The Effectiveness of the Role of Internal Control System in the Preparation of Regional Financial Statements

Khikmatul Islah,Cundo Harimurti,Miroslaw Matyja

doi:10.52728/ijss.v3i1.427

Abstract

The existence of regional autonomy supports changes in various sectors, including changes in financial management. This is evidenced by the birth of three packages of laws in the field of state finance, namely: Law Number 17 of 2003 concerning State Finance; Law Number 1 of 2004 concerning the State Treasury; and Law Number 15 of 2004 concerning Examination of the Management and Accountability of State Finances. These three packages of laws regulate the management of state finances more democratically and regulate sanctions for managers of state finances. To support the implementation of regional autonomy in financial management, it is necessary to anticipate deviations in the preparation of financial statements. This study aimed to analyze the Effectiveness of the Role of the Internal Control System in the Preparation of Regional Financial Reports. The research approach is a descriptive qualitative approach. The method of analysis uses a literature study. The study results on the Effectiveness of the Role of the Internal Control System in the Preparation of Regional Financial Reports indicate that the internal control system has an effective role in preparing regional financial reports. But this internal control system cannot be said to be perfect. The internal control system still has limitations because this control system is a form of prevention, reduction, improvement of deviations.

Highlights

In the government sector, the preparation of financial reports is an obligation that must be done to account for financial activities to the public/community (Fuentes & Borreguero, 2018)
Before developing into a dynamic and integrated Government Internal Control System (SPIP), the internal control mechanism was known as inherent supervision, static and independent
Based on the results and discussion, it can be concluded that the internal control system has an effective role in preparing regional financial reports

Summary

Introduction

The preparation of financial reports is an obligation that must be done to account for financial activities to the public/community (Fuentes & Borreguero, 2018). The Effectiveness of the Role of Internal Control System in the Preparation of Regional Financial Statements Islah, Harimurti, Matyja forming the quality of financial statement information consists of (a) relevant, (b) reliable, (c) can be compared, and (d) understandable. Factors that affect the cleverness of the preparation of regional financial statements are inadequate human resource capacity, limited government employees with accounting backgrounds make the lack of understanding or mastery of the Regional Device Work Unit apparatus in managing regional finances properly and correctly resulting in waste of materials, time and energy. The capacity of human resources to prepare financial statements that meet the characteristics of reliability is significant. The capacity of human resources to prepare financial statements that meet the characteristics of reliability is significant. (Ala, 2020; Turwirdani, 2015)

Objectives

Methods

Results

Conclusion