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Moderating Effect of Good Governance on Determinants of the Quality Region Government Financial Reports

The purpose of this study was to analyze the effect of Accrual-Based Government Accounting Standards (GAS) implementation, apparatus competence and the role of internal audit on the quality of local government financial statements with good governance as a moderating variable. This type of research is ekspanatory research. The population in this study were auditors who worked at the Financial and Development Supervisory Agency (BPKP) Representative of Papua Province, totalling 91 auditors. The technique for determining the sample was by using purposive sampling with the final sample was 74 respondents. Hypothesis testing uses multiple regression analysis and residual test for moderating variables with the help of the SPSS program. The results of this study prove that the implementation of accrual-based GAS has an positive dan significant effect on the quality of local government financial reports, apparatus competence has no effect on the quality of local government financial reports, the role of internal audit does not affect the quality of local government financial reports, good governance as a moderating variable can moderate the relationship between accrual-based GAS implementation.


INTRODUCTION
The development of government financial reporting in Indonesia is an interesting thing to study further. The government continues to strive to improve or reform procurement of goods and services even though almost all goods/services procurement processes have gone through e-procurement (www.suara.com).
Head of Public Relations of the KPK in 2017 said that the corruption case allegedly involving the Head of the Public Works Office of Papua Province occurred even though the procurement of projects was based on electronics (news.detik.com). Irregularities in electronic auctions, one of which still occurs due to meetings of the authorities or having influence with other parties, which should have been resolved by the electronic system.
Based on the quotation above, it can be seen that the function of the government auditors did not play a role as it should have caused the budget not to be realized as expected. It can also be seen that there is still negligence in the field which causes the budget not to be implemented according to budget planning (Alfiati, 2017;in Lamba et al. 2020).
One of the factors that can affect the quality of local government financial reports is the application of actual-based government accounting standards.
According to the opinion of Permana (2011), it is stated that there is an influence between government accounting standards on the quality of local government financial reports. It is believed that the application of government accounting standards will have an impact on improving the quality of financial reporting in the central and regional governments.
Moreover, the second factor that affects the quality of regional government financial reports is the competence of the government apparatus, where the competence of the local government apparatus means the capacity that the apparatus must have in the form of the knowledge, skills, attitudes and behavior needed to carry out its duties (Aruan 2003). This statement is in contrast to the research Adh (2003) that the apparatus competence did not affect the quality of financial statement information.
Furthermore, the third factor that can affect the quality of local government financial reports is the role of internal audit. In article 9 paragraph (1) of Indonesian Law Number 15 of 2014, it is stated that in conducting audits of the management and accountability of state finances, BPK can take advantage of the results of the inspection by the government internal control apparatus. The role and function of internal audit is an important element in an adequate organizational control system. This statement is in contrast to research conducted by Inapty et al (2016) that the role of internal audit and the internal control system had no effect on the quality of financial statement information.
The last factor that can affect the quality of local government financial reports is good governance. According to Standards Audit (SA) and Financial and Development Supervisory Agency (BPKP) (2001: 6), defining good governance is the implementation of a state government that is solid and responsible, as well as efficient and effective by keeping constructive interactions between the domains of the state, private sector and society. This statement is in line with the results of research Thua (2015) and Oktariana, et al (2016) show that good governance affects the quality of financial statement information.
Departing from the results of the empirical studies above, it turns out that the research results are ambivalent. It means that the ambivalence or contradiction of the research results is a research gap which Agusthy (2006), states that the research gap can or should be developed as a research problem that needs to be further investigated. Based on these considerations, the purpose of this research is to analyze the application of accrual-based GAS, apparatus competence and the role of internal audit on the quality of local government financial reports with good governance as a moderating variable. Kiswara (2011) states that the decision-usefulness theory of accounting information is a reference for the preparation of the Financial Accounting Standard Boards (FASB) conceptual framework, namely the Statement of Financial Accounting Concepts (SFAC) in effect in the United States. The usefulness of accounting information decisions contains components that need to be considered by presenters of accounting information so that the existing coverage can meet the needs of decision-makers who will use it. The relationship between this theory and the topic of this research is implementation of accrual-based accounting system is expected to be able to produce accurate, timely, relevant and flexible information for decision making by management and operating personnel within the organization.
Government accounting standards regulate the presentation of financial reports for general purposes in order to improve the comparability of financial reports both against budgets, between periods, and between entities. Purpose financial statements to meet the common needs of most users of the report. To achieve this, government accounting standards establish all considerations in the framework of the presentation of financial statements, guidelines for the structure of financial statements and minimum requirements for the content of financial statements (Zeyn 2011).
The application of GAS requires each reporting entity, which in this case includes local governments to report the efforts that have been made and the results achieved in implementing activities in a systematic and structured manner in a reporting period for accountability, management, transparency, the balance between generations and evaluation performance. In order for financial reports to contain meaningful information financial statements must be prepared based on GAS. Based on this concept support, the first hypothesis proposed in this study is that there is a direct effect of accrual-based GAS implementation on the quality of local government financial reports The competence of local government officials means the abilities that an apparatus must-have in the form of knowledge, skills, attitudes and behaviors needed in carrying out their duties (Aruan 2003). Educational indicators used in this study are the level of formal education of employees, the suitability of competence in education, and the ability to present reports following applicable GAS. Based on this concept support, the second hypothesis proposed in this study is that there is no direct effect of apparatus competence on the quality of regional government financial reports.
In conducting audits of the management and accountability of state finances, the BPK can take advantage of the results of the inspection by the government internal control apparatus. The role and function of internal audit is an important element in an adequate administrative control system. Internal audit is an objective consulting and belief activity that is managed independently within the organization and is directed by a value-added philosophy to improve company operations. Such audits assist the organization in achieving its objectives by applying a systematic and disciplined approach to evaluating and improving the effectiveness of risk management processes, control adequacy, and organizational management. Based on this concept support, the third hypothesis proposed in this study is that there is no direct influence on the role of internal audit on the quality of local government financial reports.
Good governance, according to SAA and BPKP (2001: 6), is the implementation of a state government that is solid and responsible, as well as efficient and effective by keeping constructive interactions between the domains of the state, private sector and society. Thus governance is the use of political economy and administrative authority to manage State affairs at all levels. According to the SAA (2003: 7), there are principles of good governance government, including 1). Participation. 2). The rule of law. 3). Transparency. 4). Responsiveness. 5). Consensus orientation. 6). Equity. 7). Efficiency and Effectiveness. 8). Accountability and 9). Strategic vision.
Based on the support of this concept, the fourth hypothesis proposed in this study is that good governance moderated the relationship between the application of accrual-based GAS to the quality of local government financial reports. The fifth hypothesis proposed in this study is that good governance moderated the relationship between apparatus competence to the quality of local government financial reports and the last (sixth hypothesis) proposed in this study is that good governance moderated the relationship between the role of internal audit to the quality of local government financial reports.
Financial reports used to compare realized revenue, expenditure, transfers, and financing with a predetermined budget, assess the financial condition, evaluate the effectiveness and efficiency of a reporting entity, and help determine its compliance with laws and regulations. In government accounting standards, it is explained that the qualitative characteristics of financial statements are: 1). Relevant, namely, the information contained in it can influence user decisions by helping them evaluate past or present events and predict the future, as well as correct the results of their past evaluations. 2) Reliable. 3) Can be compared, and 4). Can be understood.

