Improving Quality of Information on Local Financial Statements and its Utilization for Capital Expenditure Budgeting (Case Study at the Provincial Government of East Nusa Tenggara)

摘要

This thesis aims to analyze the information quality of Local Government Financial Statement (LGFS) of The Provincial Government of East Nusa Tenggara before and after the implementation of the accrual basis, the efforts of the The Provincial Government of East Nusa Tenggara to improve the quality of LGFS and the LGFS utilization design as material for policy decisions on capital expenditure and fixed assets. This study uses the basis of agency theory and operationalizes the qualitative characteristics of financial statements that are adjusted to government accounting standards in Indonesia. This research method is qualitative method with explanatory-descriptive case study. The results of LGFS information quality research in The Provincial Government of East Nusa Tenggara are at a moderate level, which means that the LGFS information is sufficient to be used in decision making. Efforts made by the Provincial Government of East Nusa Tenggara are increasing commitment to accounting policies, increasing human resource capacity and improving information systems. Furthermore, in designing the utilization of LGFS information for capital expenditure decision making, a fixed asset needs planning SOP is prepared based on the documents and related parties as well as the output produced in the draft of local government budget. There are several limitations of this research. First there is a possibility of inaccuracy in the operationalization of qualitative characteristics because this study combined reliable dimensions based on the Government of the Republic of Indonesia with faithful representation dimensions according to Beest, Braam and Boelens. Second this research measures the quality of LGFS limited to reporting entities only, has not involved the opinions of accounting entities. Third, this research has not examined the extent of the role of internal control officers in guaranteeing the quality of information quality of LGFS. Fourth, this research was conducted in 2018 to measure the quality of the LGFS in 2013-2016, so that it was feared that there would be a mistake in filling out questionnaires by respondents. Fifth, confirmation conducted does not involve external parties, it is feared that the information is not objective. Based on the limitations, there are several suggestions of this research. First, conduct interviews with the financial report compiler for each indicator after the results of the questionnaire are obtained. Second, to measure the quality of information the LGFS needs to involve the work unit as an accounting entity. Third, it is necessary to review the extent of the role of the internal control apparatus in guaranteeing the quality of information on the quality of the LGFS. Fourth, to conduct research in order to evaluate the quality of information on LGFS it is necessary to do it directly in each of the reporting years to maintain the accuracy of the data from the questionnaire and confirmation results. Fifth, make a confirmation involving external parties of the regional government to ensure the objectivity of information obtained by involving external auditors or the community.