Governance Audit Research Articles

The Effect of Corporate Governance, Leverage and External Audit Quality on Profit Management in Companies Listed on the Idx In 2018-2022

Management, as well as those responsible for all company operational activities, can use their authority to influence financial reports. This research aims to analyze and determine the influence of Corporate Governance, Ownership Structure, Leverage and External Audit Quality on Profit Management in Companies Listed on the Indonesia Stock Exchange (IDX ) in 2018 - 2022. The type of research used is quantitative descriptive. This research uses secondary data from financial reports with documentation techniques. The population in this research are companies listed on the Indonesia Stock Exchange (IDX ) in 2018 - 2022. The sample was determined using the purpose sampling method, so there were 36 (thirty-six) companies studied that met the requirements. Hypothesis testing uses the SEM-PLS (Structural Equation Model – Partial Least Square) program. The research results show that Corporate Governance has a significant influence on Leverage and Profit Management, while others do not. However, leverage does not influence earnings management. Corporate governance significantly influences earnings management, and audit quality does not affect earnings management.

Effect of a case-capped, fee-for-service payment mechanism on accessibility and affordability of health care.

In response to a government audit report in 2021, the Philippine health insurance system transitioned its case-based payment system back into a fee-for-service model capped at individual case rates. This commentary discusses the adverse effects of this policy on health care accessibility and affordability in the country. A rapid review of data shows that it may have resulted in delayed insurance payments, increased denial rates, and reduced coverage, and weakened the strategic purchasing capacity of public health insurance, hugely affecting vulnerable populations and public health care facilities. The commentary calls for a reconsideration of the policy and emphasizes the importance of aligning financial auditing procedures with the needs of health-financing institutions. It advocates for a transformation of audits, moving beyond their traditional role as compliance checks, to become valuable tools supporting a nation's health care purchasing strategies, ultimately benefiting both health care providers and the broader public.

Organizational commitment, religiosity, and auditors’ responsibility for fraud detection

The government auditor plays a crucial role in the oversight and prevention of fraudulent activities inside the government. The examination of elements that influence the auditor's responsibilities in identifying fraud holds significant importance. This is also supported by previous literature, which states that there is quite a lot of understanding related to fraud behavior that has not been explored in the fields of accounting and auditing. This study aims to examine the influence of affective commitment, continuance commitment, normative commitment, and religiosity on the fraud detection responsibility of the auditor. The present study employed a quantitative methodology utilizing a survey-based research design. The participants in this research comprised a sample of 101 government auditors employed at the Audit Board of the Republic of Indonesia. The hypothesis was tested using Structural Equation Modeling-Partial Least Squares (SEM-PLS). The results showed that affective commitment, continuance commitment, normative commitment, and religiosity have a positive influence on the auditor’s responsibility in detecting fraud. This study also confirms the Theory of Planned Behavior (TPB). This research contributes to the development of literature related to behavioral accounting, especially regarding fraud detection responsibility. The implication of this research is that it is important for the audit board, especially human resource management, to consider providing activities that can increase the organizational commitment and religiosity of auditors, which can then be used as motivation for auditors to increase their responsibility in detecting fraud.

Study on the Role of Government Auditing in Promoting Green Accounting and Sustainable Development

Abstract Since the reform and opening up more than forty years ago, China has become the second-largest economy in the world. The rapid economic growth has brought the bitter fruits of an industrialized economy, resulting in serious environmental pollution and over-exploitation of resources, etc. The severe environmental conditions and economic downward pressure have forced the Chinese government and people to pay attention to the sustainable development issue. This paper focuses on the role of government audit in green accounting and sustainable development and proposes two research hypotheses, respectively, that government audit is conducive to enhancing sustainable development and that government audit promotes sustainable development by improving the development of green accounting in enterprises. This paper’s explanatory variables are set by constructing the domain-wide productivity index of the SBM directional distance function. The benchmark regression model and the mediation effect model are both used to test the two hypotheses. The two research hypotheses are verified individually using the empirical analysis method. Combined with the impact of government auditing to promote sustainable development, the role played by the government as a facilitator is analyzed. The correlation coefficient between government auditing and the level of sustainable development is 0.0275, which is significant at the 5% level. And government auditing expenditures can promote the level of sustainable development, which is consistent with hypothesis 1. At the same time, when the intensity of government auditing is less than the threshold value of 2.1525, the impact coefficient of green accounting on sustainable development is −0.0753. When the intensity of government auditing is greater than the threshold value of 2.1525, the impact coefficient is 0.2458, which indicates that when the intensity of government auditing is greater, the regulatory function can play a good role, so the impact of green accounting on the sustainable development of the region plays the incremental dynamic regulatory role, hypothesis 2 is valid.

