The effect of audit findings and audit recommendation follow-up on the financial report and public service quality in Indonesia

Furqan, Andi Chairil; Wardhani, Ratna; Martani, Dwi; Setyaningrum, Dyah

doi:10.1108/ijpsm-06-2019-0173

Cited by 41 publications

(82 citation statements)

References 35 publications

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“…Basically, audit findings can illustrate weaknesses in financial management, internal control structures, operational inefficiencies, non-compliance with accounting standards and financial reporting regulations, and corruption that occur in managing public revenues and expenditures (Cohen & Leventis, 2013;Dzikrullah et al, 2020;Johnson et al, 2012;Liu & Lin, 2012;Rahayu et al, 2020;Tumwebaze et al, 2018;Widyaningsih et al, 2019). For deficiencies/weaknesses/non-compliance/violations found in the audit process, the auditor will usually provide audit recommendations to the auditee in order to overcome these problems (Furqan et al, 2020). The purpose of providing audit recommendations can also be interpreted as an auditor's effort to demonstrate preventive measures for the auditee so that similar problems do not recur in the second term (Eckersley et al, 2014).…”

Section: Empirical Literature Review and Hypotheses Developmentmentioning

confidence: 99%

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

Furqan

Wardhani

Martani

et al. 2021

Cogent Business & Management

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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.

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Section: Empirical Literature Review and Hypotheses Developmentmentioning

confidence: 99%

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

Furqan

Wardhani

Martani

et al. 2021

Cogent Business & Management

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“…Government financial transparency and accountability have a positive and significant relationship with local government performance. (Agwor, 2017), Follow-up recommendations have a positive relationship in improving the quality of local government financial reports and public services quality, (Furqan et al, 2020), Based on these arguments the "The Role of Government Internal Control System Quality in Moderating the Relationship of Financial Reports Quality and Local Government Performance" hypothesis to be tested is: H1. The quality of financial reports has a positive effect on the local governments performance.…”

Section: Analysis Of the Relevant Literaturementioning

confidence: 99%

“…The quality of financial reports affects the quality of public services, but audit findings have a negative impact on the quality of financial reports and the quality of public services, while follow-up audit recommendations have a positive role in improving the quality of financial reports and the quality of public services. (Furqan, 2020). If an organization fails to properly conduct a risk assessment, it will result in not being identified as possible fraud risks.…”

Section: The Role Of the Government Internal Control Systemmentioning

confidence: 99%

“…It indicates that the financial reports quality is not good, and the internal control system has not been implemented optimally so that the contribution to the performance of local governments is still doubt. The quality of financial reports had a significant effect on non-financial performance (Al-Dmour, Abbod and Al Qadi, 2018), the quality of financial reports affected the quality of public services (Furqan et al, 2020), the implementation of International Public Sector Accounting Standards (IPSAS) can improve accountability and quality of financial reports, (Muraina and Dandago, 2020), furthermore, local government financial reports did not provide the information needed to evaluate local government performance. (Christine Ryan and Christine, 2000), accrual-based financial reports affect the financial performance of local governments (Perwita Sari et al, 2018), local government financial reports that receive a fair opinion with exceptions cannot be used to measure local government performance (Goenawan, 2010).…”

Section: Introductionmentioning

confidence: 99%

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The Role of Government Internal Control System Quality in Moderating the Relationship of Financial Reports Quality and Local Government Performance

Sunardi

2021

AFMJ

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Empirical test of the role of the quality of the internal control system in strengthening the relationship between the financial reports quality and the local governments performance in Indonesia used secondary data in the form of the BPK RI audit report and the Appendixs in the 2016 and 2018 of Regional Government Implementation Performance Evaluation Report (EKPPD). The population of 514 regency and city governments in Indonesia. The sampling technique was purposive sampling with a total of 268 regency and city governments using data for 3 years, the total sample was 804. Variable measurement used index, time dimension used panel data. The results showed that the quality of financial reports had a positive and significant effect on the local government performance, then the quality of the government internal control system (SPIP) cannot strengthen the relationship between the quality of financial reports and the performance of local governments. The research results were expected to contribute to the policy that the implementation of the local government internal control system should be the focus of the relevant agencies. The limitation of this research is the large gap score on the key performance indicator in each region EKPPD.

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“…Several previous studies in the scope of public sector accounting indicate that the implementation of follow‐up audit recommendations can have an impact on improving the quality of local government financial reporting (Setyaningrum et al, 2015; Setyaningrum, 2017; Din et al, 2017; Furqan et al, 2020), quality of public services (Furqan et al, 2020), and can reduce the occurrence of regional losses and/or corruption in the Regional Government (Din et al, 2017; Liu & Lin, 2012). However, besides Setyaningrum et al (2015) and Setyaningrum (2017), it is still rare to find research that further analyzes the determinants of the follow‐up of the audit recommendations, including the role of transparency in regional financial management and professional assistance.…”

Section: Introductionmentioning

confidence: 99%

The role of transparency and professional assistance in regional financial management in the Indonesian regional governments

Masdar

Furqan

Masruddin

et al. 2021

Journal of Public Affairs

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This study aims to analyze the extent of the role of transparency and professional assistance, particularly by the Financial and Development Supervisory Agency (BPKP) in the management of regional finances toward the implementation of follow‐up audit recommendations. Using data from provincial, city, and district governments in Indonesia in 2014–2016 in Indonesia, with a final sample of 1494 observations. The results of the study indicate that the level of transparency can play a role in increasing the level of suitability of the implementation of follow‐up audit recommendations that have been given by external auditors (the Supreme Audit Board/BPK) to the Regional Governments in Indonesia. However, although at the Provincial Government level, a positive influence was found on the existence of BPKP's assistance on the follow‐up of audit recommendations, this did not apply at the district and city level, because it was found that districts and cities that received BPKP assistance had lower audit recommendations compared to districts and cities that do not get BPKP assistance. The results of this study have implications for the strategies and policies (discretion) of Local Government officials in order to improve the suitability of the implementation of follow‐up audit recommendations. Therefore, the Central Government needs to encourage and facilitate increased transparency and implementation of follow‐up audit recommendations to the Regional Government, to optimize the achievement of governance reform goals in Indonesia, especially in order to realize accountability in regional financial management.

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The effect of audit findings and audit recommendation follow-up on the financial report and public service quality in Indonesia

Cited by 41 publications

References 35 publications

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

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

The Role of Government Internal Control System Quality in Moderating the Relationship of Financial Reports Quality and Local Government Performance

The role of transparency and professional assistance in regional financial management in the Indonesian regional governments

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