Quality of OPD Financial Reports from Internal Auditor’s
Perspective
Nurlinda
Department of Accounting, Politeknik Negeri Medan, Jl.Almamater Nomor 1, Kampus USU, Medan, Indonesia
Keywords: Internal Auditor Perspective, Financial Statements, Internal Control, Government Accounting Standards,
Mangement Commitment
Abstract: North Sumatra Province has so far obtained unqualified (WTP) opinion, but the opinion obtained is still
leaving findings that lead to recommendations for improvement from BPK RI. In general, when the
financial statements have been well monitored by internal auditors, of course the financial reports are
already good but the audit results by the BPK found that there are still quite a lot of findings such as assets
not presented at fair value, cash shortages, unrecorded expenses, administration of receivables and
inventories inadequate, inadequate presentation of receivables and allowances and the realization of goods
and services spending that cannot be believed to be reasonable due to inflated revenues to achieve targets
and others. The purpose of this study was to find out the factors that influence the quality of OPD financial
statements through the auditor's internal point of view of the OPD financial statements that they have
reviewed. This research is a quantitative study using primary data sources. Data collection techniques using
questionnaires and data analysis techniques using descriptive statistical analysis with SmartPLS tools. The
results show from the auditor's perspective that the reviewed OPD financial statements indicate that the
quality of the OPD financial statements is not influenced by the application of the government's internal
control system, the adoption of government accounting standards, and management commitment. Other
results show that management's commitment can strengthen the effect of the application of internal control
systems on the quality of OPD's financial statements, management's commitment can strengthen the effect
of applying government accounting standards to the quality of OPD's financial statements.
1 INTRODUCTION
The financial statements contain information that is
very important as a form of accountability for the
entity. The importance of the information presented
in the financial statements certainly requires the
availability of quality financial statements. Quality
financial statements must contain information that is
free from material misstatements, is accurate and
can be accounted for Mutiana, Diantimala, &
Zuraida (2017). The financial statements are
prepared through an adequate control mechanism, in
accordance with the standards and compliance with
applicable regulations and adequate disclosure of
information (Suwanda, Wiratmoko, & Lindri, 2017)
and the financial statements have reviewed the audit
process carried out by external auditors by obtaining
an opinion good (Yusniar, Darwanis, & Abdullah,
2016). According to Guy, Alderman and Winters
(1996) when the auditor believes the relationship
between economic data assertions with specified
criteria and then communicates these results to
interested users of the financial statements, it can be
stated that the financial statements have met the
audit criteria (Tandiontong, 2016) . Financial
statements that have been examined externally
contain relevant policies and procedures related to
audits concerning the ability of entities to record,
process, summarize and report financial data based
on those contained in the financial statements
(Tandiontong, 2016). Tandiontong further stated that
the transaction cycle approach the examiner is
usually used to assess control risk.
In the regional government entity, the financial
statements are produced by the Regional Apparatus
Organization (OPD) as a reporting entity through
internal supervision of the auditor (inspectorate) and
then must be reported to the Republic of Indonesia
Financial Examination Board (OPD) as the auditing
entity. From 32 Regional Government Financial
404
Nurlinda, .
Quality of OPD Financial Repor ts from Internal Auditor’s Perspective.
DOI: 10.5220/0009206404040412
In Proceedings of the 2nd Economics and Business International Conference (EBIC 2019) - Economics and Business in Industrial Revolution 4.0, pages 404-412
ISBN: 978-989-758-498-5
Copyright
c
 2021 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved

Reports (LKPD) ) 94% or 32 LKPD of them are of
unqualified status (WTP) and the remaining 6% or 2
LKPD get fair with an exception (DPR RI, 2019).
North Sumatra Province has so far obtained WTP
opinion, but the opinion obtained is still leaving
findings that lead to recommendations for
improvement from BPK RI. In general, when the
financial statements have been well monitored by
internal auditors, of course the financial reports are
already good but the audit results by the BPK found
that there are still quite a lot of findings such as
assets not presented at fair value, cash shortages,
unrecorded expenses, administration of receivables
and inventories inadequate, inadequate presentation
of receivables and allowances and the realization of
goods and services spending that cannot be believed
to be reasonable due to inflated revenues to achieve
targets and others (http://medan.bpk.go.id, 2018).