Multidimensional Attribution and Governance Optimization Path of State Audit to Promote Rural Revitalization in the Information Age

Abstract With the in-depth implementation of the rural revitalization strategy, it is of great significance to study the supervision and governance mechanism of national audit in the implementation of the rural revitalization strategy. As the main components with smaller contribution rates will be discarded when evaluating and analyzing the influencing factors of rural revitalization, it may affect the analytical judgment of the actual problem. Therefore, based on stepwise regression, this paper adopts ridge regression to correct multicollinearity, with the help of the ridge trace diagram to judge the correlation between independent variables intuitively and quickly, and through the ridge calculation as much as possible to retain the independent variables that have a greater impact on rural revitalization. The principal component-ridge regression model is proposed because it takes into account the advantages and disadvantages of various regression methods. To solve the problem of unstable regression coefficients caused by multiple covariances, to analyze the important influencing factors of state auditing on rural revitalization according to the regression coefficients, and to establish the governance optimization path of state auditing to promote rural revitalization. According to the regression results, the government audit variable has a significance level of 1%. The comprehensive governance function of government audit has a regression coefficient of -0.038 that shows significant and negative results at a 1% confidence level. The performance scores of rural sustainability as well as financial dimensions are in the range of 0.8 to 1, which is a good level.

The Role of Governance and Internal Audit in Activating the Role of Oversight over Administrative Institutions to Reduce Corruption and Protect the Environment

The Role of Governance and Internal Audit in Activating the Role of Oversight over Administrative Institutions to Reduce Corruption and Protect the Environment

Research on Corporate Governance and Internal Audit Wisdom Building under Financial Sharing Model Based on Logistic Modeling

Abstract In recent years, the assessment of corporate financial risk has become increasingly significant for banks. Therefore, studying models for corporate financial risk assessment holds substantial practical importance. This paper combines the Logistic model and the Lasso model based on their basic principles to construct an improved Lasso-Logistic regression model. Immediately after that, this paper selects 15 representative indexes from the four aspects of the enterprise’s profitability, solvency, operating ability, and growth ability as the indexes to respond to the company’s financial situation and extracts 4 public factors after factor analysis and analyzes them using the Lasso-Logistic regression model designed in this paper with these 4 public factors as the variables. The results show that the coefficients of public factors F1, F2, F3, and F4 are -2.9513, -1.8347, -1.9659 and -2.2714, respectively, and the coefficients of the four public factors are negative, and the classification accuracy of the Lasso-Logistic combination model in this paper is 89.46%, the misclassification rate of the first category is 6.21%, and the F1 score, RS2 score and AUC values are overall better than the two single models of Lasso and Logistic, the Lasso-Logistic model designed in this paper can well help enterprises assess their own financial risk and make targeted decisions.

INTERNAL CONTROL IN THE PUBLIC SECTOR IN INDONESIA: A CASE STUDY OF STATE TAX RECEIVABLES MANAGEMENT

Abstract— This research focuses on the Internal Control System (SPI) in managing tax collection at the Directorate General of Taxes (DGT). This study is concerned with the effectiveness of internal control in the public sector, especially on the revenue administration of the central government, which is also stated in the Audit Agency (BPK) report. Internal control is vital to maintain the reliability of financial information in an organization. The method used is qualitative, using The DGT as a case study. The novelty of this research lies in its focus on the tax receivable from both internal and the auditor's points of view. Interviews were conducted with the DGT, the Financial Audit Agency (BPK), and the Inspectorate General (Inspektorat Jenderal/Itjen). Data comes from the Central Government Financial Statements (Laporan Keuangan Pemerintah Pusat/LKPP) and Audit Reports (Laporan Hasil Pemeriksaan/LHP). The results of this study show that the SPI in managing tax collection is good, but there is still room for improvement. It is expected that some recommendations for improving the SPI, such as improving the issuance of letters for the implementation of tax receivables to be entirely through the system, limiting the materiality of collecting tax receivables, maximizing tax collections, especially those that will expire, adding an early warning system to detect overdue collections, faster solving suspend data, and data integration, especially with the tax court for appeal decisions and commercial courts for registration of tax receivables to curators.
 Keywords: Audit Report; Central Government Financial Report (LKPP); Internal Control System; Tax Receivables.

