Quest Journals

Journal of Research in Business and Management

Volume 7 ~ Issue 1 (2019) pp: 47-51
ISSN(Online):2347-3002
www.questjournals.org

The Effect of Competence of human resources and the role of

internal audit on Local Government Financial Reporting
moderated by the Utilization of Regional Financial Accounting
Information System.
Juliana Sartika Djafar1, Arifuddin2, Syamsuddin2
1
Master of Accounting, Hasanuddin University, Indonesia
2
Economics and Business Faculty, Hasanuddin University, Indonesia
Corresponding Author: Juliana Sartika Djafar

ABSTRACT: This study aims to test and analyze the effect of competence of human resource and the role of
internal auditors on local government financial reporting and the utilization regional financial accounting
information systems as moderating variable.The object in this study was the Regional Inspectorate Office of the
Soppeng District Government. The technique of determining the sample using the method is non-probability
with purposive sampling that takes samples from the population based on certain criteria. Retrieving data using
questionnaire instruments. Data were analyzed using Moderated Regression Analysis (MRA).The results of the
study show that (1) Competence of Human Resources has a significant effect on the Quality of Local
Government Financial Statements (LKPD); (2) The role of Internal Audit has a significant effect on the Quality
of Local Government Financial Reports (LKPD); (3) Utilization of Regional Financial Accounting Information
Systems (SIAKD) moderates the effect of Competence of Human Resources (HR) on the Quality of Local
Government Financial Reports (LKPD); and (4) Utilization of the Regional Financial Accounting Information
System (SIAKD) cannot moderate the effect of the Role of Internal Audit on the Quality of Local Government
Financial Reports (LKPD)
KEYWORDS: Competence of human resource, Internal Audit, Accounting Information System

Received 11 January, 2019; Accepted 26 January, 2019 © the Author(S) 2019.

Published With Open Access At www.Questjournals.Org.

I. INTRODUCTION
Public sector organizations have a responsibility to serve the community, this is in accordance with the
phenomenon that occurred in Indonesia in connection with the current era of public sector reform, namely the
strengthening demand for openness and public accountability in the development process. Public accountability
or local government accountability is made in the form of Local Government Financial Reports (LKPD)
prepared by the head of the Regional Financial Management Unit (SKPKD) as Regional Financial Management
Officer (PPKD) based on the Regional Work Unit (SKPD) financial report and management accountability
report regional treasury.
According to data from the official website of the State Audit Board (BPK) Republic of Indonesia in
IHPS (Summary of Semester Examination Results) that the Opinion obtained by the Regional Government of
Soppeng Regency from 2013 to 2017 received opinions that gradually improved and received WTP opinion
(Unqualified), after the previous year namely 2012 received a TMP opinion (Not Giving Opinion / Diclaimer).
This certainly cannot be separated from several factors that can affect the Quality of the LKPD and make the
local government get a better opinion.
One that influences the quality of the LKPD was competence of human resource, where in some
previous studies it was explained that competence of human resource intended to influence the quality of the
LKPD are the competencies of the Regional Finance Management Officer (PPKD) in the provincial or regional
governments which are still very limited and still require assistance from internal auditors.
Competence of human resource from internal audior (APIP) have a role given by the auditors, this is
based on previous research conducted by Yuliani et al (2010) explaining that the role of internal audit has an
influence on the quality of financial statements because internal audit can help organizations achieve the aim is

Corresponding Author: Juliana Sartika Djafar 47 | Page

 The Effect of Competence of human resources and the role of internal audit on Local Government …

to implement a systematic and disciplined approach to evaluating and increasing the effectiveness of the
management process of the adequacy of the organization's control and management.
In addition to competence of human resource and the role of internal audit (APIP) for the
implementation of fast and accurate information delivery processes so as to produce quality financial reports,
the central and regional governments are obliged to develop and utilize information technology advances. This
is in accordance with Government Regulation No. 65 of 2010 concerning the Regional Financial Information
System which explains that in order to follow up the implementation of a development process that is in line
with Good Governance principles, the central government and regional governments are obliged to develop and
utilize information technology advancements to improve financial management capabilities and channel
financial information to public services as a form of accountability for activities carried out by the Government.

