The influence of audit opinion, characteristics of regional head, and levels of corruption on performance of local government in Indonesia

Authors

  • Junita Angelina Sam Ratulangi University
  • David Paul Elia Saerang Sam Ratulangi University
  • Jessy D. L. Warongan Sam Ratulangi University

DOI:

https://doi.org/10.58784/cfabr.160

Keywords:

audit opinion, characteristics of regional head, levels of corruption, local government performance

Abstract

This study aims to analyze the influence of audit opinion, characteristics of regional head, and the level of corruption on local government performance in Indonesia. This study uses secondary data with the research population being all local governments in Indonesia with a research sample of 394 observations in 2021. The analysis method used is multiple linear regression analysis. The results of multiple linear regression test show that audit opinion and the education level of the regional head have a positive and significant effect on local government performance. Meanwhile, the experience of the regional head and the level of corruption have a negative and significant effect on local government performance. However, it is known that the age of the regional head has no significant effect on local government performance. This study implies that the better the audit opinion, the better the local government performance, as well as the higher the education level of the regional head, the higher the cognitive complexity possessed by the regional head can further improve local government performance. This study also shows that there is a negative effect on the experience of regional heads and the level of corruption on local government performance. This implies that regional heads with experience as non-bureaucrats can improve local government performance more than regional heads with experience as bureaucrats. In addition, the negative effect of the level of corruption on local government performance implies that the higher the level of corruption that occurs in a region, the worse the performance of the local government. As for the age of the regional head, it is not statistically proven to affect local government performance, this finding reveals that other factors such as experience and education level may be more decisive.

Downloads

Download data is not yet available.

References

Ahyaruddin, M., & Amrillah, M. F. (2018). Faktor penentu kinerja pemerintah daerah. Jurnal Akuntansi Multiparadigma, 9(3), 471–486. https://doi.org/10.18202/jamal.2018.04.9028

Arti, N. D. B., & Rizky, R. Y. (2023). Analisis korupsi dan upaya mewujudkan good governance di Indonesia. Jurnal Ilmiah Administrasi Pemerintahan Daerah, 15(2), 135–149. https://doi.org/10.33701/jiapd.v15i2.3798

Avellaneda, C. N. (2012). Do politics or mayors’ demographics matter for municipal revenue expansion? Public Management Review, 14(8), 1061–1086. https://doi.org/10.1080/14719037.2012.662442

Bunadi, I., Saputro, D. D., & Nurmalasari. (2022). Pengaruh karakteristik kepala daerah terhadap kinerja pemerintah daerah provinsi di Indonesia. Cakrawala Repositori IMWI, 5(1), 101–111. https://doi.org/10.52851/cakrawala.v5i1.101

Choi, E., & Woo, J. (2010). Political corruption, economic performance, and electoral outcomes: a cross-national analysis. Contemporary Politics, 16(3), 249–262. https://doi.org/10.1080/13569775.2010.501636

Cope, G. H., & Rainey, H. G. (1992). Understanding and managing public organizations. Public Productivity & Management Review, 15(4), 504–506. https://doi.org/10.2307/3380636

Dionisijev, I., & Lazarevska, Z. B. (2021). The audit opinion in the role of stock prices fluctuations on the Macedonian stock exchange. Financial Studies, 25(3), 29–43. http://fs.icfm.ro/Paper02.FS3.2021.pdf

Ghozali, I. (2016). Aplikasi analisis multivariate dengan program IBM SPSS 23 (8th ed.). Badan Penerbit Universitas Diponegoro.

Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of Management Review, 9(2), 193–206. https://doi.org/10.5465/amr.1984.4277628

Harung, H. S., Heato, D. P., & Alexander, C. N. (1995). A unified theory of leadership. Leadership & Organization Development Journal, 16(7), 44–59. https://doi.org/10.1108/01437739510100946

Hasthoro, H. A., Saksono, Y., & Widiyanti, N. (2020). The effect of financial conditions and audit opinions on local government performance. Proceedings of the 3rd International Conference on Banking, Accounting, Management and Economics. Series: Advances in Economics, Business and Management Research/Advances in Economics, Business and Management Research, 91–95. https://doi.org/10.2991/aebmr.k.210311.018

He, Z. (2016). Local government innovation and revealed ideas of political legitimacy: A comparative study between the United States and China. Journal of Chinese Political Science, 21(1), 1–19. https://doi.org/10.1007/s11366-015-9376-9