RESEARCH METHOD
The population in this research are all of auditors at the Papua Provincial Representative Office for Finance and Development (BPKP). The technique for determining the sample was by using purposive sampling. The criteria for determining the sample used in this study are as follows: a) Auditors who have worked for at least 1 (one) year. b) Auditor who lives in Papua. Based on the criteria that have been determined, the number of respondents who were sampled in this study was 74 respondents. Methods of data collection using interview techniques and through a questionnaire instrument. The test of the questionnaire instrument was carried out through validity and reliability tests.
Operational definition of research variables as follows; government accounting standards are rules that regulate the presentation of financial statements for general purposes in order to increase the comparability of financial statements both against budgets, between periods, and between entities. This variable consists of 5 indicators that are described in 9 statement items. Competence of local government apparatus means the ability that must be possessed by an apparatus in the form of knowledge, skills, attitudes and behaviors needed in carrying out their duties. This variable consists of 3 indicators that are described in 5 statement items. The role of internal audit is activities related to providing independent and objective reassurance and consulting, designed to add value and improve the organization's operations. This variable consists of 5 indicators that are described in 6 statement items. Good governanceis the implementation of a state government that is solid and responsible, as well as efficient and effective, by keeping constructive interactions between the domains of the state, private sector and society. This variable consists of 6 indicators that are described in 6 statement items. The quality of regional financial reports are normative measures that need to be realized in accounting information reports so that they can meet their objectives. This variable consists of 4 indicators that are described in 6 statement items To answer the research problems, it is adjusted to the hypothetical model, where to test the hypothesis of this study using moderated regression analysis. The form of the mathematical equation formulation from the moderated regression analysis used is as follows; QFR= α +β1AGAS+β2AC+β3b3IAR+β4AGAS*GG+β5AC*GG+β6IAR*GG+e ......(1) Note: QFR = Quality of financial reports GG = Good governance AGAS = Application of accrual-based GAS α = Constant AC = Apparatus competence β = Coeficien IAR = Internal audit role e = Error term

