IDEAS home Printed from https://ideas.repec.org/a/eco/journ1/2019-06-19.html

Improving Quality of Financial Reporting Through Good Government Governance and Effectiveness of Internal Audit

Author

Listed:
  • Cecilia Lelly Kewo

    (Faculty of Economics, Manado State University, Indonesia)

  • Nova Ch Mamuaya

    (Faculty of Economics, Manado State University, Indonesia)

Abstract

Issue that has arisen today in the management of public administration is good governance. Good governance can enhance organizational leadership, management and supervision, produce more effective interventions, and ultimately lead to better outcomes with improved community life. One of the form of government governance is financial statement accountability. The purpose of this study to provide empirical evidence regarding the effects of government governance and the effectiveness of internal audits on quality of financial statements. Sources of data obtained through field research conducted through observation, interviews and questionnaires and literature study. Data collection was conducted from March to July 2019 at the offices of regional work units in 8 districts / cities in the province of North Sulawesi, Indonesia. Returns the questionnaire at 58% of the amount distributed. Data collected were analyzed using Structural Equation Modeling with the path analysis method approach. The results showed that with an error rate of 0.05, good governance partially had a positive effect on the quality of the financial statements, the effectiveness of internal audit had a positive effect on the financial statements. Simultaneously good governance and the effectiveness of internal audit have a positive effect on the quality of local government financial reports.

Suggested Citation

  • Cecilia Lelly Kewo & Nova Ch Mamuaya, 2019. "Improving Quality of Financial Reporting Through Good Government Governance and Effectiveness of Internal Audit," International Journal of Economics and Financial Issues, International Journal of Economics and Financial Issues, vol. 9(6), pages 156-162.
    • Handle: RePEc:eco:journ1:2019-06-19
    as

    Download full text from publisher

    File URL: https://www.econjournals.com/index.php/ijefi/article/download/8734/pdf
    Download Restriction: no
    File URL: https://www.econjournals.com/index.php/ijefi/article/view/8734/pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Aaron Cohen & Gabriel Sayag, 2010. "The Effectiveness of Internal Auditing: An Empirical Examination of its Determinants in Israeli Organisations," Australian Accounting Review, CPA Australia, vol. 20(3), pages 296-307, September.
    2. Patricia M. Dechow & Richard G. Sloan & Amy P. Sweeney, 1996. "Causes and Consequences of Earnings Manipulation: An Analysis of Firms Subject to Enforcement Actions by the SEC," Contemporary Accounting Research, John Wiley & Sons, vol. 13(1), pages 1-36, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Purwanto Purwanto & Isnain Bustaram & Subhan Subhan & Zef Risal, 2020. "The Effect of Good Corporate Governance on Financial Performance in Conventional and Islamic Banks: An Empirical Studies in Indonesia," International Journal of Economics and Financial Issues, International Journal of Economics and Financial Issues, vol. 10(3), pages 1-6.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ashfaque Banbhan & Xinsheng Cheng & Nizam Ud Din, 2018. "Financially Qualified Members in an Upper Echelon and Their Relationship with Corporate Sustainability: Evidence from an Emerging Economy," Sustainability, MDPI, vol. 10(12), pages 1-19, December.
    2. Anup Banerjee & Mattias Nordqvist & Karin Hellerstedt, 2020. "The role of the board chair—A literature review and suggestions for future research," Corporate Governance: An International Review, Wiley Blackwell, vol. 28(6), pages 372-405, November.
    3. Spira, Robin, 2024. "How does ESG rating disagreement influence analyst forecast dispersion?," Junior Management Science (JUMS), Junior Management Science e. V., vol. 9(3), pages 1769-1804.
    4. Basil Al‐Najjar, 2012. "The determinants of board meetings: evidence from categorical analysis," Journal of Applied Accounting Research, Emerald Group Publishing Limited, vol. 13(2), pages 178-190, September.
    5. Ararat, Melsa & Yurtoglu, B. Burcin, 2021. "Female directors, board committees, and firm performance: Time-series evidence from Turkey," Emerging Markets Review, Elsevier, vol. 48(C).
    6. Hessian, Mohamed & Zalata, Alaa Mansour & Hussainey, Khaled, 2025. "Does the board of directors and their stock ownership mitigate interest payment classification shifting? UK evidence," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 58(C).
    7. Carol Liu, M.H. & Zhuang, Zili, 2011. "Management earnings forecasts and the quality of analysts’ forecasts: The moderating effect of audit committees," Journal of Contemporary Accounting and Economics, Elsevier, vol. 7(1), pages 31-45.
    8. Curtis Nicholls, 2016. "The impact of SEC investigations and accounting and auditing enforcement releases on firms’ cost of equity capital," Review of Quantitative Finance and Accounting, Springer, vol. 47(1), pages 57-82, July.
    9. Zvi Singer & Jing Zhang, 2022. "Do companies try to conceal financial misstatements through auditor shopping?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 49(1-2), pages 140-180, January.
    10. Samuel Jebaraj Benjamin, 2019. "The Effect of Financial Constraints on Audit Fees," Capital Markets Review, Malaysian Finance Association, vol. 27(2), pages 59-87.
    11. Eunsoo Kim, 2024. "The Relationship between the Greenhouse Gas and Energy Target Management System and Foreign Ownership: Investor Sensitivity to the Implementation of the System," Sustainability, MDPI, vol. 16(6), pages 1-17, March.
    12. Moon Kyung Cho & Minjung Kang, 2024. "Executives Implicated in Financial Reporting Fraud and Firms’ Investment Decisions," Sustainability, MDPI, vol. 16(11), pages 1-26, June.
    13. Bhuiyan, Md. Borhan Uddin & Rahman, Asheq & Sultana, Nigar, 2020. "Female tainted directors, financial reporting quality and audit fees," Journal of Contemporary Accounting and Economics, Elsevier, vol. 16(2).
    14. Yang, Tongshu & Zhou, Nina, 2025. "Artificial intelligence and the quality of corporate accounting information disclosure," Finance Research Letters, Elsevier, vol. 85(PD).
    15. Lele Chen & Jennifer Yin, 2024. "Corporate Misconduct and Subsequent Consequences in Family Firms," Abacus, Accounting Foundation, University of Sydney, vol. 60(4), pages 935-966, December.
    16. Badolato, Patrick G. & Donelson, Dain C. & Ege, Matthew, 2014. "Audit committee financial expertise and earnings management: The role of status," Journal of Accounting and Economics, Elsevier, vol. 58(2), pages 208-230.
    17. Marc Berninger, 2024. "Changes in the Perception of Error Announcements from the German Two-Tier Enforcement," Schmalenbach Journal of Business Research, Springer, vol. 76(4), pages 613-639, December.
    18. James Routledge & David Morrison, 2012. "Insolvency administration as a strategic response to financial distress," Australian Journal of Management, Australian School of Business, vol. 37(3), pages 441-459, December.
    19. Rahman, Dewan & Malik, Ihtisham & Ali, Searat & Iqbal, Jamshed, 2021. "Do co-opted boards increase insider profitability?," Journal of Contemporary Accounting and Economics, Elsevier, vol. 17(3).
    20. Elizabeth Almer & Audrey Gramling & Steven Kaplan, 2008. "Impact of Post-restatement Actions Taken by a Firm on Non-professional Investors’ Credibility Perceptions," Journal of Business Ethics, Springer, vol. 80(1), pages 61-76, June.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ1:2019-06-19. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Monica Sinhat (email available below). General contact details of provider: https://econjournals.com/index.php/ijefi .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.