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Vol. 7 No. 12 (2024): December

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Factors Influencing Regional Government Financial Disclosure Compliance

https://doi.org/10.31150/ajebm.v7i12.3123
M. Saranya
Dhaanish Ahmed College of Engineering, Chennai, Tamil Nadu, India.
D. Esther Jasmine
Dhaanish Ahmed College of Engineering, Chennai, Tamil Nadu, India.
B. Vaidianathan
Dhaanish Ahmed College of Engineering, Chennai, Tamil Nadu, India.

American Journal of Economics and Business Management, Vol. 7 No. 12 (2024): December

Abstract

This study analyzes factors influencing mandatory disclosure in the financial statements of Local Governments in East Java, Indonesia, , which adheres to the accrual basis of accounting. The research examines the impact of four factors: regional wealth, the educational background of local government heads, intergovernmental revenue, and population size. The sample consists of 74 financial statements from Local Governments in East Java for the years. Data were analyzed using multiple regression techniques with SPSS 20.0 software. The findings show that wealth and population size are positively correlated with the level of mandatory disclosure in local government financial statements. This suggests that wealthier regions and those with larger populations are more likely to meet disclosure requirements. Conversely, the educational background of local government chiefs and intergovernmental revenue were found to have no significant relationship with the level of financial statement disclosure. This indicates that factors related to leadership qualifications and financial transfers from the central government do not influence the compliance with mandatory disclosure requirements. These results contribute to understanding how local government characteristics affect the transparency of financial reporting, highlighting the role of regional wealth and population size in enhancing financial disclosure practices. However, further research may be needed to explore other potential factors influencing local government transparency.

Keywords

Government Characteristics, Local Government Financial Statement, Mandatory Disclosure, Government Accounting Standard
M. Saranya, D. Esther Jasmine, & B. Vaidianathan. (2024). Factors Influencing Regional Government Financial Disclosure Compliance. American Journal of Economics and Business Management, 7(12), 1393–1406. https://doi.org/10.31150/ajebm.v7i12.3123
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