Public Sector Financial Management Reform: A Case Study of Local Government Agencies in Indonesia

Monir MIR, Wahyu SUTIYONO

Research output: Contribution to journalArticle

4 Downloads (Pure)

Abstract

Indonesia has taken initiatives to reform its public sector financial management. One of the reform agendas was to introduce ‘cash to accrual’ accounting for improved financial reporting. It is expected that improved financial reporting will enhance financial accountabilities of the governmental agencies and will assist both internal and external decision makers whose decisions will be based on the financial reports. However, it has been observed that there is a significant increase in the number of qualified audit reports when these financial reports were audited. This also means that these financial reports are lacking in providing true and fair views on the financial activities of the governmental agencies, thereby not assisting in discharging their accountabilities. This study seeks to answer the question as to why the numbers of qualified audit reports have increased despite the existence of various governmental accounting reform agendas. Based on the in-depth case studies of three Indonesian local governments, it is found that the demand, the supply and the quality assurance of the accounting information outputs in these local governments are not in parity, and this lacking in parties actually has impacted in producing unqualified and usable accounting reports
Original languageEnglish
Pages (from-to)97-117
Number of pages21
JournalAustralasian Accounting, Business and Finance Journal
Volume79
Issue number4
DOIs
Publication statusPublished - 2013

Fingerprint

Indonesia
Financial reporting
Agenda
Qualified audit reports
Financial management
Accountability
Government agencies
Public sector
Local government
Public sector reform
Governmental accounting
Quality assurance
Parity
Decision maker
True and fair view
Accrual accounting
Accounting information
Cash

Cite this

@article{19a82d1d6f5643199998814abef07c9d,
title = "Public Sector Financial Management Reform: A Case Study of Local Government Agencies in Indonesia",
abstract = "Indonesia has taken initiatives to reform its public sector financial management. One of the reform agendas was to introduce ‘cash to accrual’ accounting for improved financial reporting. It is expected that improved financial reporting will enhance financial accountabilities of the governmental agencies and will assist both internal and external decision makers whose decisions will be based on the financial reports. However, it has been observed that there is a significant increase in the number of qualified audit reports when these financial reports were audited. This also means that these financial reports are lacking in providing true and fair views on the financial activities of the governmental agencies, thereby not assisting in discharging their accountabilities. This study seeks to answer the question as to why the numbers of qualified audit reports have increased despite the existence of various governmental accounting reform agendas. Based on the in-depth case studies of three Indonesian local governments, it is found that the demand, the supply and the quality assurance of the accounting information outputs in these local governments are not in parity, and this lacking in parties actually has impacted in producing unqualified and usable accounting reports",
author = "Monir MIR and Wahyu SUTIYONO",
year = "2013",
doi = "10.14453/aabfj.v7i4.7",
language = "English",
volume = "79",
pages = "97--117",
journal = "Australasian Accounting, Business and Finance Journal",
issn = "1834-2000",
publisher = "University of Wollongong",
number = "4",

}

Public Sector Financial Management Reform: A Case Study of Local Government Agencies in Indonesia. / MIR, Monir; SUTIYONO, Wahyu.

In: Australasian Accounting, Business and Finance Journal, Vol. 79, No. 4, 2013, p. 97-117.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Public Sector Financial Management Reform: A Case Study of Local Government Agencies in Indonesia

AU - MIR, Monir

AU - SUTIYONO, Wahyu

PY - 2013

Y1 - 2013

N2 - Indonesia has taken initiatives to reform its public sector financial management. One of the reform agendas was to introduce ‘cash to accrual’ accounting for improved financial reporting. It is expected that improved financial reporting will enhance financial accountabilities of the governmental agencies and will assist both internal and external decision makers whose decisions will be based on the financial reports. However, it has been observed that there is a significant increase in the number of qualified audit reports when these financial reports were audited. This also means that these financial reports are lacking in providing true and fair views on the financial activities of the governmental agencies, thereby not assisting in discharging their accountabilities. This study seeks to answer the question as to why the numbers of qualified audit reports have increased despite the existence of various governmental accounting reform agendas. Based on the in-depth case studies of three Indonesian local governments, it is found that the demand, the supply and the quality assurance of the accounting information outputs in these local governments are not in parity, and this lacking in parties actually has impacted in producing unqualified and usable accounting reports

AB - Indonesia has taken initiatives to reform its public sector financial management. One of the reform agendas was to introduce ‘cash to accrual’ accounting for improved financial reporting. It is expected that improved financial reporting will enhance financial accountabilities of the governmental agencies and will assist both internal and external decision makers whose decisions will be based on the financial reports. However, it has been observed that there is a significant increase in the number of qualified audit reports when these financial reports were audited. This also means that these financial reports are lacking in providing true and fair views on the financial activities of the governmental agencies, thereby not assisting in discharging their accountabilities. This study seeks to answer the question as to why the numbers of qualified audit reports have increased despite the existence of various governmental accounting reform agendas. Based on the in-depth case studies of three Indonesian local governments, it is found that the demand, the supply and the quality assurance of the accounting information outputs in these local governments are not in parity, and this lacking in parties actually has impacted in producing unqualified and usable accounting reports

U2 - 10.14453/aabfj.v7i4.7

DO - 10.14453/aabfj.v7i4.7

M3 - Article

VL - 79

SP - 97

EP - 117

JO - Australasian Accounting, Business and Finance Journal

JF - Australasian Accounting, Business and Finance Journal

SN - 1834-2000

IS - 4

ER -