II. THEORETICAL CONCEPT

Attribution Theory
Attribution theory was a theory of behavior that explains how to determine the causes of a person's
behavior. This theory was first coined by Fritz Heider in 1958. Heider is one of the psychologists from Germany
who explained that attribution theory was a theory that explains the behavior of someone who tries to
understand one's behavior. Furthermore, this attribution theory was developed by Edward Jones and Keith Davis
in 1965 and Bernard Weiner in 1974. Jones and Davis (1956) who suggested the correspondent inference theory
state that an assessment is sometimes given by someone when they observe the behavior of others, and Weiner
(1974) explained that there is emotional involvement and motivation for success and academic failure in
attribution theory.
In general, Robbins (2006) states that this theory was an explanation of the causes of behavior of others
or oneself which is determined by factors from internal or external factors. This internal influence can cause a
person's behavior to be under his own control, for example: the ability, knowledge, and effort he has. While
external influences can lead to behavior of someone who is forced by certain situations, for example:
advantages, opportunities, and the surrounding environment. Determining the causes of behavior whether
internal or external attribution can be influenced by 3 factors, Robbins (2006):
1) Consensus: behavior that is shown if everyone who faces a similar situation responds in the same way.
2) Distincveness: behavior shown by different individuals in different situations.
3) Consistency: the same behavior in a person's actions from time to time

Competence of Human Resource

Human Resources (HR) was a system user who is required to have an adequate level of expertise, at
least having the willingness to continue to learn and hone skills in the field they are engaged in, therefore the
success of an organization in achieving its objectives was largely determined by the quality and capabilities
possessed by HR. The ability of HR in carrying out their duties and responsibilities is said to be HR
Competence. Spencer (1993) states that "an underlying characteristic of an individual which is causally related
to criterion - effective and superior performance in a job or situation" which means that competence was a
characteristic that underlies a person and is related to the effectiveness of individual performance in his work.
Syarifuddin (2014) explains that a characteristic that underlies a person's personality will cause each
other to be related to effective behavioral criteria and / or superior performance in a particular job or situation.
Further explained that determining the level of competence is needed to determine the expected level of
performance, Spencer (1993) writes 5 characteristics of HR competencies: (1) Knowledge (knowledge); (2)
Skills (skills); (3) Motives; (4) Traits (traits); and (5) Self Concept. In public organizations the role of HR is
more emphasized in the ability to provide good services to the community so that the organization has a
reputation for good and accountable performance in the eyes of the public. Whereas HR failure will have an
impact on report errors with the standards set in SAP, because no matter how perfect SAP is at the moment but
if the related HR was not reliable then the report produced will not be of quality.

The Role of Internal Audit

Internal auditors according to Haliah (2012) were auditors who work in organizations that have a large
enough role to help achieve organizational goals, internal auditors intended are: (1) Financial and Development
Supervisory Agency (BPKP); (2) Inspectorate General; and (3) Provincial Inspectorate and Regency / City
Inspectorate, known as the Government Internal Supervision Apparatus (APIP). Furthermore, Martowardojo,
who gave a keynote speech to the local work of the Government Internal Supervision Apparatus (APIP), stated
that internal audit was a systematic and objective assessment carried out by internal auditors on different
operations and controls in the organization (Suyono, 2016). The role of internal audit / inspectorate as the
internal supervisory apparatus of the regional government is expected to be able to assist local governments in
preparing quality and reliable financial reports.

Corresponding Author: Juliana Sartika Djafar 48 | Page

 The Effect of Competence of human resources and the role of internal audit on Local Government …

The Government Internal Supervisory Apparatus (APIP) itself functions as a government agency that
has main duties and functions to carry out supervision. The role of APIP is to carry out one of the functions as
an internal auditor, therefore normatively must realize generally accepted principles in the internal audit
organization.

Utilization of Regional Financial Accounting Information System

Arad et al (2009) Information Technology (IT) was an illustration of every technology that helps
humans communicate, store, manipulate, produce, and disseminate information. Furthermore Goodhue and
Thompson (1995) explained that technology was a tool that individuals use to complete the tasks they get. In the
context of information system, technology is related to computer systems (hardware, software and data) and the
use of supporting services that provide guidance to users in completing tasks. From the two meanings, it can be
concluded that information systems were a collection of resources, namely humans and equipment.
Jurnali and Supomo (2002) explain the use of information technology was the level of integration of
information technology in the implementation of accounting tasks. The utilization of information technology
includes the existence of; (a) data processing, information processing, management systems and work processes
electronically; and (b) utilization of information technology advances so that public services can be accessed
easily. Suyono (2016) said that the use of information technology can also improve the quality of local
government financial reports in order to realize accountability and transparency in regional financial
management, the use of information technology was a need that must be met, to help manage data faster, more
effectively and efficient. Now the government has utilized information technology that produces an information
system. This information system is known as the Regional Financial Information System (SIKD).

