The Influence Of Understanding The Regional Financial Accounting System And The Internal Control System On The Performance Of Local Government Organizations With Leadership Style As Moderating Variables In The Government Of Indragiri Hulu Regency

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The Influence of Understanding the Regional Financial Accounting System and Internal Control System on the Performance of Local Government Organizations with Leadership Style as Moderating Variables in the Government of Indragiri Hulu Regency

Abstract

In the context of regional government, accountability and financial transparency are crucial aspects that must be upheld. This study aims to analyze the effect of understanding the regional financial accounting system and internal control systems on the performance of local government organizations in Indragiri Hulu Regency. Additionally, this research tests the role of leadership style as a moderating variable using a residual test. The type of research conducted is causal associative research, which is useful for analyzing the causal relationship between variables using quantitative data.

Introduction

In the context of regional government, accountability and financial transparency are important aspects that must be upheld. The Regional Financial Accounting System (SAKD) plays a crucial role in providing accurate and relevant information for decision making in government organizations. In addition, effective internal control systems (SPI) can help prevent deviations and improve operational efficiency. This research focuses on the Government of Indragiri Hulu Regency, where challenges in regional financial management require special attention.

Understanding the Regional Financial Accounting System

A good understanding of SAKD provides a foundation for government officials to manage budget and financial reporting well. This understanding includes knowledge about regulations, transaction recording procedures, to financial reporting. When stakeholders have a strong understanding, they tend to carry out more transparent and accountable financial management, which in turn improve organizational performance. Effective financial management is essential for local government organizations to achieve their goals and provide better services to the community.

The Importance of Internal Control System

A good internal control system is a guarantee for operational sustainability and preventing irregularities. SPI functions as a mechanism to ensure that all procedures and policies are followed, as well as providing protection for organizational assets. With good control, local government organizations can achieve the expected goals and provide better services to the community. Internal control systems play a vital role in maintaining the integrity and reliability of financial reporting.

Leadership Style as a Moderating Variable

Leadership style has an important role in creating a positive work environment and supporting the implementation of accounting systems and internal control. However, the results showed that the leadership style could not moderate the relationship between SAKD and SPI understanding of the performance of government organizations. This may be caused by the fact that good performance is more influenced by the ability of individuals and existing systems, rather than direct effects of leadership styles. Leadership style is a crucial factor in determining the success of an organization, but its impact may be limited in certain contexts.

The Impact of Understanding SAKD and SPI on Performance

The results of this study showed that an understanding of the regional financial accounting system and internal control systems had an effect both simultaneously and partially on the performance of local government organizations. However, the leadership style cannot moderate the relationship between understanding the regional financial accounting system and the internal control system for the performance of local government organizations. Understanding SAKD and SPI is essential for local government organizations to achieve their goals and provide better services to the community.

Conclusion

Through this study, it can be concluded that a good understanding of the regional financial accounting system and the application of effective internal control systems has a positive impact on the performance of local government organizations in Indragiri Hulu Regency. Although the leadership style does not function as a significant moderating variable, it is important for leaders to create a conducive working atmosphere so that the implementation of the financial system and control can run well. This study provides an important picture of the capacity building of local government officials in financial management, in order to achieve accountability and transparency in government.

Recommendations

Based on the findings of this study, the following recommendations are made:

  • Local government organizations in Indragiri Hulu Regency should prioritize the development of a good understanding of the regional financial accounting system and internal control systems.
  • Leaders should create a conducive working atmosphere to support the implementation of the financial system and control.
  • Capacity building programs for local government officials in financial management should be implemented to achieve accountability and transparency in government.

Limitations of the Study

This study has several limitations that should be noted:

  • The study was conducted in a specific context, namely the Government of Indragiri Hulu Regency, and may not be generalizable to other contexts.
  • The study relied on quantitative data and may not capture the nuances of the relationship between variables.
  • The study did not examine the impact of other factors that may influence the relationship between understanding SAKD and SPI and performance.

Future Research Directions

Future research should aim to:

  • Examine the impact of other factors that may influence the relationship between understanding SAKD and SPI and performance.
  • Investigate the effectiveness of capacity building programs for local government officials in financial management.
  • Conduct a comparative study of the impact of understanding SAKD and SPI on performance in different contexts.
    Frequently Asked Questions (FAQs) about the Influence of Understanding the Regional Financial Accounting System and Internal Control System on the Performance of Local Government Organizations

Q: What is the Regional Financial Accounting System (SAKD)?

A: The Regional Financial Accounting System (SAKD) is a system that provides accurate and relevant information for decision making in government organizations. It includes knowledge about regulations, transaction recording procedures, and financial reporting.

Q: What is the Internal Control System (SPI)?

A: The Internal Control System (SPI) is a mechanism that ensures that all procedures and policies are followed, as well as providing protection for organizational assets. It plays a vital role in maintaining the integrity and reliability of financial reporting.

Q: What is the role of leadership style in creating a positive work environment?

A: Leadership style has an important role in creating a positive work environment and supporting the implementation of accounting systems and internal control. However, the results of this study showed that the leadership style could not moderate the relationship between SAKD and SPI understanding of the performance of government organizations.

Q: What is the impact of understanding SAKD and SPI on performance?

A: The results of this study showed that an understanding of the regional financial accounting system and internal control systems had an effect both simultaneously and partially on the performance of local government organizations.

Q: What are the limitations of this study?

A: This study has several limitations that should be noted, including:

  • The study was conducted in a specific context, namely the Government of Indragiri Hulu Regency, and may not be generalizable to other contexts.
  • The study relied on quantitative data and may not capture the nuances of the relationship between variables.
  • The study did not examine the impact of other factors that may influence the relationship between understanding SAKD and SPI and performance.

Q: What are the recommendations of this study?

A: Based on the findings of this study, the following recommendations are made:

  • Local government organizations in Indragiri Hulu Regency should prioritize the development of a good understanding of the regional financial accounting system and internal control systems.
  • Leaders should create a conducive working atmosphere to support the implementation of the financial system and control.
  • Capacity building programs for local government officials in financial management should be implemented to achieve accountability and transparency in government.

Q: What are the future research directions?

A: Future research should aim to:

  • Examine the impact of other factors that may influence the relationship between understanding SAKD and SPI and performance.
  • Investigate the effectiveness of capacity building programs for local government officials in financial management.
  • Conduct a comparative study of the impact of understanding SAKD and SPI on performance in different contexts.

Q: What are the implications of this study for policymakers and practitioners?

A: This study provides an important picture of the capacity building of local government officials in financial management, in order to achieve accountability and transparency in government. Policymakers and practitioners should prioritize the development of a good understanding of the regional financial accounting system and internal control systems, as well as create a conducive working atmosphere to support the implementation of the financial system and control.