Abstract
<p><em>This study is aimed to analyze the effect of financial performance indicators such as absorption of local expenditure ratio, effectiveness ratio, and financial independence ratio </em><em>on </em><em>the disclosure compliance of financial information on the website, as well as audit opinion as moderating variable. The sample of the study is the local governments in Java with consisting of 81 selected local governments within three years period. The data are analyzed with multiple regression analysis using the fixed-effect method.</em></p><p><em>The results show that the absorption of the local budget ratio cannot encourage the disclosure compliance of financial information on the website. While the effectiveness ratio and the financial independence ratio </em><em>are positively associated with</em><em> the disclosure compliance of financial information on the website. This study also finds that audit opinion </em><em>weakens</em><em> the effect of financial independence ratio on the disclosure compliance of financial information on the website. However, audit opinion cannot moderate the effect of absorption of local budget ratio and the effectiveness ratio on the disclosure compliance of financial information on the website</em><em>. </em><em></em></p><strong><em>Keywords: </em></strong><em>audit opinion; financial performances, information</em>
Highlights
The reform of the state financial sector has been started since the acts regulating state finance were enacted
The average of the compliance disclosure of financial information on the local government websites (IFR) in Java Island for the period 2012 until 2014 is 0.2444. This means that the average local government in Java Island providing the disclosure of financial information on the website is only 24.44% of the provisions of Instruction of Minister of Home Affairs
The result suggests that the level of disclosure compliance with financial information on the website of the local government in the area of Java during 2012 s.d. 2014 is still low
Summary
The reform of the state financial sector has been started since the acts regulating state finance were enacted. Those acts are expected to increase accountability and transparency in terms of the state financial management. The Indonesian citizens demand that public sector organizations must improve its quality, professionalism, and accountability in conducting the government programs. It encourages that audit conducted to fulfill compliances and to asses the performances (Badjuri and Trihapsari, 2004). To measure how well the government's financial performance can be conducted by calculating contained numbers in the financial statements using financial
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