Presenters: Tiwik Sulistyowati, Anim Rahmayati
Affiliation: Raden Mas Said State Islamic University Surakarta
Room: 8
ICIES News- At the 4th International Conference on Islamic Economics Studies (ICIES) 2024, held in Surakarta, Indonesia, researchers Tiwik Sulistyowati and Anim Rahmayati from Raden Mas Said State Islamic University Surakarta presented their insightful study titled “Determinants of Disclosure Level of Local Government Financial Statements in Central Java Province.” Their research addresses critical factors influencing the disclosure levels of financial statements by local governments in Central Java, an area where transparency and accountability are of utmost importance.
The study underscores the significance of financial statements in local governments, serving as a vital tool for demonstrating accountability in the management of finances and resources. Despite the established Government Accounting Standards, the current disclosure levels of financial statements in Central Java Province remain suboptimal. Sulistyowati and Rahmayati aimed to identify key determinants impacting these disclosure levels, focusing on the ratio of financial independence, capital expenditure, intergovernmental revenue, audit opinions, and total assets.
Employing a descriptive quantitative method, the researchers analyzed panel data from local government financial reports across districts and cities in Central Java Province for the period from 2020 to 2022. The study utilized purposive sampling, encompassing a total sample of 68 financial reports. The analysis revealed several notable findings:
- Positive Influences: The ratio of financial independence, intergovernmental revenue, and total assets positively affect the level of disclosure in local government financial statements. This suggests that governments with higher financial independence and larger total assets are more likely to provide comprehensive financial disclosures.
- Non-significant Factors: Interestingly, capital expenditure and audit opinion were found to have no significant effect on the disclosure levels of financial statements. This indicates that these factors do not play a decisive role in enhancing financial transparency among the local governments studied.
The findings offer valuable implications for local government officials and policymakers. By understanding the factors that drive financial disclosure, district and city governments can take strategic actions to improve transparency and accountability. Enhanced financial disclosure is crucial for fostering public trust and ensuring effective governance.
Sulistyowati and Rahmayati’s presentation at ICIES 2024 highlights the importance of continuous efforts towards improving financial reporting practices. Their research provides a foundation for future studies and offers practical guidance for local governments striving to achieve higher standards of financial transparency and accountability. The insights gained from this study are expected to contribute significantly to the ongoing discourse on public financial management and governance in Indonesia.