Abstract
The purpose of this quantitative research is to test and prove empirically the effect of applying accrual-based accounting standards in Indonesia. The population in this study is the head of the financial subdivision and the financial staff of the regional government organizational unit in the DKI Jakarta province. The study used the random sampling method and managed to collect 84 respondents. Structural Equation Modeling (SEM) is used in this study as a data analysis test tool using Smart PLS software version 3.0. The results show that the quality of human resources and organizational commitment has a significant effect on the application of accrual-based accounting standards in Indonesia. Meanwhile, training and organization culture does not have a significant influence on the implementation of accrual-based accounting standards in Indonesia. The contribution for local government to improve their performance in reporting local government financial statements (LKPD) and assess their conformity with accounting standards in accordance with PP No. 71 of 2010 and ensure that the adoption of accrual-based accounting standards has been thoroughly established in local governments.
Highlights
The public sector's use of the cash basis accounting system has been criticized since it does not offer information on costs related to institutional activities
The purpose of this study is to investigate and demonstrate the impact of the independent factors of human resource quality, training, organizational commitment, and organizational culture on the accrual-based accounting standards adoption in the DKI Jakarta Province
The quality of human resources has a positive and significant effect on the application of accrual-based accounting standards. This shows that the good quality of human resources owned by recording actors and reporting financial statements of local government organizational units can improve and facilitate the implementation of accrual-based accounting standards
Summary
The public sector's use of the cash basis accounting system has been criticized since it does not offer information on costs related to institutional activities. The entity seeks to adopt the principles of New Public Management (NPM) which are useful for promoting accountability and transparency of the financial management system. The OECD (Organization for Economic Co-Operation and Development) was formed to build the principles of New Public Management that were useful in increasing transparency and accountability in 1970. Aswar (2019) the NPM principle aims to ensure that the information disclosed in financial statements can be accounted for, relevant and credible in decision-making. Indonesia has implemented the accrual basis accounting system in 24 provinces and 300 districts/cities, according to the 2020 IHPS Semester 1 figure from the 2015-2019 National Medium-Term Development Plan
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