Abstract
Local Governments are expected to provide relevant information related to their finance and performance to the public through the media that is easily accessible in order to meet the principles of accountability and transparency. The financial information through internet is called IFR (Internet Financial Reporting) which is a combination between the internet multimedia capability and capacity to communicate the financial information interactively. The objective of this study is to empirically examine determinants of internet financial reporting by local government in Indonesia.
 This study uses five variables there are Political Competition, Size, Dependency, Wealth and Type of Local Government. The sample in this study selected with purposive sampling. Total sample in this study are 130 local governments which contain 97 regency (74,6%) and 33 municipal (25,4%). Analysis method used in this study is multiple liner regression. The result shows that political competition, size and wealth of local government have a positive influence to the internet financial reporting in Indonesia. Two other variables, dependency and type of local government do not significantly affect to the internet financial reporting in Indonesian local goverments.
Highlights
Reforms in the area of financial management started with Law Number 17 Year 2003 regarding State Finance, which requires the form and content of the report accountability of the State Budget (APBN) or Regional Government Budget (APBD)
The results study of Rahman, et al, (2013) shows that political competition proved to affect the internet financial reporting
This study addresses the following research questions: (1) whether the political competition of local government has a positive association to the internet financial reporting; (2) whether the size of local government has a positive association to the internet financial reporting; (3) whether the dependency of local government has a positive association to the internet financial reporting; (4) whether the wealth of local government has a positive association to the internet financial reporting; (5) whether the type of local government has a positive association to the internet financial reporting; and (6) whether the political competition, size, leverage, wealth, and type of local government simultaneously has a positive association to the internet financial reporting?
Summary
Reforms in the area of financial management started with Law Number 17 Year 2003 regarding State Finance, which requires the form and content of the report accountability of the State Budget (APBN) or Regional Government Budget (APBD). The financial statements must be audited by the Supreme Audit Agency (BPK) to assess the validity and reliability of the information related to the management and responsibility of the state finance (Martani, et al, 2014). In the scope of local government, accountability for financial management by local governments should not be given to Parliament as the representative of the people only, and to the general public (Diani, 2016). Attention to the issue of transparency in Indonesia has increased since the issuance of Law No 14 of 2008 regarding Public Information. One form of transparency that can be achieved by governments is to publish financial reports through the Internet. We can see the use of internet in Asia on the diagram below
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