The Effect of Local Government Heads? Commitment and Human Resource Competency on Local Government Accounting Information System, Internal Control System, and Audit Opinion of Local Government Financial Statements in Southeast Sulawesi Indonesia

This study aims at empirically examining and analyzing the effect of local government heads commitment and human resource competency in financial management on (1) local government accounting information system, (2) internal control system directly, and indirectly through accounting information system, and (3) audit opinion of local government financial statements directly, and indirectly through accounting information and internal control systems. The study employs a quantitative method using path analysis techniques applied on data collected from fifteen local government financial statements and 495 respondents from local governments in Southeast Sulawesi, Indonesia. The results of this study indicate that (1) local government heads commitment and human resource competency are significantly positive to determine the reliability of local government accounting information system and can explain 83.7 % of its variation, while the remaining 16.3 % are influenced by other factors outside the model, (2) local government heads commitment, human resource competency, and local government accounting information system are statistically significant to affect the adequacy of internal control system and can explain 84 % of its variation, while the remaining 16 % are influenced by other factors outside the model, and (3) local government heads commitment, human resource competency, local government accounting information system, and internal control system are significantly positive to determine the audit opinion of local government financial statements in Southeast Sulawesi Province, and can explain 73.4 % of its variation, while the remaining 26.6 % are influenced by other factors outside the model. This study contributes to the development of the theory and concept of state/local government finance accountability and financial audit, particularly at local governments in Indonesia. It can be used as a reference to improve the accountability of local government financial statements.