The Effect of Internal Control System and Human Resources Quality on Report Quality Finance with the Internal Environment as Intervening Variables in Regional Companies Tirtanadi Medan Drinking Water

Abstract

The purpose of this study is to determine whether the internal control system has an effect on the internal environment through the quality of financial reports. To find out whether the quality of human resources has an effect on the internal environment through the quality of financial reports. Small populations such as 100 or less than 100 should all be used as samples. This technique is known as the census technique. Thus, the number of samples in this study were 38 employees at PDAM Tirtandi Medan. The conclusions of this study are: The internal control system for the internal environment through the quality of financial reports is 0.064, with a T statistic value of 0.559 (<2,028) and a significance value (p-values) of 0.576 (> 0.05). hypothesis (H6) in this study was rejected. This shows that internal factors, for example: advances in information technology, changes in reporting standards, changes in government regulations with good internal controls can help employees to work more enthusiastically to prepare financial reports as well as possible, so that the quality of financial reports can be improved. The quality of human resources on the internal environment through the Quality of Financial Reports is 0.357, with a T Statistic value of 2.770 (> 2,028) and a significance value (p-values) of 0.006 (< 0.05). Thus, the seventh hypothesis (H7) in this study is accepted. With the recruitment of employees in accordance with their fields and holding training, it will create the readiness of these human resources to face the development of rapidly increasing internal dynamics and produce good quality financial reports.