Hill, C. J., & Lynn, L. E. (2003). Governance and public management, an introduction. Journal of Policy Analysis and Management, 23(1), 3–11. https://doi.org/10.1002/pam.10175

Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.1016/0304-405X(76)90026-X

Johnston, M. (1996). The search for definitions: the vitality of politics and the issue of corruption. International Social Science Journal, 48(149), 321–335. https://doi.org/10.1111/1468-2451.00035

Khairudin, Rahmawati, Winarna, J., & Gantyowati, E. (2023). Does corruption have a bad impact on local government performance. Ilomata International Journal of Social Science, 4(1), 18–29. https://doi.org/10.52728/ijss.v4i1.671

Klitgaard, R. (1998). International cooperation against corruption. In Finance & Development (pp. 1–6). International Monetary Fund. External Relations Dept. https://www.elibrary.imf.org/view/journals/022/0035/001/article-A002-en.xml

Kuncoro, M. (2013). Metode riset untuk bisnis dan ekonomi bagaimana meneliti dan menulis tesis (4th ed.). Erlangga.

Lane, J.-E. (2000). The public sector: Concepts, models and approaches. SAGE Publications Ltd. https://doi.org/10.4135/9781446220085

Latief, F., & Mutiarin, D. (2016). Transparansi pengelolaan anggaran daerah di Satuan Kerja Perangkat Daerah (SKPD) Kabupaten Bulukumba tahun 2014. Journal of Governance and Public Policy, 3(2), 245–262. https://doi.org/10.18196/jgpp.2016.0058

Leung, P., Coram, P., Cooper, B. J., & Richardson, P. (2015). Modern auditing and assurance services. John Wiley & Sons.

Liu, J., & Lin, B. (2012). Government auditing and corruption control: Evidence from China’s provincial panel data. China Journal of Accounting Research, 5(2), 163–186. https://doi.org/10.1016/j.cjar.2012.01.002

Mahardini, N. Y., & Setiawan, D. (2022). Do characteristics and political background of regional heads influence financial performance of local governments in Indonesia? International Journal of Science, Technology & Management, 3(4), 845–855. https://doi.org/10.46729/ijstm.v3i4.555

Miller, T., & Del Carmen Triana, M. (2009). Demographic diversity in the boardroom: Mediators of the board diversity–firm performance relationship. Journal of Management Studies, 46(5), 755–786. https://doi.org/10.1111/j.1467-6486.2009.00839.x

Mimba, N. P. S. H., van Helden, G. J., & Tillema, S. (2007). Public sector performance measurement in developing countries. Journal of Accounting & Organizational Change, 3(3), 192–208. https://doi.org/10.1108/18325910710820265

Min, K. (2022). The impact of corruption on government performance: Evidence from South Korea. Crime, Law and Social Change, 79(3), 319–345. https://doi.org/10.1007/s10611-022-10054-x

Monika, P. (2015). Pengaruh opini audit terhadap kinerja pemerintah daerah dengan tingkat korupsi sebagai variabel moderasi pengujian sub sampel berdasarkan kualitas kepala daerah [Thesis, Fakultas Ekonomi dan Bisnis Universitas Indonesia]. https://lontar.ui.ac.id/detail?id=20415958&lokasi=lokal

Nangoy, N. A. M., Sondakh, J. J., & Sabijono, H. (2016). Pengaruh kejelasan sasaran anggaran dan partisipasi anggaran terhadap Kinerja Aparat Pemerintah Daerah Kota Manado. Going Concern: Jurnal Riset Akuntansi, 11(2), 45–52. https://doi.org/10.32400/gc.11.2.13060.2016

Nogueira, S. P., & Jorge, S. M. (2012). Adequacy of the Local Government financial reporting model in the context of internal decision-making: An exploratory study in the municipality of Bragança. Tékhne, 10(2), 74–86. https://doi.org/10.1016/j.tekhne.2012.06.001

Notoatmodjo, S. (2009). Pengembangan sumber daya manusia. Rineka Cipta.

