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

Novi Natalia Padang, Idhar Yahya, Badaruddin and Nurlinda
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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

Advances in Decision Sciences, 2025, vol. 29, issue 2, 138-167

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

Keywords: Rule of Law; Public Transparency; Cultural Change; Financial Reporting Quality (search for similar items in EconPapers)
JEL-codes: D73 H11 H83 K16 (search for similar items in EconPapers)
Date: 2025
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