Antecedents of the Accountability in Indonesian Local Government Financial Reporting

• Abdullah, M. Ikbal ^[1] ; Sudirman ^[1] ; Masdar, Rahma ^[1] ; Din, Muhammad ^[1] ; Firman, Muhammad Fikram ^[1]
  1. [1] Tadulako University

     Tadulako University

     Indonesia

     
• Localización: International Journal of Professional Business Review: Int. J. Prof.Bus. Rev., ISSN 2525-3654, ISSN-e 2525-3654, Vol. 7, Nº. 5, 2022 (Ejemplar dedicado a: Continuous publication; e0597)
• Idioma: inglés
• DOI: 10.26668/businessreview/2022.v7i5.e709
• Enlaces
  • Texto completo (pdf)
• Resumen

  • Purpose: This study aims to analyze the role of the government’s budget supervision on financial accountability to reduce fraud against the local government budgets.

      Theoretical framework: The theoretical framework from Gabrini (2013) highlights the importance for organizations to design and manage financial reports and audits to maintain legitimacy, along with the increasing demands for transparency and accountability of public organizations today.

      Design/methodology/approach: To achieve this goal, the data used in this study is secondary data sourced from the central and regional government’s auditing board between 2016 to 2019.

      Findings: The results showed that budget supervision negatively affects the accountability of local government financial reports. Moreover, a follow-up audit has a negative effect on the fraud against the local government budget and has a positive effect on financial accountability. The results also demonstrated a negative effect of financial accountability on the fraud against local government budget.

      Research, Practical & Social implications: As the implication, the government is expected to draft an implementing regulation as a technical guideline to avoid fraud against the government budget. In order to encourage an increase in the target of unqualified opinions, it is expected that the central government can provide incentive funds to regional governments that get unqualified opinions to maximize their capacity to increase financial accountability.

      Originality/value: This research is among the first in empirically examinating the full mediating effect of financial accountability in the relationship between budget supervision and the fraud against local government budget in Indonesia.

• Referencias bibliográficas
  • Abdullah, M.I., Furqan, A.C., Yamin, N.Y., & Oktora, F.E. (2020). Incentive function of audit opinion for the increase of regional operational...
  • Asare, T. (2009). Internal auditing in the public sector: Promoting good governance and performance improvement. International Journal on...
  • Assakaf, E. A., Samsudin, R. S., & Othman, Z. (2018). Public sector auditing and corruption: A literature. Asian J. Financ. Account, 10,...
  • Baron, R. M., & Kenny, D. A. (1986). The moderator–mediator variable distinction in social psychological research: Conceptual, strategic,...
  • Brusca, I., Manes Rossi, F., & Aversano, N. (2018). Accountability and transparency to fight against corruption: an international comparative...
  • Cressey, D. R. (1953). Other People’s Money: A Study of the Social Psychology of Embezzlement. New York: Free Press.
  • Din, M., Munawarah, M., Ghozali, I., Achmad, T., & Karim, F. (2022). Governance of Financial Management and Regulation-Based Fiscal Accountability....
  • DiRienzo, C. E., Das, J., Cort, K. T., & Burbridge, J. (2007). Corruption and the role of information. Journal of International Business...
  • Dorminey, J., Fleming, A. S., Kranacher, M. J., & Riley Jr, R. A. (2012). The evolution of fraud theory. Issues in accounting education,...
  • Dye, K. M. (2007). Corruption and fraud detection by public sector auditors. EDPAC: The EDP Audit, Control, and Security Newsletter, 36(5-6),...
  • Furqan, A. C., Wardhani, R., Martani, D., & Setyaningrum, D. (2020). The effect of audit findings and audit recommendation follow-up on...
  • Gabrini, C. J. (2013). The effect of internal audit on governance: Maintaining legitimacy of local government. Tallahassee: The Florida State...
  • Habib, A., Wu, J., Bhuiyan, M. B. U., & Sun, X. (2019). Determinants of auditor choice: Review of the empirical literature. International...
  • Holt, T. P., & DeZoort, T. (2009). The effects of internal audit report disclosure on investor confidence and investment decisions. International...
  • Jayaraman, T. K., & Makun, K. (2022). Impact of Covid-19 Pandemic on Remittance Inflow-Economic Growth-Nexus in India: Lessons from an...
  • Kock, N. (2011). Using WarpPLS in e-collaboration studies: Mediating effects, control and second order variables, and algorithm choices. International...
  • Kock, N., & Lynn, G. (2012). Lateral collinearity and misleading results in variance-based SEM: An illustration and recommendations. Journal...
  • Latan, H., & Ghozali, I. (2017). Partial Least Squares: Konsep, Metode dan Aplikasi menggunakan Program WarpPLS 5.0 (Third Edit). Semarang:...
  • Liu, J., & Lin, B. (2012). Government auditing and corruption control: Evidence from China’s provincial panel data. China Journal of Accounting...
  • Malagueño, R., Albrecht, C., Ainge, C., & Stephens, N. (2010). Accounting and corruption: a cross-country analysis. Journal of Money Laundering...
  • Masdar, R., Furqan, A. C., Masruddin, M., & Meldawaty, L. (2021). The role of transparency and professional assistance in regional financial...
  • Power, M. K. (2003). Auditing and the production of legitimacy. Accounting, organizations and society, 28(4), 379-394.
  • Raimo, N., Vitolla, F., Marrone, A., & Rubino, M. (2021). Do audit committee attributes influence integrated reporting quality? An agency...
  • Ratmono, D., & Darsono, D. (2022). New public management and corruption: empirical evidence of local governments in indonesia. Public...
  • Saputra, A., Utami, I., & Kristianti, I. (2018). Akuntabilitas Dan Transparansi Pelaporan Keuangan Pemerintah Daerah Serta Potensi Whistleblowing...
  • Schmidt, V., & Wood, M. (2019). Conceptualizing throughput legitimacy: Procedural mechanisms of accountability, transparency, inclusiveness...
  • Setyaningrum, D., Gani, L., Martani, D., & Kuntadi, C. (2015). The effect of auditor quality on the follow-up of audit recommendation....
  • Sofyani, H., Riyadh, H. A., & Fahlevi, H. (2020). Improving service quality, accountability and transparency of local government: The...
  • Solihin, M., & Ratmono, D. (2013). Analisis SEM-PLS dengan warppls 3.0. Yogyakarta: Andi.
  • Suchman, M. C. (1995). Managing legitimacy: Strategic and institutional approaches. Academy of management review, 20(3), 571-610.
  • Zahra, F., Abdullah, M.I., Kahar, A., Din, M., & Nurfalah, N. (2021). Preventing Procurement Fraud in e-purchasing for Indonesian Local...