The Role of Government Auditing for Combating Corruption and Promoting Integrity in Nepal

The purpose of this article is to analyze the role of government auditing for corruption control and promoting integrity in the public administration of Nepal. This article utilizes content analysis that relies on a systematic literature review of secondary sources from relevant various sources, employing content analysis as the main research strategy. In terms of corruption control, Nepal's government auditing has been playing a crucial role in both preventive and promotional efforts, as well as corrective arrangements. Nevertheless, preventive actions are not always executed. The conclusions show that the government auditing has a major impact on fighting against corruption through Office of the Auditor General Nepal. This study also discovered that the amount of corruption and government performance had a substantial impact on governance. However, this article suggests that the competence of the auditor should be improved for making more responsible in identifying fraud and exposing corruption activities. Thus, if auditing is to play a more prominent role in the fight against corruption, auditing standards shall include specific requirements relating to control corruption, government auditors must co-operate and exchange information with other investigating agencies, auditing techniques should be made more robust to detect corruption, and the auditing profession must embrace effective preventive measures such as anticorruption recognitions and certifications. The article’s findings strongly support the promotion of good governance and the utilization of government auditing and its recommendations to enhance transparency and accountability in Nepal's governance, benefiting political parties, governments, civic organizations, and other stakeholders.

The Influence of Intellectual Intelligence, Eional Intelligence and Role Stress on Auditors' Performance Using Spiritual Intelligence and Religiousity as A Moderation of Research in The Riau Province Indonesia Inspectorate

The research aims to develop a conceptual model of local government auditor performance with intellectual, emotional intelligence, role stress on auditor performance with spiritual intelligence and religiosity as moderation (empirical study at the Riau Province inspectorate). Sample of 123 Inspectorate auditor respondents in Riau Province, Indonesia. SEMwarpPLS software. The results of research on intellectual intelligence, emotional intelligence and role pressure have a positive effect on auditor performance. Meanwhile, the spiritual intelligence moderating variable cannot strengthen intellectual and emotional intelligence on auditor performance and the spiritual intelligence moderating variable can weaken the role of stress on auditor performance. Then religiosity as a moderating variable can influence emotional intelligence and stress can weaken auditor performance. On the other hand, religiosity as moderation cannot strengthen the influence of intellectual intelligence on auditor performance

Does village fund audit affect village development? An empirical study of villages in Aceh Province

It is well-known that additional cases of misappropriating village funds are reported yearly. Without adequate oversight and control, the fraud and corruption trends in village funds will continue to prevail and hinder village development. The increase of funds transferred to villages has failed to eliminate the number of underdeveloped villages in Indonesia, which is still 24.39% nationally and 36,15% in Aceh Province. This study examined whether the local government's audit of village funds positively affects village development as measured by the Village Development Index (IDM) value. The relationship between audits, the number of auditors, and audit fees on village development is examined using a quantitative approach and the regression method. A qualitative technique was also used to gain insights into the implementation of village fund audits. The study found a positive relationship between auditing and audit fees for IDM, while the number of auditors is unrelated to IDM. Compared to unaudited villages, audited villages have higher IDM scores. Despite having a good relationship, the implementation of the audit faced challenges, among others, the lack of legislation, the absence of auditing and accounting standards, the auditor's ambiguous authority, the scarcity of audit resources, and the local government's recklessness in performing their duties.

ISSUES AND CHALLENGES IN DEVELOPING SHARIAH GOVERNANCE AND SHARIAH AUDIT IN ISLAMIC COOPERATIVES

The development of Shariah governance and audit in Islamic Cooperatives in Malaysia is one of the primary concerns since some issues were raised throughout the process. Islamic cooperatives in Malaysia are regulated by Suruhanjaya Koperasi Malaysia (SKM), which aims to encourage the growth of cooperatives that comply with Shariah. Islamic cooperatives operate their business under supervision from SKM regarding governance and Shariah perspective. The development of Shariah governance and Shariah audit support the Shariah compliance system that already operates in most Islamic institutions. During the Shariah governance and audit process, some issues are addressed during the development, which involves guidelines, Shariah auditor competency, staff skills, and governance and Shariah audit of the cooperative sector. The study’s approach included an interview with practitioners from cooperatives, auditors, and experts in the industry. This paper aims to identify the issues and challenges of Shariah governance and Shariah audit in the Islamic cooperative sector. The study will contribute to one of the key critical elements in strengthening the Shariah governance and Shariah audit in the cooperative sector.

