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.
Highlights
Financial statements are a source of information for stakeholders and are used for decision making
Efforts to increase the competency of officials in the process of reporting and presenting financial statements of regional governments in Papua and West Papua through training and technical guidance to address the problem of lack of human resources in the field of financial management so that it influences the financial reporting of local governments
Based on the results of research and discussion, it was concluded that the interaction of financial assistance and personnel competence affect the Local Government Financial Reports in Papua and West Papua
Summary
Financial statements are a source of information for stakeholders and are used for decision making. Good quality financial reporting facilitates optimal decision making and allocation of potential resources both in the private sector and the public sector. The quality of government financial reports is a measure of the value of information contained in financial statements and meets the qualitative elements of government financial reports and is used for decision making (Herawati, 2014). Good local government financial statements according to Government Regulation No 71 of 2010 are financial statements that have relevant, reliable, comparable and understandable characteristics. That is information contained in and can influence user decisions by helping evaluate past or present events, and predict the future, and confirm or correct the results of evaluations in the past
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