III. RESEARCH METHOD

This research was explanative, namely explaining the relationship between the independent and
dependent variable. The researcher collected the desired data through a questionnaire distributed to be filled in
by each respondent who became the sample in this study, besides using questionnaires the researcher also
obtained data through the Inspection Report (LHP) of the Regional Inspectorate of Soppeng Regency, therefore
the data used was data primary and secondary.
This primary data was obtained from respondents' answers to the questionnaires that were distributed
and analyzed to answer the problem formulation and to test the hypotheses in this study, while secondary data
was obtained from the Inspection Results Report (LHP) of the Soppeng District Government Inspectorate for
2017 to find some findings that can affect the quality of the LKPD.

IV. RESULTS AND DISCUSSIONS

The results of this study use the Moderated Regression Analysis (MRA) as an analytical method to test
hypotheses that have been formulated previously. This regression analysis was done in two stages of testing.
The first step is multiple regression without moderation variables, then the regression is done with moderating
variables, then the following results are obtained:

Regression Analysis Before Interacting With Moderating Variable

Variable Coefficient t Sig. Result
(Constant) -1,089
competence of HR 0,526 3,145 0,003 Significant
the role of internal audit 0,825 4.076 0,000 Significant
α = 5% = 0,05
R square = 0,507

Based on the results of the regression test above, mathematical equations can be arranged as follows.
Y= -1,089 + 0,526 X1 + 0,825X2 …….(1)

Based on the equation, it can be seen that the coefficient for all independent variables was positive.
This indicates that the influence of all independent variables, namely the competence of HR and the role of
internal audit were directly proportional to the quality variable of the Local Government Financial Report
(LKPD). The table also shows that the competence of HR and the role of internal audit shows a significant
influence on the quality of the Local Government Financial Report (LKPD). This can be seen from the
probability value of competence of HR variable of 0.003 and the internal audit role variable of 0.000 which is
smaller than 0.05, then partially the competence of HR variable and the role of internal audit have a significant
effect on the variable quality of local government financial statements. The determination coefficient value of R
square on the test results shows a value of 0.507 or 50.7%, this indicates that the competence of HR variable and

Corresponding Author: Juliana Sartika Djafar 49 | Page

 The Effect of Competence of human resources and the role of internal audit on Local Government …

the Role of Internal Audit can affect the Quality of Local Government Financial Reports (LKPD). While the
remaining 49.3% is influenced by other variables outside the independent variables examined in this study.

Regression Analysis After Interacting With Moderating Variable

Variable Coefficient t Sig. Result
(Constant) 1,188
SIAKD -0,035
X1.Z 0,118 2,866 0,007 Significant
X2.Z 0,096 1,366 0,181 Not-Significant
α = 5% = 0,05
R square = 0,594

Based on the results of the regression test above, mathematical equations can be arranged as follows:
Y= 1,188 + -0,035 + 0,118 + 0,096 …….(2)

The determination coefficient value of R square on the test results shows a value of 0.594 or 59.4%.
This indicates that after the moderating variable the use of the Regional Financial Accounting Information
System (SIAKD) interacts with the competence of HR variable and the role of Internal Audit can affect the
Quality of Local Government Financial Reports (LKPD). While the remaining 40.6% is influenced by other
variables outside the independent variables examined in this study.
From table it is also known that after the competence of HR interacts with the utilization variable of the
regional financial accounting information system as moderating having a probability value of 0.007 which is
below the significant standard value of 0.05. This shows that the utilization of regional financial information
systems can moderate the influence between the competencies of HR of internal auditors with the quality of
local government financial reports. From table it is also known that after the role of internal audit variable
interacts with the variable utilization of the regional financial accounting information system as moderating has
a probability value of 0.181 which means it is above the significant standard value of 0.05. This shows that the
use of regional financial information systems cannot moderate the influence between the role of internal audit
and the quality of local government financial reports.

