Financial reporting, public services and local executives’ re-electability in Indonesia

Abstract

This study aims to analyze the effects of audit findings, follow-up of audit recommendations, quality of financial reporting and public services on the incumbent electability. Using subnational elections data in Indonesia in 2015 and 2017, the final sample amounted to 291 observations, which consisted of 11 provincial elections, 55 municipal elections, and 255 district elections. The results showed a negative effect of audit findings on the incumbent electability, as hypothesized. Further findings present the positive influences of the follow-up of audit recommendations, financial reporting quality on incumbent electability. The last result implies the originality of the study in which non-financial performance factor as proxied by the quality of public services in subnational entities in Indonesia are used as the basis for political decision-making by constituents to elect the incumbent or challenger. The practical implications are the need for subnational executives to pay attention to the importance of accounting and auditing practices as well as public service in increasing local community satisfaction and trust. The theoretical findings are insightful in providing mechanisms of government accounting management and the usefulness of public sector information in influencing electoral democracy in local governments in Indonesia. The novelty of this study is in the empirical examination to link auditing practices and its political consequences.

Model of Good Governance Principles in Improving the Performance and Quality of Services of Regency/City Population and Civil Registration Services in West Sumatera

“…The government's responsiveness to the needs and aspirations of the community is also a factor that influences the performance and quality of public services (Beeri et al, 2019;Furqan et al, 2021). A responsive government will be able to respond quickly and appropriately to community problems and needs.…”

Quality of Public Services in Local Governments in Indonesia : A Study of Capital Expenditures and Government Internal Control Systems

“…In order to reduce the agent's problem, good governance emerges from the government. In government administration, there must be a supervisory mechanism carried out by the legislature to monitor whether the executive is correct, in which case the public interest is sacrificed for individual interests (Furqan et al, 2021;Setyaningrum et al, 2017b). According to the explanation of the agency theory basis, several variables were derived from reducing existing problems and the form of delegation of authority from the community or agents for exemplary public service and expectations.…”

“…The novelty of the subsequent research is that many previous studies used survey methods using questionnaires where measurement bias might occur. (Asogwa, 2013 Then the novelty of the research is data processing using time lag in the data processing process examining public services for the first year with capital expenditures the following year, which is a limitation of research conducted by (Furqan et al, 2021). This research was conducted to examine public services using supporting data from official data from the assessment results from authorized institutions such as the Ministry of Home Affairs and the BPK (Financial Audit Board).…”

Analysis of Financial Ratios to Assess Local Government Financial Performance in Labuhan Batu District, North Sumatra, Indonesia

“…Performance measurement is used to assess the accountability of organizations and managers in public services, which is not just the ability to show that public money has been spent but includes the ability to show that the money has been spent efficiently and effectively (Omurgonulsen, 2002). The following is table 1.1 regarding the One of the problems that arose later was knowing that there were several weaknesses in the financial reporting of local governments, especially regarding financial control, accounting weaknesses, and financial reporting (Furqan et al, 2021;Yaya & Suprobo, 2019). This will make it challenging to prepare local government financial statements to form financial reporting quality (Bimo et al, 2019).…”