The data description shows that there are still
problems in the financial statements of the local
government. This problem eventually raises
questions about the role of control of the internal
auditor. The internal auditor (inspectorate) has a
supervisory and consultative function. Routine
monitoring will help the WTO to improve the
quality of the financial statements produced.
Problems with the Government's Internal Control
System (SPIP) are weak, financial reports that are
not in accordance with Government Accounting
Standards (SAP) and low management commitment
ultimately impact on the low quality of reports
financials generated. Previous research found that
the application of SPIP did not significantly
influence LKPD (Suwanda, 2015). In contrast to
Suwanda, Harlinda (2016); Upabayu, Mahaputra, &
Putra (2014), found that the Internal Control System
significantly affected the quality of financial
statements. Regarding the suitability of financial
statements in government accounting standards it
was found that there was a significant positive effect
on SAP implementation on the quality of local
government financial reports (KLKPD) (Upabayu et
al., 2014). Different results were found by
Gamayuni (2017) where the application of SAP had
no significant effect on LKPD. Other important
efforts to improve the quality of financial statements
are inseparable from strong management
commitment. In the public sector, management
commitment refers to the commitment of regional
heads. Mahlil & Yahya (2017) and Silviana (2012)
state that the heads of local authorities and
accounting knowledge affect the quality of financial
statements. regional government. The role of
management's commitment to improve the quality of
financial statements is logically quite strong,
because no matter how good a standard and system
is applied if without commitment management is
unable to achieve the expected goals. Referring to
the explanation above, this research is to see the
extent of the internal auditor's views on the financial
statements The review is reviewed in terms of the
application of SPIP, SAP Application and
management commitment.
2 LITERATURE REVIEW
Quality of Financial Statements
Quality is defined as "conformity to standards,
measured based on the degree of non-conformity,
and is achieved through inspection" [(Mulyana,
2010: 96); PP No. 71 of 2010]. Qualitative
characteristics that must be fulfilled in financial
statements so that quality consists of "relevant,
reliable, comparable, understandable" (PP Number
71, 2010).
Internal Control System
Referring to PP No. 60/2008, internal control is an
"integral process of actions and activities carried out
continuously by the leadership and all employees to
provide adequate confidence in achieving
organizational goals through effective and efficient
activities, financial reporting reliability, security of
assets. state and obedience to laws and regulations ".
The elements of the Internal Control System in
Republic of Indonesia Regulation Number 60 Year
2008 include "Control Environment. Risk
Assessment, Control, Information and
Communication, Monitoring Activities.
Several studies have found that the internal
control system has a significant effect on the quality
of financial statements [Erviana (2017); Kesuma,
Anwar, & Darmansyah (2017); Mailoor, Sondakh, &
Gamaliel (2017)]. These findings can be interpreted
as the application of adequate internal control that
will have an impact on the quality of the financial
statements produced.
Government Accounting Standards
It is the application of "accounting principles in
preparing and presenting Government Financial
Statements in the framework of transparency and
accountability and improving quality" LKPD [(PP
No. 71 Year, 2010); (Permendagri No. 61 of 2013),
(Erlina et al., 2017). The indicators used are 8
(eight) accounting principles and financial reporting
consisting of, "accounting basis, historical value,
Quality of OPD Financial Reports from Internal Auditor’s Perspective
405

realization, substance involving formal forms,
reality, consistency, disclosure, fair presentation".
The results showed the application of accounting
standards had a significant positive effect on the
quality of financial statements [Yusniar et al. (2016);
Rahman, Hardi, & Diyanto (2015); Nelia K (2015);
(Eriadi, Erlina, Muda, & Abdullah, 2018)].
Referring to the results of this study it can be
concluded that if the preparation of financial
statements using appropriate and adequate
accounting standards will produce quality financial
reports.
Management Commitment
Management's commitment is a commitment in
following up the findings of BPK RI's audit results
[(Silviana, 2012), (BPK Regulation No. 9 of 2009].
