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Go Back       IAR Journal of Business Management | IAR J Bus Mng, 2020; 1(3): | Volume:1 Issue:3 ( Oct. 31, 2020 ) : 191-195.
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DOI : 10.47310/iarjbm.2020.v01i03.016       Download PDF       HTML       XML

The Effect of Human Resource Capacity, Internal Control and Utilization of Accounting Information Technology on Quality of Financial Statements In Aceh Jaya District, Province of Aceh, Indonesia


Article History

Received: 05.10.2020; Revision: 24. 10.2020; Accepted: 27. 10.2020; Published: 30. 10.2020


Author Details

Zainuddin, Darwanis & Syukriy Abdullah


Authors Affiliations

Master of Accounting Program, Faculty of Economics and Business Universitas Syiah Kuala, Banda Aceh, Indonesia


Abstract: The purpose of this study was to determine the development of human resource capacity, internal control and the use of accounting information technology that affects the quality of financial statements in Aceh Jaya District. In this study the analysis used is multiple linear regression which aims to test and analyze, both jointly and partially affect of knowing the development of human resource capacity, internal control and the use of accounting information technology on the quality of financial statements in Aceh Jaya District. The data used are processed with the SPSS (Statistical Package For Social Science) program 22. The results of the study indicate that knowing the development of human resource capacity, internal control and the use of accounting information technology together have an effect on the quality of financial statements in Aceh Jaya District, resource capacity development human resources affect the quality of financial statements in Aceh Jaya District, internal control affects the quality of financial statements in Aceh Jaya District, and the use of accounting information technology has a positive effect on the quality of financial statements in Aceh Jaya District.


Keywords: human resource capacity, internal control, utilization of accounting information technology, quality of financial statements.


INTRODUCTION

The development of public sector organizations at this time requires many parties who will rely on information in financial reporting published by local governments as a basis for decision making. According to Suwardjono (2005), published information must be useful for users and the information must have value. Public demand for information disclosure is part of the attention of stakeholders in the accountability of public institutions, both at central and regional levels.


Financial reporting is the output of financial reporting, where financial reporting is the process of preparing financial reporting that aims to provide useful information to stakeholders in making business and economic decisions (Gibson, 2011). The reform of state financial management is marked by the enactment of Law Number 17 of 2003 concerning State Finance, Law Number 1 of 2004 concerning State Treasury, and Law Number 15 of 2004 concerning Audit of State Financial Management and Accountability along with its supporting regulations. The legislation package illustrates the seriousness of the government and the ranks of parliament to improve management, record keeping, accountability and audit of government financial management at the central and regional levels. economical, effective, transparent and accountable, taking into account the sense of fairness and propriety as a prerequisite to support the successful implementation of state government.


The financial statements of public sector public organizations are an important component of creating public sector accountability. The increasing demands on the implementation of public accountability have implications for public sector management to provide information to the public, one of which is accounting information in the form of financial statements (Mardiasmo, 2009: 26).


According to Government Regulation Number 71 of 2010, financial statements are structured reports on statements of financial position and transactions carried out by a reporting entity. The Regional Government Financial Report (LKPD) annually receives an assessment in the form of an opinion from the Financial Audit Agency (BPK). According to the BPK there are 3 types of audits carried out namely financial audits, performance audits and audits with specific objectives. Based on BPK's findings, most financial reporting WDP opinion is problematic in the recording of assets / assets belonging to the region. There is not yet an application that can accommodate the recording needs of assets is one of the causes. , physical presence and disclosure in financial reporting is inadequate (Yusniar et al., 2016).Capacity is a characteristic of someone who has the skills (knowledge), knowledge (knowledge) and capability (ability) to carry out the work capacity that underlies a person achieving high performance on the job. Employees who do not have enough knowledge about work will have many obstacles that result in waste of materials, time and labor (Hevesi, 2005).


Internal control is the policies and procedures implemented to obtain a reasonable guarantee that the objectives of certain business units will be achieved (Arens et al., 2006). The definition of internal control delivered by the Organizational Sponsoring Committee of the Tradeway Commission (COSO), that internal control is a process that is influenced to provide assurance that organizational goals can be achieved through: efficiency and effectiveness of operations, presentation of reliable financial statements, compliance with laws and regulations applicable.


The development of increasingly sophisticated information technology today requires the government to follow the development of the technology. In public sector organizations also create strategies and innovations to achieve government goals so that they can keep abreast of the times. The use of information technology in financial management is also explained in Government Regulation No. 56/2005 concerning Regional Financial Information Systems. Implementation of the treasurer of expenditure is permitted to use application software, but consequently the treasurer of expenditure must be capable and proficient in operating computers and understanding the application procedures for the administration of regional finances and accounting of expenditure treasurers (Permendagri No.13 / 2006 article 225).

