Human Competencies: Amplifying Financial Reporting Quality in Indonesian Local Government

Mediaty (), Grace T. Pontoh, Nadhirah Nagu, Rahmawati Hs, Anis Anshari Mas’ud and Rozainun Haji Abdul Aziz
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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

JRFM, 2025, vol. 18, issue 8, 1-21

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.

Keywords: human resource competencies; financial reporting quality; good governance; organizational commitment; internal control systems; Indonesian local government (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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