IDEAS home Printed from https://ideas.repec.org/a/jfr/ijfr11/v11y2020i1p1-12.html
   My bibliography  Save this article

Interactions of Financial Assistance and Financial Reporting Competency: Evidence From Local Government in Papua and West Papua Indonesia

Author

Listed:
  • Pilipus Ramandei
  • Abdul Rohman
  • Dwi Ratmono
  • Imam Ghozali

Abstract

Good local government financial statements are financial statements according to the qualitative characteristics of financial statements, which are relevant, reliable, comparable and understandable. However, the phenomenon shows that there are still weaknesses in financial reporting in several local governments in Indonesia, especially in the provinces of Papua and West Papua based on the findings of the Audit Board of the Republic of Indonesia (IHPS II BPK, 2017). The purpose of this study is to obtain empirical evidence of the role of moderating financial assistance and apparatus competency on the quality of government financial reports. Explanation of the relationship between variables was using an institutional theory perspective. The survey was conducted in 2018 on 42 Local Governments in Papua and West Papua. Methods of processing and analyzing data were using SEM-PLS with WarpPLS 6.0 statistical software. The results of the apparatus competency research have a positive effect on the quality of financial statements. A financial resistance positively strengthens the influence of apparatus competency on the quality of local government financial reports. Thus, efforts to overcome the presentation of quality financial statements require competent apparatus through the existence of financial assistance policies. Limitations of the study are the method of collecting data using a questionnaire and that it is very possible for the bias to occur. Therefore, efforts to achieve better results need to be accompanied by an interview method in order to obtain additional information as a comparison of respondents' answers; 2) the determination coefficient value of R- square is 0.41 or 41% indicating that there are still 0.59 or 59% variability in the quality of Local Government Financial Statements (LKPD) which can be explained by other variables outside the research model.

Suggested Citation

  • Pilipus Ramandei & Abdul Rohman & Dwi Ratmono & Imam Ghozali, 2020. "Interactions of Financial Assistance and Financial Reporting Competency: Evidence From Local Government in Papua and West Papua Indonesia," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(1), pages 1-12, January.
    • Handle: RePEc:jfr:ijfr11:v:11:y:2020:i:1:p:1-12
    DOI: 10.5430/ijfr.v11n1p1
    as

