AUDIT FINDINGS:

DETERMINANTS AND
CONNECTION TO THE
QUALITY OF LOCAL
GOVERNMENT FINANCIAL
STATEMENTS IN INDONESIA

MASCULINE MUHAMMAD MUQOROBIN

TOTOK SUSILO PAMUJI NUGROHO

Background
Local Government Finance Report
(LGFR) is a form of regional government
accountability report to the community in
running credible as manager of government
in the form of accounting numbers

Objective
This study aims to find empirical
evidence about the determinants and
relationship to the quality of the financial
statements of Local Government in
Indonesia in 2010

Fundamental Theory

Agency Theory
Local Government Finance Report
(LGFR)
Communication audits
Characteristics of Local Government

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

Research Framework

Hypothesis Development
H1 Size of Local Government in Indonesia
Positive or Negative Impact on the
Number
of Audit Findings on Local Government Finance
Report (LGFR)
H2 Total Assets of Local Government in
Indonesia Positive
Impact on the Number of
Audit Findings on Local
Government
Finance Report (LGFR)
H3 BPK Audit Opinion Negative Impact on the
Number of Audit Findings on Local Government
Finance Report (LGFR)

Research Method
Design Research / Research Type and
Sampling Technique

Use Sekunder Data

The financial data was obtained from the
Local Government Finance Report (LGFR)
that have been audited and published by the
Supreme Audit Agency in the form of Audit
Reports

Research Method
Operational Definition of Variables
Dependen Variabel
Independen Variabel

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

ANALYSIS AND DISCUSSION

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

ANALYSIS AND DISCUSSION

Sample
Table IV.1
Samples and observations in the study
Local Government Finance Report (LGFR) fiscal year 2010 in Indonesia

542

Local Government Finance Report (LGFR) fiscal year 2010 in

62

Indonesia, which is not accessible

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

ANALYSIS AND DISCUSSION

Data
The data in this study is the Local
Government Finance Report (LGFR)
Provincial, Regency / City in Indonesia,
published by the official website of the Audit
Board of the Republic of Indonesia (BPK-RI)

ANALYSIS AND DISCUSSION

Descriptive Analysis

Hypothesis Testing
Multiple Regression Analysis
Regression Models

Hypothesis Testing
Multiple Regression Analysis

Determination Coefficient

Hypothesis Testing
Multiple Regression Analysis
Individual Parameter Significance Test (Test Statistic t)

Discussion
1. Influence of Local Government Size in
Indonesia to Total Audit Findings on Local
Government Finance Report (LGFR)
2. Effect of Total Assets of Local Government
in Indonesia on Audit Findings on Local
Government Finance Report (LGFR)
3. Effect of CPC on the Audit Opinion Audit
Findings on Local Government Finance
Report (LGFR)

Conclusion
Results of this study showed evidence
that the number of BPK audit findings
significantly affected significantly and
moderately by 2 of the 3 variables of the
study. These variables include the local
government revenue, and BPK audit opinion
on the Financial Statements of Local
Government.

Limitation
Study only used data Local Government
Finance Report (LGFR) fiscal year 2010
Data Local Government Finance Report
(LGFR) the other of which is not
accessible because the data has been
damaged, lost, or deleted due to technical
errors, thereby reducing the sample

Future Research
For future studies, the researchers
suggested that using more precise
measurements again in measuring and
hubungannta determinant of the quality of
the financial statements of Local
Government in Indonesia in 2010 by using
the Government Accounting Standards
(GAS) is a new, namely Regulation 71 of
2011 on the Government Accounting
Standards accrual will apply a full accrual

THANK YOU