Quality of Financial Reporting and Impact of GGG Implementation: Study on Local Government in Indonesia

Abstract

This study relates to good governance determinants to discover the relationship and impact of good government governance on the quality of financial reporting in the Indonesian capital. Independent variables such as legal culture, transparency, equality, accountability, and the Human Development Index are independent variables, but the quality of financial reporting is the dependent variable for this study. Because this research method is quantitative, in some cases only accountability variables that have a significant impact on the quality of the annual financial statements are detected. However, for other independent variables such as legal culture, transparency, impartiality, and the Human Development Index, this does not have a significant impact on the quality of financial reporting. However, at the same time, all independent variables have a significant impact on the quality of the annual financial statements. The coefficient of determination measurement obtained is equal to adjustment R2 = 0.257. This means that the quality of municipal financial reporting is affected by 25.7% of independent variables, while 74.3% is affected by other variables not considered in this study.