Incentive Function of Audit Opinion for the Increase of Regional Operational Expenditure and Own-Source Revenues Through Sensitivity Analysis in Indonesia

Abdullah, Muhammad Ikbal; Furqan, Andi Chairil; Yamin, Nina Yusnita; Oktora, Fahri Eka

doi:10.5430/rwe.v11n1p20

Cited by 4 publications

(2 citation statements)

References 18 publications

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“…Liu & Lin (2012) found that the audit findings presented by the auditors have a positive effect on the level of corruption in China, where efforts to improve the post- audit findings can reduce the level of corruption that occurs. In order to encourage an increase in the target of unqualified opinions, it is expected that the central government can provide incentive funds to regional governments that get unqualified opinions to maximize their capacity to increase financial accountability (Abdullah et al, 2020).…”

Section: Discussionmentioning

confidence: 99%

Antecedents of the Accountability in Indonesian Local Government Financial Reporting

Abdullah

Sudirman

Masdar

et al. 2022

J. Professional Business Review

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Purpose: This study aims to analyze the role of the government’s budget supervision on financial accountability to reduce fraud against the local government budgets. Theoretical framework: The theoretical framework from Gabrini (2013) highlights the importance for organizations to design and manage financial reports and audits to maintain legitimacy, along with the increasing demands for transparency and accountability of public organizations today. Design/methodology/approach: To achieve this goal, the data used in this study is secondary data sourced from the central and regional government’s auditing board between 2016 to 2019. Findings: The results showed that budget supervision negatively affects the accountability of local government financial reports. Moreover, a follow-up audit has a negative effect on the fraud against the local government budget and has a positive effect on financial accountability. The results also demonstrated a negative effect of financial accountability on the fraud against local government budget. Research, Practical & Social implications: As the implication, the government is expected to draft an implementing regulation as a technical guideline to avoid fraud against the government budget. In order to encourage an increase in the target of unqualified opinions, it is expected that the central government can provide incentive funds to regional governments that get unqualified opinions to maximize their capacity to increase financial accountability. Originality/value: This research is among the first in empirically examinating the full mediating effect of financial accountability in the relationship between budget supervision and the fraud against local government budget in Indonesia.

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Section: Discussionmentioning

confidence: 99%

Antecedents of the Accountability in Indonesian Local Government Financial Reporting

Abdullah

Sudirman

Masdar

et al. 2022

J. Professional Business Review

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“…According to the 1945 Constitution, the institution assigned the task of auditing state and regional finances is the Financial Audit Agency (BPK) According to Table 1.1, 83 percent of LKPDs received a WTP opinion between 2016 and 2020. Audit opinions reflect the performance of local governments in realizing regional operational expenditures (Abdullah et al, 2020;Kahar et al, 2023). The quality of Local Government Financial management can maintain the economic stability of a region (Craja et al, 2020;Mabelane et al, 2023).…”

Section: Introductionmentioning

confidence: 99%

The Effect of Audit Findings, Follow-Up Audit Recommendations, And BPK Opinions from The Previous Year on The Determination of Opinions in Local Government Financial Statements

Mainingrum

Sjarlis

Oktaviani

et al. 2023

Econ. Bus. Account. Soc. Rev

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This study aims to analyze the effect of audit findings, follow-up on audit recommendations from the Supreme Audit Agency (BPK RI) and audit opinion from previous year on the determination of audit opinions on local government financial statements. The historical data of 24 local governments in South Sulawesi for the period 2016 - 2020 related to the examination of local government financial statements is used in this study. The results of the study found that: 1) There was a positive but not significant effect on the opinion of the Audit Findings on the determination of the audit opinion of the district government in South Sulawesi, 2) there was a positive and significant effect of follow-up on the recommendations of the audit results of local government in South Sulawesi, and 3) there was a negative and significant effect of the previous year audit opinion on the opinion of the local government financial statements.

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Auditor’s skepticism, forensic accounting, investigation audit and fraud disclosure of corruption cases

Laupe

Abdullah

Kahar

et al. 2022

JGR

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This study aims to develop a fraud disclosure model for corruption cases in the local government environment in Sulawesi through forensic accounting and investigative audits with internal auditor skepticism as moderating. Forensic accounting and investigative auditing are a series of relationships in the examination of fraud. Fraud becomes the main object that is fought in forensic accounting and is proven in investigative audits. This research was conducted by distributing questionnaires to all auditors at Finance and Development Supervisory Agency or Badan Pengawasan Keuangan dan Pembangunan (BPKP), Audit Board of the Republic of Indonesia or Badan Pemeriksa Keuangan (BPK), and internal auditors at Social Security Agency or Badan Penyelenggara Jaminan Sosial Kesehatan (BPJS Kesehatan) throughout Indonesia. The number of respondents whose opinions can be used for this study amounted to 118 questionnaires. The results showed that forensic accounting can reduce the level of disclosure of fraud. The results of other research studies also show that good investigative audit practices by auditors can reduce the level of fraud disclosure. Auditor skepticism in auditing practices can strengthen the forensic accounting relationship which results in a reduced level of fraud disclosure and investigative audit relationships which results in a reduced level of fraud disclosure.

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Incentive Function of Audit Opinion for the Increase of Regional Operational Expenditure and Own-Source Revenues Through Sensitivity Analysis in Indonesia

Cited by 4 publications

References 18 publications

Antecedents of the Accountability in Indonesian Local Government Financial Reporting

Antecedents of the Accountability in Indonesian Local Government Financial Reporting

The Effect of Audit Findings, Follow-Up Audit Recommendations, And BPK Opinions from The Previous Year on The Determination of Opinions in Local Government Financial Statements

Auditor’s skepticism, forensic accounting, investigation audit and fraud disclosure of corruption cases

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