V. CONCLUSIONS
Based on the results of testing the hypothesis and the discussion of the effect of the competency of HR
and the role of internal audit on the quality of Local Government Financial Reports (LKPD) moderated by the
use of the Regional Financial Accounting Information System (SIAKD), the following conclusions can be
drawn: (1) Competence of Human Resource (HR) effect to the quality of Local Government Financial Reports
(LKPD). That the more competent an internal auditor is, the better the quality of the Local Government
Financial Report (LKPD). This is also in line with attribution theory which explains the behavior of someone
trying to understand someone else by making an assessment by observing it. (2) The role of internal audit effect
to the quality of Local Government Financial Reports (LKPD). That it is good that the role given when the audit
process takes place will increase the quality of the Local Government Financial Report (LKPD) itself. This is
supported by the Goal setting theory that emphasizes the importance of the stated goals, with an internal audit
providing assurance services, it will assist the Regional Finance Management Officer (PPKD) in achieving its
objectives by applying a systematic and disciplined approach to evaluating and improving the effectiveness of
the risk management process adequacy of control and management. (3) Utilization of the Regional Financial
Accounting Information System (SIAKD) moderates and strengthens the relationship of the competencies of
Human Resources (HR) to the quality of Local Government Financial Reports (LKPD). So the competencies
possessed by auditors coupled with the Regional Financial Accounting Information System (SIAKD) owned
will increasingly make auditors more competent in carrying out their duties and will further improve the quality
of Local Government Financial Reports (LKPD). And (4) Utilization of Accounting Information Systems
Regional Finance (SIAKD) does not moderate the relationship of the role of internal audit to the quality of
Local Government Financial Reports (LKPD). This means that the presence or absence of the Regional
Financial Accounting Information System (SIAKD) in an area will not have an effect on the relationship
between the role of internal audit and the quality of the Local Government Financial Report (LKPD)
Based on the research conclusions, further research suggestions should be carried out to provide more
comprehensive results as follows: (1) Further research is expected to further expand the sample analysis unit or
research so that the results of the study can be more generalized. (2) Further research is expected to be able to
add or consider other variables that can be used to review which can affect the quality of Local Government
Financial Reports (LKPD). (3) The next researcher needs to consider the timing of the research, the next

Corresponding Author: Juliana Sartika Djafar 50 | Page

 The Effect of Competence of human resources and the role of internal audit on Local Government …

researcher should better carry out pre-research to enable initial data collection and ensure the research schedule
related to the object of the research.

REFERENCES
[1]. Arad, Hamed dan Hoda Arad. 2009. “Information Technology and Internal Controls”. SSRN Digital Library, Information Systems
and Technology. USA.
[2]. Goodhue and Thompson. 1995. “Task-Technology Fit and Individual Performance”. MIS Quarterky.
[3]. Haliah. 2012. “Kualitas Informasi Laporan Keuangan Pemerintah Daerah dan Faktor-faktor yang Mempengaruhinya”. Universitas
Hasanuddin Makassar
[4]. Heider, Fritz. 1958. “The Psychology of Interpersonal Relations”. New York. Wiley
[5]. Jones, Edward E. and Davis, Keith. 1965. “From Acts to Dispositions: The Attribution Process in Person Perception,”. Leonard
Berkowitz (Ed.). Advances in Experimental Social Psychology, Vol. 2. Academic Press. New York
[6]. Jurnali, Teddy dan Bambang Supomo. 2002. “Pengaruh Faktor Kesesuaian Tugas Teknologi dan Pemanfaatan TI Terhadap Kinerja
Akuntans Publik”. Jurnal Riset Akuntansi Indonesia. Vol. 5 No. 2.
[7]. Peraturan Pemerintah Nomor 65 Tahun 2010. “Sistem Informasi Keuangan Daerah”. Jakarta: Indonesia.
[8]. Robbins, Stephen P. 2006. “Perilaku Organisasi”. Jakarta: Gramedia.
[9]. Spencer, L.M dan Spencer Signe M. 1993. “Competence at Work (Model For Superior Performance)”. 1st Edition. Wiley. New
York.
[10]. Suyono Nanang Agus. 2016. “Identifikasi Faktor-Faktor Yang Mempengaruhi Kualitas Laporan Keuangan Pemerintah Daerah
(Studi Empiris Pada Pemerintahan Kabupaten Wonosobo)”. Jurnal PPKM III.
[11]. Syarifuddin Akhmad. 2014. “Pengaruh Kompetensi SDM dan Peran Audit Intern terhadap Kualitas Laporan Keuangan Pemerintah
Daerah dengan Variabel Intervening Sistem Pengendalian Internal Pemerintah (studi empiris pada Pemkab Kebumen)”. Jurnal
Fokus Bisnis, Volume 14, No 02.
[12]. Weiner, B. 1974. “Achievement motivation and attribution theory”. Morristown, N.J:General Learning Press.
[13]. Yuliani Safrida, Nadirsyah, dan Bakar Usman. 2010. “Pengaruh Pemahaman Akuntansim Pemanfaatan Sistem Informasi Akuntansi
Keuangan Daerah dan Peran Internal Audit Terhadap Kualitas Laporan Keuangan Pemerintah Daerah (Studi Empiris pada
Pemerintah Kota Banda Aceh)”. Jurnal Telaah dan Riset Akuntansi, 3 (2), pp. 206-220

Juliana Sartika Djafar" The Effect of Competence of human resources and the role of internal
audit on Local Government Financial Reporting moderated by the Utilization of Regional
Financial Accounting Information System." Quest Journals Journal of Research in Business and
Management, vol. 07, no. 01, 2019, pp 47-51

Corresponding Author: Juliana Sartika Djafar 51 | Page