Pahlevi, A. R., & Setiawan, D. (2017). Apakah karakteristik kepala daerah berdampak terhadap kinerja pemerintahan? Jurnal Akuntansi Multiparadigma, 8(3), 571–582. https://doi.org/10.18202/jamal.2017.12.7074

Pamungkas, B., Ibtida, R., & Avrian, C. (2018). Factors influencing audit opinion of the Indonesian municipal governments’ financial statements. Cogent Business & Management, 5(1), 1–18. https://doi.org/10.1080/23311975.2018.1540256

Park, S., & Cho, Y. J. (2014). The influence of executive selection factors on the performance of public sector organizations in Korea. Public Performance & Management Review, 37(3), 412–440. https://doi.org/10.2753/PMR1530-9576370304

Parwanto, E., & Harto, P. (2017). Pengaruh hasil pemeriksaan BPK terhadap kinerja keuangan pemerintah daerah. Diponegoro Journal of Accounting, 6(1), 35–43. https://ejournal3.undip.ac.id/index.php/accounting/article/view/18259

Prasetyo, A., & Putrini, C. (2016). Head of regional characteristics and the local government performance in Indonesia. Global Journal of Business Social Sciences Review, 4(3), 44–55. https://doi.org/10.35609/gjbssr.2016.4.3(7)

Priharjanto, A., Niansyah, F. I. W., Wibowo, Y. H., & Andriana, N. (2020). Analysis of how local leaders’ characteristics influence local government’s performance in Indonesia. In Public Sector Accountants and Quantum Leap: How Far We Can Survive in Industrial Revolution 4.0? (pp. 324–328). Routledge. https://doi.org/10.1201/9780367822965-65

Ririhena, S. W., & Richard, Y. F. (2022). Agency relations, accountability, and their relation to local government public value creation. International Journal of Science and Society, 4(3), 126–139. https://doi.org/10.54783/ijsoc.v4i3.506

Saragih, T. A. A., & Mulyani, S. (2018). Analisis perbedaan kinerja pemerintah daerah yang dipimpin kepala daerah berlatar belakang entrepreneur dan nonentrepreneur. Banque Syar’i: Jurnal Ilmiah Perbankan Syariah, 4(1), 69–86. https://jurnal.uinbanten.ac.id/index.php/bs/article/view/1072

Sebaa, A. A., Wallace, J., & Cornelius, N. (2009). Managerial characteristics, strategy and performance in local government. Measuring Business Excellence, 13(4), 12–21. https://doi.org/10.1108/13683040911006756

Siagian, T. S., & Khair, H. (2018). Pengaruh gaya kepemimpinan dan lingkungan kerja terhadap kinerja karyawan dengan kepuasan kerja sebagai variabel intervening. Maneggio: Jurnal Ilmiah Magister Manajemen, 1(1), 59–70. https://doi.org/10.30596/maneggio.v1i1.2241

Sutopo, B., Wulandari, T. R., Adiati, A. K., & Saputra, D. A. (2017). E-Government, audit opinion, and performance of local government administration in Indonesia. Australasian Accounting, Business and Finance Journal, 11(4), 6–22. https://doi.org/10.14453/aabfj.v11i4.2

Tama, I. G. M. A. A., & Adi, P. H. (2018). Pengaruh karakteristik kepala daerah, ukuran pemerintah, dan temuan audit terhadap kinerja keuangan daerah. Perspektif Akuntansi, 1(1), 91–113. https://doi.org/10.24246/persi.v1i1.p91-113

Utama, F. R., Evana, E., & Gamayuni, R. R. (2019). The effect of local government characteristics on performance of local government administration. International Research Journal of Business Studies, 12(2), 197–208. https://doi.org/10.21632/irjbs.12.2.197-208

Walker, R. M., & Andrews, R. (2015). Local government management and performance: A review of evidence. Journal of Public Administration Research and Theory, 25(1), 101–133. https://doi.org/10.1093/jopart/mut038

Wiersema, M. F., & Bantel, K. A. (1992). Top management team demography and corporate strategic change. Academy of Management Journal, 35(1), 91–121. https://doi.org/10.2307/256474

Downloads

Published

2024-07-26

How to Cite

Angelina, J., Saerang, D. P. E., & Warongan, J. D. L. (2024). The influence of audit opinion, characteristics of regional head, and levels of corruption on performance of local government in Indonesia. The Contrarian : Finance, Accounting, and Business Research, 3(2), 96–112. https://doi.org/10.58784/cfabr.160

Issue

Section

Articles