LITERATURE REVIEW

Quality of Financial Report

The quality of local government financial reports is a public demand for good governance requires a change of paradigm and principles of regional financial management, both at the budgeting, implementation and accountability stages (Yusniar et al., 2016).


According to Statement of Financial Accounting Standards No. 1 of 2015 concerning the Presentation of Financial Statements the purpose of government financial reporting is to present information that is useful for decision making and to show the accountability of the reporting entity for the resources entrusted to it. As according to Thomas (2013: 35), explaining the meaning of financial statements is: "Financial statements are the end result of an accounting cycle that provides a financial picture of a company that is periodically prepared by company management. Financial statements have the historical nature of making numbers about the company's performance and financial condition in the past (historical). Meanwhile according to the Indonesian Accountants Association (IAI) (2015: 2) financial statements are part of the financial reporting process. Complete financial statements usually include a balance sheet, income statement, statement of changes in financial position (presented in various ways such as cash flow statements or cash flow statements), notes and other reports and explanatory material that is an integral part of the financial statements.


The financial statements of public sector public organizations are an important component for creating public sector accountability. The increasing demands on the implementation of public accountability have implications for public sector management for public sector management to provide information to the public, one of which is accounting information in the form of financial statements ( Mardiasmo, 2009: 26).


According to Government Regulation Number 71 of 2010, financial statements are structured reports on statements of financial position and transactions carried out by a reporting entity. In government regulation No. 8 of 2006, regarding financial reporting and the performance of government agencies, states that financial statements are a form of accountability for the management of state and regional finances for one period.


Regional financial statement presentation is a form of accountability of state and regional financial management regarding financial position reports and transactions carried out by a reporting entity in the form of regional government. Regional governments are required to be able to present financial statements fairly and are fully disclosed so that the financial statements presented are useful for decision makers, so as to create transparency and public accountability in local government.


Human resource capacity

According to Yosefrinaldi (2013) Human resource capacity is the ability of human resources to carry out the duties and responsibilities given to them with adequate education, training, and experience provision. Based on the Government of Indonesia Regulation No.101 (2000, Article 3) states that capacity is the capacity and characteristics of civil servants (PNS), in the form of knowledge, skills, and behaviors needed in carrying out their duties. The assessment of capacity achievement needs to be done objectively, based on employee performance in the organization, with evidence of mastery of knowledge, skills, values their values ​​and attitudes as a result of learning (Sutrisno, 2009). Thus, it can be concluded that the Capacity of Human Resources is the ability of human resources to carry out their duties and responsibilities in organizations with adequate education, training and experience to achieve organizational goals effectively if and efficient.


According to Blanchard & Thacker (2004) a person's skill is reflected in how well a person is carrying out a specific activity such as operating an equipment, communicating effectively, or implementing a business strategy.


Human Resources Quality Indicators according to Hutapea and Nurianna (2008: 62) include: understanding their respective fields; knowledge; ability; work spirit; and planning or organizing skills.


Internal Control

Internal control according to Government Regulation No. 08 of 2006 concerning Financial Reporting and Performance of Government Agencies is a process created by management created to provide adequate confidence in achieving effectiveness, efficiency, adherence to applicable laws and regulations, and the reliability of the presentation of government financial statements.


Internal control systems include organizational structure, methods and measures that are coordinated to maintain organizational wealth, check the accuracy and reliability of accounting data, encourage efficiency and encourage compliance with management policies. The definition of the internal control system emphasizes the objectives to be achieved, and not on the elements elements that make up the system. Thus, the definition of internal control above applies both in companies that process information manually, with bookkeeping machines, and with computers (Mulyadi, 2014: 163).


Internal control is the policies and procedures implemented to obtain a reasonable guarantee that the objectives of certain business units will be achieved (Arens et al. 2006). The definition of internal control delivered by the Organizational Sponsoring Committee of the Tradeway Commission (COSO), that internal control is a process that is influenced to provide assurance that organizational goals can be achieved through: efficiency and effectiveness of operations, presentation of reliable financial statements, compliance with laws and regulations applicable. Internal control can be explained as a process designed to provide rational confidence in achieving the objectives of the reliability of financial reporting, effectiveness and efficiency of the company's operations and organizational compliance with existing rules and regulations.


