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Strengthening Financial Reporting Quality: The Role of Rule of Law, Public Transparency, and Cultural Change as a Moderator

Author

Listed:
  • Novi Natalia Padang

    (Department of Accounting, Faculty of Economics and Business, Universitas Sumatera Utara, Medan, Indonesia)

  • Idhar Yahya

    (Department of Accounting, Faculty of Economics and Business, Universitas Sumatera Utara, Medan, Indonesia)

  • Badaruddin

    (Department of Sociology, Faculty of Social and Political Sciences, Universitas Sumatera Utara, Medan, Indonesia)

  • Nurlinda

    (Department of Accounting, Politeknik Negeri Medan, Indonesia)

Abstract

Purpose – The purpose of this study is to investigate how the Indonesian General Election Commission’s financial reports are affected by the rule of law, transparency, and cultural shift. From a decision sciences perspective, this study provides a quantitative framework for policymakers to allocate resources effectively by identifying critical determinants of financial reporting quality. Unlike previous studies that focus solely on accounting standards, this research uniquely integrates cultural change as a moderating variable within the public sector context, offering a novel behavioral perspective on financial accountability. From a decision sciences perspective, this study provides a quantitative framework for policymakers to allocate resources effectively by identifying critical determinants of financial reporting quality. Design/methodology/approach – This quantitative study employs PLS-SEM. Key members of the Election Commission’s finance and administration staff were surveyed to gather primary data, while the Supreme Audit Agency’s financial audit report provided secondary data. Findings – The findings demonstrate that transparency (β = 0.419, p

Suggested Citation

  • Novi Natalia Padang & Idhar Yahya & Badaruddin & Nurlinda, 2025. "Strengthening Financial Reporting Quality: The Role of Rule of Law, Public Transparency, and Cultural Change as a Moderator," Advances in Decision Sciences, Asia University, Taiwan, vol. 29(2), pages 138-167, December.
    • Handle: RePEc:aag:wpaper:v:29:y:2025:i:2:p:138-167
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    References listed on IDEAS

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    1. Filippo Vitolla & Nicola Raimo & Michele Rubino & Antonello Garzoni, 2019. "How pressure from stakeholders affects integrated reporting quality," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(6), pages 1591-1606, November.
    2. Wing-Keung Wong & Minh Tam Pham, 2025. "Could the Correlation of A Stationary Series With A Non-Stationary Series Obtain Meaningful Outcomes?," Annals of Financial Economics (AFE), World Scientific Publishing Co. Pte. Ltd., vol. 20(03), pages 1-32, September.
    3. Ibtihal A. Abed & Nazimah Hussin & Mostafa A. Ali & Hossam Haddad & Maha Shehadeh & Elina F. Hasan, 2022. "Creative Accounting Determinants and Financial Reporting Quality: Systematic Literature Review," Risks, MDPI, vol. 10(4), pages 1-25, April.
    4. Redeemer Krah & Gerard Mertens, 2020. "Democracy and financial transparency of local governments in Sub-Saharan Africa," Meditari Accountancy Research, Emerald Group Publishing Limited, vol. 28(4), pages 681-699, March.
    5. Yuxuan Li & Xin Miao & Dequan Zheng & Yanhong Tang, 2019. "Corporate Public Transparency on Financial Performance: The Moderating Role of Political Embeddedness," Sustainability, MDPI, vol. 11(19), pages 1-17, October.
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    Keywords

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    JEL classification:

    • K16 - Law and Economics - - Basic Areas of Law - - - Election Law
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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