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Human Competencies: Amplifying Financial Reporting Quality in Indonesian Local Government

Author

Listed:
  • Mediaty

    (Faculty of Economics and Business, Hasanuddin University, Makassar 90245, Indonesia)

  • Grace T. Pontoh

    (Faculty of Economics and Business, Hasanuddin University, Makassar 90245, Indonesia)

  • Nadhirah Nagu

    (Faculty of Economics and Business, Hasanuddin University, Makassar 90245, Indonesia)

  • Rahmawati HS

    (Faculty of Economics and Business, Hasanuddin University, Makassar 90245, Indonesia)

  • Anis Anshari Mas’ud

    (Faculty of Economics, Universitas Sulawesi Barat, Majene 91412, Indonesia)

  • Rozainun Haji Abdul Aziz

    (Accounting Section, UniKL Business School, Kuala Lumpur 50250, Malaysia)

Abstract

This quantitative study examines the determinants of financial reporting quality in Indonesian local governments, focusing on good governance, regional financial accounting systems, internal control systems, organizational commitment, and information technology utilization, with HR competencies as a moderator. Data were collected via surveys from 170 Local Government Work Units (SKPDs) across South Sulawesi Province, Indonesia. Employing Structural Equation Modeling (SEM), the findings indicate that good governance, regional financial accounting systems, internal control systems, organizational commitment, and information technology utilization all positively influence financial reporting quality. Crucially, human resource competencies were found to significantly moderate the relationship between the internal control system and organizational commitment with financial reporting quality. However, this moderating effect was not significant for the relationships involving good governance, regional financial accounting systems, and information technology utilization. These results highlight the essential role of human resource development and systemic enhancements in fostering greater financial accountability and transparency within the public sector. Therefore, policy recommendations should focus not only on enhancing individual competencies but also on synergistically strengthening systems and governance frameworks to achieve transparent and reliable public financial reporting.

Suggested Citation

  • Mediaty & Grace T. Pontoh & Nadhirah Nagu & Rahmawati HS & Anis Anshari Mas’ud & Rozainun Haji Abdul Aziz, 2025. "Human Competencies: Amplifying Financial Reporting Quality in Indonesian Local Government," JRFM, MDPI, vol. 18(8), pages 1-21, August.
    • Handle: RePEc:gam:jjrfmx:v:18:y:2025:i:8:p:424-:d:1715198
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    References listed on IDEAS

    as
    1. Josep Garcia-Blandon & Josep Maria Argilés-Bosch & Monica Martinez-Blasco & David Castillo Merino, 2018. "On the relationship between compliance with recommendations on the audit committee of codes of good practices and financial reporting quality," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 22(4), pages 921-946, December.
    2. Abdalwali Lutfi & Saleh Zaid Alkilani & Mohamed Saad & Malek Hamed Alshirah & Ahmad Farhan Alshirah & Mahmaod Alrawad & Malak Akif Al-Khasawneh & Nahla Ibrahim & Abeer Abdelhalim & Mujtaba Hashim Rama, 2022. "The Influence of Audit Committee Chair Characteristics on Financial Reporting Quality," JRFM, MDPI, vol. 15(12), pages 1-15, November.
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