DETERMINANTS OF THE QUALITY OF LOCAL GOVERNMENT FINANCIAL STATEMENTS IN INDONESIA: COERCIVE PRESSURE DOMINATES

• Published in: Humanities and Social Sciences Letters
• Main Author: Arifin J.; Mohd-Sanusi Z.; Hidayah E.
• Format: Article
• Language: English
• Published: Conscientia Beam 2022
• Online Access: https://www.scopus.com/inward/record.uri?eid=2-s2.0-85137409045&doi=10.18488%2f73.v10i3.3074&partnerID=40&md5=3ddf9dd89733ec259a1e405af41f3948

Many financial statements of the Indonesian local government are still of concern due to the lack of disclosure, and not complying with standards and government regulations. This fact was pointed out in the poor audit results on the local government financial statements released by the Indonesian Supreme Audit Board (SAB). Using the perspective of institutional isomorphism theory, this study aimed to examine various potential factors that affect the quality of Indonesian local government financial statements, including the number of local parliamentarians, the number of civil servants, comparative studies, educational background of regional heads, and the level of urbanization. This study used a sample of 220 local governments in Indonesia taken in 2018. The logistic regression analysis showed that the number of civil servants and the number of local parliamentarians significantly affected the quality of Indonesian local government financial statements. This highlights the influence of coercive pressures on the quality of financial statements of the Indonesian local governments. These findings can serve as input for the Indonesian government in formulating public policies, particularly regarding improving the quality of local government financial statements. © 2022 Conscientia Beam. All rights reserved.