Determinants of Transparency of Local Government Financial Reports in Indonesia

• Published in: Accounting & finance (Kiev, Ukraine) Ukraine), 2024-09 (3(105)), p.120-131
• Main Authors: Saputri, Diah Ragil, Pujiningsih, Sri, Utami, Helianti
• Format: Article
• Language: eng ; ger
• Subjects: agency theory; financial statement; gender; legitimacy theory; local government; transparency
• ISSN: 2307-9878; 2518-1181
• DOI: 10.33146/2307-9878-2024-3(105)-120-131

Transparency is the goal of e-government in Indonesia, but many local governments still do not publicly disclose their financial reports. Thus, transparency in Indonesia is still low, especially as corruption cases are increasingly prevalent in government. This study aims to analyze the factors that affect the transparency of local government financial reports in Indonesia. The research population comprises all provincial governments in Indonesia. Sampling was conducted using a purposive sampling method based on the criteria of provincial governments in Indonesia that have official websites and provide access to local government financial reports for the fiscal years 2019-2022, so 84 research samples were obtained. The collected data for the analysis were secondary data obtained from financial reports published by local self-government bodies and the Central Statistical Agency (BPS) for 2019-2022. The data includes information on local government size, audit opinion, debt, gender, education level of the regional head, commitment of the regional head, regional wealth and intergovernmental transfers. This study uses the logistic regression analysis method to determine the effect of various variables on the transparency of local government financial reports. The results showed that the size of the local government and the commitment of the regional head positively affected the transparency of financial statements. However, the variables of audit opinion, debt and gender did not show a significant effect. In contrast, the education level of the regional head, regional wealth and intergovernmental transfers negatively influence the transparency of local government financial statements. This study provides important insights for policymakers in improving financial statement transparency at the local government level.