The Effect of the Local Government Financial Information Systems and Auditor Competence on Audit Quality

This study aims to determine and analyze the effect of the Local Government Financial Information System and Auditor Competence on Audit Quality. Data collection using questionnaire techniques involved 32 respondents consisting of auditors and PPUPD at the Bantaeng Regency Regional Inspectorate Office. The analysis method used is Multiple Linear Regression Analysis. The results of this study prove that the Local Government Financial Information System and Auditor Competence partially have a positive and significant effect on audit quality. Local Government Financial Information System and Auditor Competence simultaneously affect audit quality by 0.414 or 41.4% . This research can be used as evaluation material for the Internal Government Auditor, especially for the Bantaeng District Inspectorate, in improving the quality of their audits.

Government audit, innovative activities, and green development

ABSTRACTFrom the perspective of national governance, the panel data collected from 30 provinces in China between 2007 and 2019 are used in this paper to empirically test the impact of government audits on green development. Also, multiple models are applied to explore its underlying mechanism from the perspective of innovative activities. The research results show that government audit plays a significant role in promoting green development, which holds even after robustness tests are conducted either by replacing government audit indicators, adopting the GMM system model, applying Heckman’s two-stage model, or using micro-enterprise data. From an economic point of view, innovation plays a major part in promoting green development through government audits. There is also a significant trend of regional heterogeneity as shown in the effect of government audits on green development. The promoting effect reaches a more significant extent in the eastern region than in other regions. According to the results of a further expansion analysis, government auditing exerts significant non-linear effects and spatial spillover effects on green development.

Implikasi Peran Auditr Internal Dalam Tata Kelola Perusahaan

The internal audit function continues to evolve in line with changes in the business environment. In Europe, the challenging business environment is closely related to risks and corporate governance issues. As a result, a shift in the internal audit function in addressing corporate governance issues demands greater independence from the function. Responding to the need for a more independent internal audit function, a decision regarding the appointment and dismissal of the head of the internal audit and his remuneration is required, which must be approved by the supervisor. These changes indicate that the role of internal audit in the governance management relationship has changed. This research provides an overview of these changes, the trends toward an increasing role of internal audit in corporate governance, the expected benefits of internal audit independence organizations, and the future challenges in European countries.

The implementation of a whistleblowing system as an anti-corruption initiative in Indonesian government institutions

Whistleblowing is viewed as a powerful tool to identify corruption. Apart from motivation, beha-viour, and the rights of whistleblower protection, as success factors of whistleblowing programs, current research argues that it is hard to expect the emergence of whistleblowers if channels to report wrongdoing do not exist. Hence, the purpose of this study is to explore and explain the provision of whistleblowing policy and the range of whistleblowing systems and their channels as an anti-corruption initiative in Indonesian government institutions. The research utilised content analysis from secondary data and analys-ed primary data obtained through online survey completed by government auditors working in Indonesian government institutions. Indonesia has at least 618 government institutions, whereby the researcher chose the most “valuable” sample based on a hierarchy of 104 institutions from central government and provincial level; it excludes government institutions at the district and municipal level, 44 questionnaires were returned and usable (42% response rate). The research found that from these institutions, just a few have had a policy that aligned with international best practice, some were not even backed up by a policy at all. It appears that many institutions have built a whistleblowing system for lip service only; they do not provide a comprehensive policy to protect the witness, handle the report, or guarantee an investigation. Research outcomes are expected to encourage the Indonesian government to extend whistleblowing provisions in their institutions. This study can be useful as well for government institutions to get a general idea of the common content of whistleblowing policies.