    Download full text from publisher

    File URL: http://www.sciedu.ca/journal/index.php/ijfr/article/view/15998/10207
    Download Restriction: no
    File URL: http://www.sciedu.ca/journal/index.php/ijfr/article/view/15998
    Download Restriction: no
    File URL: https://libkey.io/10.5430/ijfr.v11n1p1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Harun Harun & Monir Mir & David Carter & Yi An, 2019. "Examining the unintended outcomes of NPM reforms in Indonesia," Public Money & Management, Taylor & Francis Journals, vol. 39(2), pages 86-94, February.
    2. Doyle, Jeffrey & Ge, Weili & McVay, Sarah, 2007. "Determinants of weaknesses in internal control over financial reporting," Journal of Accounting and Economics, Elsevier, vol. 44(1-2), pages 193-223, September.
    3. Altamuro, Jennifer & Beatty, Anne, 2010. "How does internal control regulation affect financial reporting?," Journal of Accounting and Economics, Elsevier, vol. 49(1-2), pages 58-74, February.
    4. Muhammad Din & Munawarah & Imam Ghozali & Tarmizi Achmad, 2017. "The Follow Up of Auditing Results, Accountability of Financial Reporting and Mediating Effect of Financial Loss Rate: An Empirical Study in Indonesian Local Governments," European Research Studies Journal, European Research Studies Journal, vol. 0(4A), pages 443-459.
    5. Andi Agus & Imam Ghozali, 2019. "Mediating Effect of Audit Quality in Relationship Between Auditor Ethics and Litigation: An Empirical Study," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 91-100.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Suratno & J.M.V. Mulyadi, 2020. "Taxes, Revenues and Capital Expenditure as Determinants of Financial Sufficiency of Regional Government," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 283-290.
    2. Khowanas Saeed Qader & Kemal Cek, 2023. "Analysis of the Impact of External Auditors’ Autonomy on Financial Accounting Information Quality Case Study Commercial Banks in Northern Iraq," Sustainability, MDPI, vol. 15(12), pages 1-21, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Meng, Yongqiang & Shen, Dehua & Xiong, Xiong, 2023. "When stock price crash risk meets fundamentals," Research in International Business and Finance, Elsevier, vol. 65(C).
    2. Skaife, Hollis A. & Veenman, David & Wangerin, Daniel, 2013. "Internal control over financial reporting and managerial rent extraction: Evidence from the profitability of insider trading," Journal of Accounting and Economics, Elsevier, vol. 55(1), pages 91-110.
    3. Kwangwuk Oh & Wooseok Choi & Seok Woo Jeong & Jinhan Pae, 2014. "The effect of different levels of internal control over financial reporting regulation on the quality of accounting information: evidence from Korea," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 21(4), pages 412-442, December.
    4. Jin, Justin & Li, Na & Liu, Suyi & Khalid Nainar, S.M., 2023. "Cyber attacks, discretionary loan loss provisions, and banks’ earnings management," Finance Research Letters, Elsevier, vol. 54(C).
    5. Graham, Roger C. & Moore, Jared A., 2018. "The mitigation of high-growth-related accounting distortions after sarbanes-oxley," Research in Accounting Regulation, Elsevier, vol. 30(2), pages 82-94.
    6. Oliver Henk, 2020. "Internal control through the lens of institutional work: a systematic literature review," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 31(3), pages 239-273, September.
    7. Cho, Myojung & Chung, Kwang-Hyun, 2016. "The effect of commercial banks' internal control weaknesses on loan loss reserves and provisions," Journal of Contemporary Accounting and Economics, Elsevier, vol. 12(1), pages 61-72.
    8. Cheng, Mei & Dhaliwal, Dan & Zhang, Yuan, 2013. "Does investment efficiency improve after the disclosure of material weaknesses in internal control over financial reporting?," Journal of Accounting and Economics, Elsevier, vol. 56(1), pages 1-18.
    9. Holder, Anthony & Karim, Khondkar & Lin, Karen (Jingrong) & Pinsker, Robert, 2016. "Do material weaknesses in information technology-related internal controls affect firms' 8-K filing timeliness and compliance?," International Journal of Accounting Information Systems, Elsevier, vol. 22(C), pages 26-43.
    10. Dechow, Patricia & Ge, Weili & Schrand, Catherine, 2010. "Understanding earnings quality: A review of the proxies, their determinants and their consequences," Journal of Accounting and Economics, Elsevier, vol. 50(2-3), pages 344-401, December.
    11. Panagiotis E. Dimitropoulos & Konstantinos Koronios, 2018. "Earnings Persistence of European Football Clubs under UEFA’s FFP," IJFS, MDPI, vol. 6(2), pages 1-15, April.
    12. Liu, Lihua & Weng, Danyan & Zhang, Qin, 2023. "Unintended consequences of tax enforcement on corporate innovation: Evidence from a natural experiment in China," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1292-1309.
    13. Stolowy, Hervé & Jeanjean, Thomas & Erkens, Michael, 2011. "The economic consequences of increasing the international visibility of financial reports," HEC Research Papers Series 957, HEC Paris.
    14. Ammar Hussain & Minhas Akbar & Muhammad Kaleem Khan & Ahsan Akbar & Mirela Panait & Marian Catalin Voica, 2020. "When Does Earnings Management Matter? Evidence across the Corporate Life Cycle for Non-Financial Chinese Listed Companies," JRFM, MDPI, vol. 13(12), pages 1-19, December.
    15. Cowan, Arnold R. & Salotti, Valentina, 2015. "The resolution of failed banks during the crisis: Acquirer performance and FDIC guarantees, 2008–2013," Journal of Banking & Finance, Elsevier, vol. 54(C), pages 222-238.
    16. Manhwa Wu & Paoyu Huang & Yensen Ni, 2020. "The Impact of Institutional Shareholdings on Price Limits," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 27(3), pages 343-361, September.
    17. Baolei Qi & Liuchuang Li & Qing Zhou & Jinghui Sun, 2017. "Does internal control over financial reporting really alleviate agency conflicts?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 57(4), pages 1101-1125, December.
    18. Ines Maraghni & Mehdi Nekhili & Tawhid Chtioui, 2016. "Caractéristiques du comité d'audit et étendue du reporting sur le contrôle interne : cas des entreprises françaises," Post-Print hal-01901185, HAL.
    19. Jannis Bischof & Ulf Brüggemann & Holger Daske, 2012. "Fair Value Reclassifications of Financial Assets during the Financial Crisis," SFB 649 Discussion Papers SFB649DP2012-010, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    20. Chychyla, Roman & Leone, Andrew J. & Minutti-Meza, Miguel, 2019. "Complexity of financial reporting standards and accounting expertise," Journal of Accounting and Economics, Elsevier, vol. 67(1), pages 226-253.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jfr:ijfr11:v:11:y:2020:i:1:p:1-12. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gina Perry (email available below). General contact details of provider: http://ijfr.sciedupress.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.