Abstract
Abstract This research aims to examine the effect of fiscal decentralization on financial performance by adding government size as the mediator variable and audit opinion as the moderator variable of counties and cities in Lampung Province. Lampung Province is the center of economic mobility in South of Sumatera Island so it can impact well to regional autonomy implementation and has the best financial statements (an unqualified opinion) in Sumatra Island (47.5%). This research was conducted in 13 counties and 2 cities in 2010-2013 for the objective to see the regional autonomy implementation started in one decade. The examination of hypothesis used to Partial Least Square with the significant of decision-making <0.10. The results show that fiscal decentralization gives the positive and significant effect to financial performance but non-significant effect to government size; government size gives the positive and non-significant effect to finance performance; and fiscal decentralization gives the positive and non-significant effect to finance performance with the audit opinion as the moderator variable.
Highlights
IntroductionThe local government through fiscal decentralization is given discretion in managing local revenue to meet the needs of the autonomous region (Siregar and Badrudin, 2017)
This research is evidence that the implementation of regional autonomy, especially in the fiscal sector was able to improve the financial performance of the counties/cities in Lampung Province, especially the success in realizing counties/ cities own source revenue
Budgeting strategy that do the counties/cities in Lampung Province be a sign of that countiess/ cities in Lampung Province not arbitrarily in predicting the realization of counties/ cities own source revenue based on the real potential that exists
Summary
The local government through fiscal decentralization is given discretion in managing local revenue to meet the needs of the autonomous region (Siregar and Badrudin, 2017). The magnitude of what the central government on fiscal decentralization to be properly budgeted and realized well that the financial independence of a region can be realized so that all shopping needs will be met in the area has become a common thing for some it is an indicator of financial performance area. Fiscal decentralization remains a serious problem in all counties/cities in Lampung Province after a decade in the implementation of regional autonomy. During 2010-2013, fiscal decentralization in the counties/ cities in Lampung Province has a pattern of relationships instructive, whereas fiscal decentralization is an important thing that is used to determine the financial dependence on the central government. Small fiscal decentralization will greatly affect the local financial performance (effectiveness) because the form of fiscal decentralization in Indonesia focused on fiscal decentralization expenditures
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