The Effect of Budgets’ Proportion and Non-Financial Factors on the Audit Results of Local Governments’ Financial Statements in Indonesia

Abstract

Local governments’ financial statements that obtain unqualified opinion until the end of 2011 were still relatively few in number. This study aims to empirically examine the effect on the audit results of the financial statements of local governments in Indonesia of the budgets’ proportion, the effectiveness of the internal audit, the follow-up to the Supreme Audit Board’s findings, the Supreme Audit Board’s opinions from earlier periods, and the competence of the available human resources to understand the audit results of the Supreme Audit Board. Budget management has become very important since it lays out a detailed plan for the expenditure and revenue of the local governments, so that it can be accountable to the public. This study used a sample of 434 Indonesian Local Governments’ financial statements of 2011 and a logistic regression analysis. This study used primary and secondary data to uncover the phenomena that the local governments’ financial statements which received an unqualified opinion from the Supreme Audit Board were still relatively few in number. The results of this study showed that the budgets’ proportions of local governments are negatively significant in affecting the audit results of the financial statements of the local governments. The Supreme Audit Board’s opinions from earlier periods positively influenced the audit results of the financial statements of local governments. Whereas the variables of the effectiveness of internal controls, the follow-up to the Supreme Audit Boards’ findings, and the competence of the human resources do not significantly influence the audit results of the financial statements of local governments. The results of this study can contribute both theoretically and practically to the quality of the local governments’ financial statements. Keywords: budgets’ proportion, human resources, competency, opinions, audit quality.

Government Reporting and Quality of Public Services: Are They Twins?

“…The results of this study are not in line with the research of Furqan et al (2020), Agustina and Setyaningrum (2020), Setyaningrum (2017), Sari et al (2015), and Johnson et al (2012). However, this study is in line with Nurdiono et al (2016) and Agusti (2014). Nurdiono et al (2016) also said that the recommendations given and followed up could not guarantee that the financial statements are free from errors or misinformation.…”

“…However, this study is in line with Nurdiono et al (2016) and Agusti (2014). Nurdiono et al (2016) also said that the recommendations given and followed up could not guarantee that the financial statements are free from errors or misinformation. It is possible due to differences in interpretation of the recommendations given.…”

Tingkat Responsivitas Memoderasi: Karakteristik Pemerintah Daerah, Temuan Hasil Pemeriksaan Dan Kinerja Keuangan

“…Hasil penelitian lain tentang Sistem Pengendalian Intern Pemerintah (SPIP), misalnya pengendalian intern berpengaruh positif terhadap pencegahan fraud (Soleman, 2013), semakin kuat pengendalian intern, maka pencegahan kecurangan dapat dilakukan, sebaliknya semakin lemah pengendalian intern pencegahan kecurangan semakin leluasa, sehingga akan berpengaruh terhadap kinerja keuangan pemerintah daerah. Disisi lain kualitas pengendalian intern berpengaruh signifikan dengan proses tindak lanjut temuan, kompetensi fungsi auditor intern, dan keterlibatan komite audit, efektivitas pengendalian intern secara tidak signifikan mempengaruhi hasil audit laporan keuangan pemerintah daerah (Nurdiono et al, 2016), jumlah temuan audit atas sistem pengendalian intern dan jumlah temuan audit kepatuhan secara bersama berpengaruh negatif terhadap opini atas LKPD.…”

Determinant of Indonesia Government Financial Reporting Quality

“…The objectives of financial reporting in the public sector include accountability and decision making (Mack and Ryan 2006). Accountability is the responsibility for managing resources and implementing policies entrusted to stakeholders in achieving the goals that have been set periodically through transparency and disclosure (Nurdiono et al 2016;Nurdiono and Gamayuni 2018). The provision of financial statement information must meet the qualitative characteristics of financial statements, namely normative measures that need to be met to meet quality financial reports (Herath and Albarqi.…”