Management Support and Internal Auditor Competency Matter: Empirical Study in Regional Inspectorate in Indonesia

Abstract

The aim of this research are to identified the crucial issues faced by internal auditor in Regional Inspectorate in Indonesia and its impact on the quality of local government financial report. Research methodology tool used in this study is interview. Interview method can stimulate the respondent to answer the question, dig further the information from respondent, and record the answers. The result of this empirical research shown that there are two factors influenced performance of the internal auditor, namely management support and internal auditor competency. Management support has strong relationship with independency and the tone at the top or the leader commitment. If the internal auditors are not independent, the financial report produced will be biased which in turn is useless to improve the accountability and transparency of the public sector. Tone at the top helps maintaining an effective internal control system, and it indirectly helps in preventing fraud and other unethical behaviors in organization. Auditor competency divided into quality and quantity of internal auditor in Regional Inspectorate in Indonesia. The lack in quantity and quality of internal auditor affect the performance of internal auditor in doing their duty as an auditor which is related to the quality of financial report. Finally, authors found that these two crucial issues happened in Regional Inspectorate in Indonesia, have an impact on the quality of local government financial report.