RESULT AND DISCUSSION
The results of descriptive statistical testing of research variables are as follows. The validity test, in this study, used a comparison between the Product Moment and Person correlation index with a significance of 5%. If the probability of the correlation result is less than 0.05, the instrument is declared valid. Conversely, if the correlation result is greater than 0.05, the instrument is declared invalid. The results of this test are summarized in the following table. The validity test results above can be concluded as valid because the probability level (sig) is smaller than 0.05. Reliability test was conducted to produce a consistent size statement and results of this test (cronbach alpha) are summarized in the following table.
The test results above show that the efficiency of cronbach alpha based on standardized items is higher than 0.60, so it can be concluded that the data for the five variables studied are reliable. Testing whether the data distribution is normal or not is done by looking at the distribution of data on a normal probability plot. The display of the normal probability plot test results for this research data is shown below. Table 3

. Reliability Test Results
Source: Research Data, 2021

Source: Research Data, 2021
The normal probability plot graph in the Figure above shows that the data points spread around the diagonal line and the distribution follow the direction of the diagonal line. Thus the data distribution can be said to be normally distributed so that that regression can be carried out with multiple linear models. Heteroscedasticity testing in this study was carried out by looking at scatterplot charts. The following are the results of the heteroscedasticity test shown in the scatterplot charts below. The picture above shows that the research data is heteroscedasticity free because the data points spread above and below the 0 on the Y-axis

