The Impact of Audit Findings and Recommendation Follow-Up on Public Service Quality: An Empirical Investigation
Abstract
Public services, traditionally provided by government agencies, present challenges in measuring their quality. As a result, research on public service quality remains relatively limited. This study seeks to examine both the direct and indirect effects of audit findings and the follow-up of audit recommendations on public service quality. The analysis covers 480 regency and city governments over the period 2021–2022, employing panel data regression, ordinal logistic regression, and the Sobel test. The findings reveal that audit findings negatively affect public service quality, while the follow-up on audit recommendations has a positive impact. These effects are observed both directly and indirectly, mediated by the quality of financial statements. This underscores the critical role of sound financial management in delivering high-quality public services. The results suggest that government agencies should not only strive for unqualified audit opinions but also prioritize the thorough follow-up of audit findings and recommendations. Doing so enhances both the quality of financial reporting and the overall delivery of public services.
Keywords: Public Service, Opinion, Audit Findings, Audit Recommendations Follow-up
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References
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Rochmah Ika, S., & Mohd Ghazali, N. A. (2012). Audit committee effectiveness and timeliness of reporting: Indonesian evidence. Managerial Auditing Journal, 27(4), 403-424.
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Stirton, L., & Lodge, M. (2001). Transparency mechanisms: Building publicness into public services. Journal of law and society, 28(4), 471-489.
Suwanda, D. (2015). Factors affecting quality of local government financial statements to get unqualified opinion (WTP) of audit board of the Republic of Indonesia (BPK). Research Journal of Finance and Accounting, 6(4), 139-157.
Undang-undang Dasar Republik Indonesia Tahun 1945, UUD 1945 (1945).
Undang-undang Nomor 23 Tahun 2014 tentang Pemerintahan Daerah, UU No. 23/2004 (2014).
Undang-undang Nomor 25 Tahun 2009 Pelayanan Publik, UU No. 25/2009 (2009).
Agustina, N., & Setyaningrum, D. (2020). Determinants Quality of Local Government Financial Statements in Indonesia. Review of Integrative Business and Economics Research, 9.
Aikins, S. K. (2011). An examination of government internal audits’ role in improving financial performance. Public Finance and Management, 11(4), 306-337.
Azfar, O., Kahkonen, S., Lanyi, A., Meagher, P., & Rutherford, D. (2018). Decentralization, governance and public services: The impact of institutional arrangements Devolution and development (pp. 45-88): Routledge.
Basuki, A. T. (2021). Analisis Data Panel dalam Penelitian Ekonomi dan Bisnis. UMY.
BPK RI. (2023). Ikhtisar Hasil Pemeriksaan Semester I Tahun 2023.
Cameron, W. (2004). Public accountability: Effectiveness, equity, ethics. Australian journal of public administration, 63(4), 59-67.
Chalmers, K., Hay, D., & Khlif, H. (2019). Internal control in accounting research: A review. Journal of Accounting Literature, 42(1), 80-103.
Crossley, R. M., Elmagrhi, M. H., & Ntim, C. G. (2021). Sustainability and legitimacy theory: The case of sustainable social and environmental practices of small and medium-sized enterprises.
De Renzio, P. (2013). Assessing and comparing the quality of public financial management systems: theory, history and evidence. The international handbook of public financial management, 137-160.
Deis Jr, D. R., & Giroux, G. A. (1992). Determinants of audit quality in the public sector. Accounting review, 462-479.
Din, M., Munawarah, Ghozali, I., & Achmad, T. (2017). The Follow Up of Auditing Results, Accountability of Financial Reporting and Mediating Effect of Financial Loss Rate: An Empirical Study in Indonesia Local Government. European Research Studies Journal.
Furqan, A. C., Wardhani, R., Martani, D., & Setyaningrum, D. (2020). The effect of audit findings and audit recommendation follow-up on the financial report and public service quality in Indonesia. International Journal of Public Sector Management. https://doi.org/10.1108/IJPSM-06-2019-0173
Goryakin, Y., Revill, P., Mirelman, A. J., Sweeney, R., Ochalek, J., & Suhrcke, M. (2020). Public financial management and health service delivery: a literature review. Global health economics: Shaping health policy in low-and middle-income countries, 191-215.
Gujarati, D. N., & Porter, D. N. (2012). Dasar-dasar ekonometrika: Buku 2 (R. C. Mangunsong, Penerj.; 5 ed.). Salemba Empat.
Habib, A. (2012). Non‐audit service fees and financial reporting quality: A meta‐analysis. Abacus, 48(2), 214-248.
Houston, D. J., & Harding, L. H. (2013). Public trust in government administrators: Explaining citizen perceptions of trustworthiness and competence. Public Integrity, 16(1), 53-76.
Iban, M. (2017). Perbandingan Regresi Logistik Ordinal Model Logit dan Model Probit pada Analisis Pengaruh Faktor Ibu terhadap Bayi Berat Lahir Rendah (BBLR). UNAIR.
