Assessing the impact of influencing factors on the quality of local government financial statements

Abstract

Purpose- This study to investigate the relationship between internal control systems, information technology, Implementation of Government Accounting Standards and the quality of financial statements in Indonesia local government. Methoodology- Data collection in this study based on a structured questionnaire sent to regional work unit of 75 local government unit tools of the 8 districts and city Banten Province of Indonesia. The insturment for contract and content reliability and validity was tested. Then, the hypothesis were tested using multiple linear regression. Findings- The results indicated that intenal control system, information technology has a significant effect on the quality of financial statement in Indonesia local governments, whereas implementation of government accouting standards has not significant relationship with the quality of financial statement in Indonesia local governemnt. Though the study had contributed in extending the quality of financial statements of local government in Indonesia. Due to the local government that prepared financial statement do not same treatment in every similar event from one period to another. This is also generally due to the limited ability of human resources owned by local governments. Conclusion- This study concluded that intenal control system, information technology are positve significantly on the quality of financial statements in local government. Whereas, the implementation of government accounting standards insignificant relationship with the quality of financial statements in Indonesia local government. Therefore, further studies could be conducted to include other variables such as internal audit, competency etc and other local government in Indonesia.