role in strengthening the positive effect of local government investment on the transparency level. However, the local government's financial health weakens fiscal autonomy's positive effect on the transparency level of local government. Furthermore, the local government's financial health has no moderator in the association between capital expenditure for basic services and the transparency level of local government. The study result suggests that the Indonesia Ministry of Finance and the Indonesia Ministry of Home Affairs should boost the policies that encourage transparency in local governments and enhance the independence level to generate local revenues.