Indriani, R., & Komala, L. (2024). The Effect of Regional Expenditure, Balancing Funds and BPK Audit Findings on Regional Government Financial Performance. Taxation and Public Finance, 2(1), 44-55.
Kiswanto, & Fatmawati, D. (2019). Determinan Kinerja Pemerintah Daerah: Ukuran Pemda, Leverage, Temuan Audit, dan Tindak lanjutnya. Jurnal Kajian Akuntansi, 3, 44–54.
Kusumawati, D., & Ratmono, D. (2017). Determinan Opini atas Laporan Keuangan Pemerintah di Indonesia. Diponegoro Journal of Accounting.
Lestari, A. D., & Rohman, A. (2022). Pengaruh Temuan Audit dan Tindak Lanjut Rekomendasi Audit terhadap Kualitas Pelayanan Publik melalui Kualitas Laporan Keuangan (Studi Empiris pada LKPD Kabupaten Daerah Tertinggal di Indonesia Tahun 2016-2017). Diponegoro Journal of Accounting, 11, 1–13.
McDaniel, L., Martin, R. D., & Maines, L. A. (2002). Evaluating financial reporting quality: The effects of financial expertise vs. financial literacy. The accounting review, 77(s-1), 139-167.
Milakovich, M. E. (1991). Total quality management in the public sector. National Productivity Review, 10(2), 195-213.
Ombudsman RI. (2023). Ringkasan Eksekutif Penilaian Kepatuhan Penyelenggaran Pelayanan Publik Tahun 2023.
Pamungkas, B., Avrian, C., & Ibtida, R. (2019). Factors influencing audit findings of the Indonesian district governments’ financial statements. Cogent Business & Management, 6(1), 1673102.
Pamungkas, B., Ibtida, R., & Avrian, C. (2018). Factors influencing audit opinion of the Indonesian municipal governments’ financial statements. Cogent Business & Management, 5(1), 1540256.
Peraturan BPK RI Nomor 1 Tahun 2017 tentang Standar Pemeriksaan Keuangan Negara (2017).
Peraturan Pemerintah Nomor 96 Tahun 2012 tentang Pelaksanaan Undang Undang Nomor 25 Tahun 2009 Tentang Pelayanan Publik, PP No. 96/2012 (2012).
Pertiwi, P. K., & Wibowo, P. (2023). Government Reporting and Quality of Public Services: Are They Twins? Journal of Accounting and Investment, 24. https://journal.umy.ac.id/index.php/ai/article/view/16193
Pramana, A. C., Rukmini, M., Riningsih, D., & Prihardina, O. (2023). Tindak Lanjut Hasil Rekomendasi Pemeriksaan Sebagai Penunjang Kualitas Laporan Keuangan Pemerintah Daerah. Jurnal Accounting and Finance Universitas Telkom, 7, 49–56. https://doi.org/10.25124/jaf.v7i1.5936
Rochmah Ika, S., & Mohd Ghazali, N. A. (2012). Audit committee effectiveness and timeliness of reporting: Indonesian evidence. Managerial Auditing Journal, 27(4), 403-424.
Sahir, S. H. (2021). Metodologi Penelitian. KBM Indonesia.
Saipuloh, Ismail, T., & Adha, W. M. (2023). The Effect of Audit Findings, Local Government Losses, and Follow-up of Audit Recommendations on Public Services Quality Through the Audit Opinion of Local Government Financial Statements in Sulawesi. International Journal of Applied Business and International Management, 8, 1–16. https://doi.org/10.32535/ijabim.v8i3.2
Schick, A. (2013). Reflections on two decades of public financial management reforms. Public financial management and its emerging architecture, 21-77.
Stirton, L., & Lodge, M. (2001). Transparency mechanisms: Building publicness into public services. Journal of law and society, 28(4), 471-489.
Suwanda, D. (2015). Factors affecting quality of local government financial statements to get unqualified opinion (WTP) of audit board of the Republic of Indonesia (BPK). Research Journal of Finance and Accounting, 6(4), 139-157.
Undang-undang Dasar Republik Indonesia Tahun 1945, UUD 1945 (1945).
Undang-undang Nomor 23 Tahun 2014 tentang Pemerintahan Daerah, UU No. 23/2004 (2014).
Undang-undang Nomor 25 Tahun 2009 Pelayanan Publik, UU No. 25/2009 (2009).
Published
2024-12-03
How to Cite
YANTI, Harti Budi; ARDLILLAH, Barlian Izza.
The Impact of Audit Findings and Recommendation Follow-Up on Public Service Quality: An Empirical Investigation.
Jurnal Ilmiah Akuntansi dan Bisnis, [S.l.], v. 19, n. 2, p. 278-292, dec. 2024.
ISSN 2303-1018.
Available at: <https://ojs.unud.ac.id/index.php/jiab/article/view/117628>. Date accessed: 30 jan. 2025.
doi: https://doi.org/10.24843/JIAB.2024.v19.i02.p06.
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