TINGKAT RESPONSIVITAS MEMODERASI: KARAKTERISTIK PEMERINTAH DAERAH, TEMUAN HASIL PEMERIKSAAN DAN KINERJA KEUANGAN

This research aims to examine the influence of local government characteristics and audit findings on financial performance moderated by the level of local government responsiveness. The population and sample are 180 districts and cities. secondary data from inspection reports. Financial reports audited by BPKRI from 2017 to 2019. Panel data regression analysis technique, eviews data processing software with a random effect model. The results show that legislative measures, SPI weaknesses and non-compliance with statutory regulations have no effect on financial performance. Meanwhile, government size and level of wealth have a significant effect on financial performance. The level of responsiveness cannot strengthen the influence of legislative measures, SPI weaknesses and non-compliance with statutory regulations on financial performance. Meanwhile, the level of responsiveness can strengthen the influence of government size and the level of regional government wealth on financial performance.

Revisiting Local Government Auditors’ Burnout upon its Stress Dimensions

Purpose: This study aims to ‎determine the effect of three-dimensional stress, known as the roles of stress, to predict ‎the likelihood of occupational stress and burnout complication among local government ‎auditors. Theoretical framework: This study utilized the Conservation of Resource Theory as a theoretical lens to ‎determine the effect of three-dimensional stress, known as the roles of stress, to predict ‎the likelihood of occupational stress and burnout complication among local government ‎auditors. Design/Methodology/Approach: Quantitative non-linear modelling involved three hundred and twenty-six ‎questionnaires from being sent to the regional inspectorate in the Bali area between June - July 2022. Findings: The study successfully proved the significant effect of role ambiguity and role ‎overload as influential factor of auditors’ stress. The study also proves the empirical ‎relationship between auditor stress and burnout. Further, this research concludes that various ‎mediation effects of stress exist between dimensional stress and burnout among auditors. Research, Practical & Social implications: This ‎study is expected to give strategic recommendations for the respectful government agencies ‎to develop better stress-handling techniques. Originality/Value: The influential factor of the role of ambiguity which is significantly elevated job burnout, might become a novelty for this research’s finding, the complication of ambiguity in the context of forming the passive level of stress known as burnout stipulates the profound problems of ambiguity in the auditor context.

Auditor practices and auditee responses to corporate governance audit regulation in Nigeria

PurposeThe purpose of this study is to examine both the responses of auditees to corporate governance audit (CGA) regulation and the practices of CGA auditors.Design/methodology/approachThe study used a mixed method. Content analysis of 200 annual and CGA reports was carried out for 13 years, from 2008 to 2021, split into voluntary disclosure and mandatory disclosure periods. Quantitative analysis was also conducted using Kruskal–Wallis and Dunn's tests. Data gathered were interpreted through the lens of isomorphism and Oliver's (1991) strategic responses to institutional processes.FindingsThe study revealed that in the voluntary disclosure period, auditees responded mainly with acquiescence, motivated by mimetic isomorphic pressure. In the mandatory disclosure period, auditee responses ranged from acquiescence to dismissal of corporate governance regulation (i.e. coercive isomorphic pressure). Auditor reporting of CGA findings was found to be heterogeneous, suggesting that normative and mimetic isomorphism did not homogenize auditor practices.Practical implicationsThe absence of uniform auditee responses to CGA regulation during the mandatory disclosure period suggests that the purpose of mandating the regulation has not yet been achieved and may signal inadequate coercive isomorphic pressure from the Financial Reporting Council of Nigeria (FRCN). Similarly, heterogeneous reporting of CGA findings by corporate governance auditors inhibits the comparability of audit findings, limiting their value for information users.Originality/valueThis study examines corporate governance auditor practices and auditee responses to corporate governance audit regulation.

Governance and Audit Quality: Can Improve Earnings Quality?

Purpose: This study aims to examine the effect of governance structure and audit quality on earnings quality. Methodology/Approach: 74 manufacturing companies listed on the Indonesia Stock Exchange (IDX) from 2011 to 2019 was selected using purposive sampling and used to test the hypotheses. The data was analyzed using OLS within multiple linear regression approach. Findings: Regression results showed independent commissioners and numbers of audit committee meetings improved earnings quality in large-sized manufacturing companies. This study also found that institutional ownership has no effect on earnings quality. Likewise, audit quality, as reflected by size of the public accounting firm, has no effects on earnings quality. Practical Implications: The results provide information about the importance of independent commissioners in keeping good earnings quality. These findings can be used either by the government or investors to strengthen the role of independent commissioners. Also, the government can regulate the minimum number of audit committee meetings to overcome low-income quality problems. Originality/value: This study proved that internal independence mechanism is the crucial one to attain a high level of earnings quality. Also, this study differentiates the effect of predictors by company’s size.