Fiscal Decentralization, Internal Control System, Accountability of Local Government and Audit Opinion
Abstrak
The objective of this research is to examine the influence of fiscal decentralization and internal control
system on the accountability of local government financial reporting with audit opinion in the previous year
as the moderator variable. The result shows that fiscal decentralization, which utilize the regional
independency level and level of dependency towards the central government as proxy, does not influence the
accountability of local government’s financial reporting. Meanwhile, internal control system, which utilizes
the weakness of internal control system as proxy, has a negative effect on the accountability of local
government’s financial reporting. The interaction test shows that audit opinion in the previous year is not
able to strengthen the influence of the region’s level of independence, is unable to weaken the influence of the
region’s level of dependence andis able to weaken the influence of internal control system on the accountability
of local government financial reporting.
Keywords: Fiscal decentralization; internal control system; previous year audit opinion; and
accountability of financial reporting