Figure 2. Heteroscedasticity Testing Results
The multicollinearity test of this study uses the Variance Inflation Factor (VIF) value or the variance increase factor. If the value of VIF> 10, then multicollinearity occurs, conversely if VIF <10 then multicollinearity does not occur. The following are the results of the multicollinearity test, as seen below. The test results using regression analysis to test the application of accrualbased GAS, apparatus competence, and the role of internal audit on quality of local government financial reports as shown in the table below. The first hypothesis proposed in this study is that there is a direct effect of accrual-based GAS Implementation on the quality of local government financial reports. Based on the table above, it is known that the t-value of 3.608, with a value of 0.003, is less than the p-value of 0.05. Therefor, H0 is rejected, which means that the path coefficient is significant. Thus, it can be concluded that the accrual-based GAS Application affects the quality of regional government financial reports.
The second hypothesis proposed in this study is that there is no direct effect of apparatus competence on the quality of regional government financial r eports. Based on the table above, it is known that the t-value of 1.565, with a significance of 0.203, is greater than the p-value of 0.05. Therefore, H0 is accepted, meaning that the path coefficient is not significant. Thus, it s concluded that the competence of the apparatus does not affect the quality of local government financial reports.
The third hypothesis proposed in this study is that there is no direct influence on the role of internal audit on the quality of local government financial reports. Based on the table above, it is known that the t value of 1.285 with a significance of 0.203 is greater than the p-value of 0.05 so that H0 is accepted, meaning that the path coefficient is not significant. Thus, it can be concluded that the role of internal audit does not affect the quality of local government financial reports. The fourth hypothesis proposed in this study is that there is an effect of the application of accrual-based GAS on the quality of local government financial reports. Based on the table above, it is known that the t -value of -2.388, with a significance of 0.020, is greater than the p-value of 0.05. Therefore, H0 is rejected. It means that the path coefficient is significant. Thus, it can be concluded that good governance moderates the relationship between the role of internal audit and the quality of local government financial reports. The fifth hypothesis proposed in this study is that there is an influence of the competence of the apparatus on the quality of local government financial reports. Based on the table above, it is known that the t-value of 3.608, with a value of 0.003, is less than the p-value of 0.05. Therefore, H0 is rejected, which means that the path coefficient is significant. Thus, it can is stated that good governance moderates the relationship between apparatus competence and the quality of government financial reports. The sixth hypothesis proposed in this study is that there is an influence on the role of internal audit on the quality of local government financial reports. Based on the table above, it is known that the t-value of -3.001, with a significance of 0.004, is greater than the p-value of 0.05. Therefore, H0 is rejected. Thus, it is concluded that good governance moderates the relationship between the role of internal audit and the quality of local government financial reports. The answers to these research problems can be summarized in the table below. The results of testing the MRA analysis produce a regression coefficient which is described in the research model as follows: The results of this study indicate that the application of GAS has a positive effect on the quality of local government financial reports. It can be interpreted that the higher the application of Accrual-based GAS, the higher the quality of local government financial reports. This result is in line with research conducted by Anggraini (2017) and Munasyir (2015) which found a positive and significant relationship between the application of GAS to the quality of local government financial reports. Accrual-based government accounting standards are said to be good because most of the accrual-based government accounting standards have been implemented and implemented according to their functions and operational standards. This statement is in line with previous research, namely Adhi et al, (2013), Juwita (2013) and Sanjaya (2017). They also concluded that government accounting standards affect the quality of financial reports.
The results of this study indicate that the competence of the apparatus does not affect the quality of local government financial reports. It can be interpreted that it is suspected that because some auditor are still less competent to preparing financial reports, the government should be expected to evaluate officials who are not in accordance with the ability of the positions they currently hold and also carry out education and training so that the understanding of preparing financial reports is better in the future. The results of this study are in line with the results of Inapty, et al (2016). The results of the study show that the competence of the apparatus does not affect the quality of information on the financial reports of the MTB Provincial government.
The quality of the report is said to increase if the report can be supported by government officials who understand how government accounting itself is. Apparatus competence is the main factor and driving the wheels of the organization which aims to make the report well and correctly and is also a very important organizational element. Apparatus competence must be managed as well as possible in order to provide a good relationship in achieving organizational goals. If each individual in the organization works well and gives their best contribution to the organization, then the overall quality of organizational performance will be good (Mahmudi 2007). Research is contrary to research results Oktarina et al. (2016), Kiranayanti et al, (2016)¸and Gumelar (2014). The above statement can be justified that the competence of the apparatus is a key indicator in producing good quality financial reports. The quality of the apparatus which has accounting skills and expertise will make it easier for employees to prepare financial reports. In addition, talented human resources can minimize the occurrence of errors that may have an impact on the results of sthe financial statements made. This statement is in line with the results of research produced by Kiranayanti et al, (2016) which prove that HR competencies have a positive and significant effect on the quality of financial statements.
The results of this study indicate that the role of internal audit does not affect the quality of local government financial reports. The findings of this study do not support the previously proposed hypothesis where the results of the study show that the role of internal audit does not affect the quality of local government financial reports. This finding means that to realize good governance still requiresk the support of the role of external auditors. This finding indirectly indicates that it is possible that the competence, independence or work experience of internal auditors and other factors need improvement in improving the performance of government agencies. The above statement is in line with the findings of Inapty et al, (2016) where the research results show that the role of internal audit does not affect the quality of financial statement information.
The role of internal audit is one of the aspects that ensures the quality of local government financial reports. It is explained that the better the process of monitoring or review activities carried out by the role of the internal auditor (APIP) to government agencies will certainly improve the quality of local government financial statement information. However, the results of the above research are contrary to the research conducted by Sari (2012). The results show that there is an influence on the role of internal audit on the quality of local government financial reports.
Statistically, the results of this study show that the variable good governance moderates the influence of the role of internal audit on the quality of local government financial reports. It can be explained that the higher the value of Good Governance will affect the stronger the influence of the role of internal audit on the quality of local government financial reports. This statement is in line with research results (Ikbal et al., 2019).
The role of the internal auditor represents one of the professional institutions that strongly supports the realization of good governance where good governance has become a major component in improving the performance of government agencies to be more economical, effective and efficient in regional financial management. With the increasing process of supervision or review carried out by internal auditors (APIP) to government agencies, it will certainly increase the impact on the quality of information on local government financial statements. This statement research, on the role of internal audit, has been carried out by of Inapty et al, (2016). They proved that there is an influence on the role of internal audit on the quality of local government financial reports through good governance. This statement on the role of internal audit, has been carried out by of Inapty et al, (2016). They proved that there is an influence on the role of internal audit on the quality of local government financial reports through good governance. This statement is also in line with the results of the study conducted by . The results of the study show that there is a significant direct influence between internal auditor quality on the quality of financial statements (Ikbal et al, 2019) and good governance moderates the influence of variable management ability and auditor quality. It means that the higher the value of good governance, the higher the influence of management ability and the quality of internal auditors on the quality of financial statements.

CONCLUSION
Based on the results of the testing and research discussion, the following conclusions were obtained; the implementation of accrual-based government accounting standards has a significant effect on the quality of the keerom regency government's financial reports. Apparatus competence and the role of internal audit does not affect the quality government financial reports. The results of the moderation test show that good governance is proven to be able to moderate the relationship between; the relationship of accrual-based GAS application to the quality government financial reports, apparatus competence and the quality government's financial reports and between the role of internal audit and the quality of the government financial reports. The limitations of this study are as follows that the variables used in this study to measure the influence of these variables on the quality of regional financial reports are limited to the application of accrual-based government accounting standards, apparatus competence, the role of internal audit and good governance as moderating variables where this study does not consider other variables that may affect the quality of local government financial reports.
Based on the research conducted, the researcher suggests some suggestions as follows; the next researcher should conduct direct and in-depth interviews with the auditors as respondents in the study so that the information obtained from the research results can be represented and explain the actual situation. The next researcher also adds and considers other variables that are thought to be able to influence the quality of local government financial reports such as SKPD reviews and audit findings variables.