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AUDIT FINDINGS:DETERMINANTS ANDCONNECTION TO THEQUALITY OF LOCAL

GOVERNMENT FINANCIALSTATEMENTS IN INDONESIA

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MASCULINE MUHAMMAD MUQOROBIN

TOTOK SUSILO PAMUJI NUGROHO

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Background

Local Government Finance Report(LGFR) is a form of regional governmentaccountability report to the community inrunning credible as manager of governmentin the form of accounting numbers

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Objective

This study aims to find empiricalevidence about the determinants andrelationship to the quality of the financialstatements of Local Government inIndonesia in 2010

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Fundamental Theory

Agency Theory Local Government Finance Report

(LGFR) Communication audits Characteristics of Local Government

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Previous Research

1. Manson (2001)2. Doyle,Ge & McVay (2007)

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Research Framework

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Hypothesis Development

H1 Size of Local Government in IndonesiaPositive or Negative Impact on the Numberof Audit Findings on Local Government Finance

Report (LGFR)H2 Total Assets of Local Government inIndonesia Positive Impact on the Number of

Audit Findings on Local GovernmentFinance Report (LGFR)

H3 BPK Audit Opinion Negative Impact on theNumber of Audit Findings on Local Government

Finance Report (LGFR)

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Research Method

Design Research / Research Type andSampling Technique

Use Sekunder DataThe financial data was obtained from theLocal Government Finance Report (LGFR)that have been audited and published by theSupreme Audit Agency in the form of AuditReports

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Research Method

Operational Definition of Variables

Dependen Variabel

Independen Variabel

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Research Method

Methods of Data Analysis

This study uses multiple regression statistic

Framework and hypothesis will be tested by

the following regression equation:FIND = 0 + 1 + 2 ASSET PAD + 3 + Opin

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ANALYSIS AND DISCUSSION

Population

All Provincial Government, District / City inIndonesia consists of 34 provinces, 410districts, and 98 cities

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ANALYSIS AND DISCUSSION Sample

Local Government Finance Report (LGFR) fiscal year 2010 in Indonesia 542

Local Government Finance Report (LGFR) fiscal year 2010 in

Indonesia, which is not accessible

62

The total sample obtained 480

Consists of:

Local Government Finance Report (LGFR) Province in 2010 budget 29

Local Government Finance Report (LGFR) District 2010 budget year 369

Local Government Finance Report (LGFR) City of fiscal year 2010 82

Total 480

Table IV.1 Samples and observations in the study

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ANALYSIS AND DISCUSSION

Data

The data in this study is the LocalGovernment Finance Report (LGFR)Provincial, Regency / City in Indonesia,published by the official website of the AuditBoard of the Republic of Indonesia (BPK-RI)

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ANALYSIS AND DISCUSSION

Descriptive Analysis

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Hypothesis Testing

Multiple Regression Analysis

Regression Models

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Hypothesis Testing Multiple Regression Analysis

Determination Coefficient

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Hypothesis Testing

Multiple Regression Analysis

Individual Parameter Significance Test (Test Statistic t)

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Discussion

1. Influence of Local Government Size inIndonesia to Total Audit Findings on LocalGovernment Finance Report (LGFR)

2. Effect of Total Assets of Local Governmentin Indonesia on Audit Findings on LocalGovernment Finance Report (LGFR)

3. Effect of CPC on the Audit Opinion AuditFindings on Local Government FinanceReport (LGFR)

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Conclusion

Results of this study showed evidencethat the number of BPK audit findingssignificantly affected significantly andmoderately by 2 of the 3 variables of thestudy. These variables include the localgovernment revenue, and BPK audit opinion

on the Financial Statements of LocalGovernment.

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Limitation Study only used data Local Government

Finance Report (LGFR) fiscal year 2010 Data Local Government Finance Report

(LGFR) the other of which is notaccessible because the data has beendamaged, lost, or deleted due to technicalerrors, thereby reducing the sample

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Future Research

For future studies, the researcherssuggested that using more precisemeasurements again in measuring andhubungannta determinant of the quality ofthe financial statements of LocalGovernment in Indonesia in 2010 by using

the Government Accounting Standards(GAS) is a new, namely Regulation 71 of2011 on the Government Accounting

Standards accrual will applya full accrual

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THANK YOU