Utilization of Information Technology

According to Sutabri (2014: 3) information technology is a technology used to process data, including processing, obtaining, compiling, storing, manipulating data in various ways to produce quality information, namely relevant, accurate and timely information, which is used personal, business, and government needs and is strategic information for decision making. Meanwhile, according to Mulyadi (2014: 21) information technology includes computers (both hardware and software), various electronic office equipment, factory equipment and telecommunications.


Kadir (2013: 4) argues that information technology is not only limited to computer technology (hardware and software) that is used to process and store information, but also includes communication technology for sending information. Meanwhile, according to Sutabri (2014), the definition of Information Technology is as follows: Information technology can be defined as a combination between computer and telecommunications technology with other technologies such as hardware, software, databases, network technology and other telecommunications equipment.


The SIMDA application aims to provide a data base on conditions in remote areas, both from the financial aspects of regional assets, staffing and public service aspects that can be used to assess the performance of local government agencies. Then SIMDA also aims to produce comprehensive, reliable and accurate information to local government management. This information can be used as material for making decisions. The next goal is to prepare regional apparatuses and strengthen the basis of local governments in achieving better levels of mastery and information technology empowerment in implementing regional autonomy. The SIMDA application program consists of a budgeting module, an administration module, a module accounting and reporting. While for the management of regional property (BMD) the Aceh Jaya Regency Government has not used the SIMDA application.


RESEARCH METHOD

Research Objects and Design

This study aims to examine the effect of developing human resource capacity, internal control and the use of accounting information technology on the quality of financial reports in the district of Jaya. In accordance with the objectives of the study, the type of research used in this study is the hypothesis testing research (hyphotesis testing research).


Data Analysis Tools

Data analysis tools use through the SPSS (Statistical Product and Service Solution) program 2.2. The analytical method used is multiple linear regression which aims to test and analyze, both jointly and partially the influence of human resource capacity development, internal control and utilization of accounting information technology on the quality of financial statements in Jayaaceh, which is processed by the SPSS program (Statistical Package For Social Science) 22.


FINDINGS AND DISCUSSION

The Effect of Human Resource Capacity, Internal Control Systems, and the Use of Information Technology on the Quality of Financial Reporting

The test results together show the regression coefficient value of the variable human resource capacity (X1) of β1 = 0.467, the regression coefficient value of the internal control system variable (X2) of β2 = 0.214, the value of the regression coefficient of the variable in the utilization of information technology (X3) of β3 = 0.301 . Hypothesis testing shows that if β1, β2, β3 ≠ 0, then Ha is accepted, meaning that the capacity of human resources, internal control systems, and the use of information technology jointly affect the quality of financial reporting.


The Effect of Human Resource Capacity nn The Quality of Financial Reporting

The test results together show the regression coefficient value of the variable human resource capacity (X1) of β1 = 0.467. Hypothesis testing shows that if β1 ≠ 0, then Ha is accepted, meaning that the capacity of human resources affects the quality of financial reporting. The coefficient value is 0.467, meaning that the capacity of human resources has a positive effect on the quality of financial reporting. The better the capacity of human resources, the better the quality of financial reporting in an organization.


The Effect of Internal Control Systems on the Quality Of Financial Reporting

The test results together show the regression coefficient value of the internal control system variable (X2) of β2 = 0.214. Hypothesis testing shows that if β2 ≠ 0 then Ha is accepted, it means that the internal control system affects the quality of financial reporting. The coefficient value is 0.214, meaning that the internal control system has a positive effect on the quality of financial reporting. The better the internal control system, the better the quality of financial reporting of an organization.


The Effect of the Use of Information Technology on the Quality of Financial Reporting

The test results together show the regression coefficient of variable information technology utilization (X3) of β3 = 0.301. Hypothesis testing shows that if β3 ≠ 0, then Ha is accepted, meaning that the use of information technology affects the quality of financial reporting. The coefficient value is 0.301, meaning that the use of information technology has a positive effect on the quality of financial reporting. The better the use of information technology, the better the quality of organizational financial reporting.


CONCLUSIONS

      1. Human resource capacity, internal control systems, and the use of information technology affect the quality of financial reporting in Aceh Jaya Regency.

      2. Human resource capacity has a positive effect on the quality of financial reporting in Aceh Jaya District.

      3. The internal control system has a positive effect on the quality of financial reporting in Aceh Jaya Regency.

      4. The use of information technology has a positive effect on the quality of financial reporting in Aceh Jaya Regency.


Recommendations

  1. Researchers can then use several other SKPAs in the province of Aceh.

  2. Future researchers can use proxies other than this study such as professionalism and job satisfaction as a measure in future research.

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