This construct indicator refers to RI Law Number 15
of 2004 concerning the Audit of State Financial
Management and Responsibility article 20 consisting
of "Officials must follow up the recommendations in
the audit report, the official must provide an answer
to the explanation to the BPK about the follow-up to
the recommendations in the audit report, the answer
or explanation referred to in paragraph (2) is
submitted to the BPK no later than 60 (sixty) days
after report on audit results is received, the BPK
monitors the implementation of the follow-up of
audit results as referred to in paragraph (1) ”
The obligation of regional heads is reaffirmed by
the enactment of Government Regulation No. 12 of
2019 concerning Regional Financial Management.
Based on PP No. 12 (2019) article 192, it states that
"the regional head gave a response and made
adjustments to the report on the audit results of the
Supreme Audit Board over the Regional
Government's Financial Statements. Officials known
to have not carried out the obligations referred to in
paragraph (1) may be subjected to administrative
sanctions in accordance with the provisions of the
legislation in the field of employment and or
criminal sanctions ”. Silviana (2012); Tambingon,
Yadiati, & Kewo (2018); Kibet (2016) found a
positive effect on the commitment of regional heads
on the quality of financial statements. These findings
indicate a high commitment from management /
management that will increasingly have an impact
on improving the quality of financial statements
[(Fitriani, 2017); (Tambingon et al., 2018)].
3 METHOD
This research is a quantitative study with primary
data. The data collection technique uses
questionnaires. All instrument statements in this
study were measured using a Likert scale.
Measurement of variable indicators in this study
used weighting assessment using score 1 to 5 for
each respondent's answer to the statement. The
selection of the right measuring instrument will
determine the validity or validity of a research result.
Mistakes in choosing a measuring instrument will
cause the results obtained will not describe the real
situation. Sekaran (2010) states "to overcome this,
two types of tests are needed, namely the test of
validity (validity or validity test) and the test of
reliability used to test the sincerity of respondents'
answers". Data processing devices in the equation
model in this study use PLS. The research model
looks like the following Figure 1:
Figure 1.
4 RESULTS AND DISCUSSION
Based on the results of the calculation of the sample
of this study were 77 respondents. Of the 100
questionnaires distributed by returning
questionnaires, only 78 questionnaires, respondents
were executors of the review in the financial
statements of the North Sumatra Provincial
Government, Namely Inspectorate Level 1.
Distribution of the questionnaire is explained in
table 5.1 below:
Table 1 Distribution of Questionnaires
Questionnaires were distributed 100
Questionnaires returned 78
Questionnaires completed 1
Questionnaires not completed 77
Source : research data processed (2019)
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406

The return rate of the questionnaire was 77%,
this amount was sufficient because it was in
accordance with the number of samples needed in
this study. This research model uses a Likert scale of
1 to 5 so if the maximum total respondent answers
then the maximum total score obtained is 5 x 77
questionnaire = 382.
Research Respondent Demographics
The information presented in table 2 below shows
that of the 77 respondents working with positions as
First, Intermediate and Young Auditor, Supervisory
Auditor, P2UPD and government supervisors. As
many as 31 Auditors or as much as 40.25% have the
position of Expert Audit, as many as 3 people or as
much as 3.9% work with positions as supervisory
audits. Internal auditors who work in PU2PD
positions are 17 people or 22.07% and the rest hold
positions as government supervisors as many as 26
people or as much as 33.77%. More complete
information about the position of the respondent is
explained in table 2 below:
Table 2 Demographics of Respondents by Position
Position Total %
First Auditor 17 22,07
Intermediate Auditor 3 3,90
Young Auditor 11 14,29
Supervisory Auditor 3 3,90
P2UPD 17 22.07
Government Supervisors 26 33,77
Total 77 100.00
Source: 2019 research results (data processed)
Related to the education level of business
people, it can be seen in table 3. Information about
the education level of respondents in the level 1
inspectorate of North Sumatra Province is available.
From the level of S1 to S3, it is obtained that the
majority of respondents in this sample have a
Bachelor Degree (S1) education, namely 49 people
or 63.64% of the amount of education is sufficient
for an auditor to assume the position. other data
shows as many as 27 people or 35.06% of them have
a Bachelor's Degree (S2) education and only 1
person or 1% have a Bachelor's Degree (S3)
education.
Table 3 Demographics of Respondents by Education
Level
Education Total %
S2 49 63,64%
S1 27 35,06%
S3 1 1,3%
Total 77 100%
Source: 2019 research results (data processed)
From a total of 77 respondents it was found that
46 respondents came from an economic background.
Although the auditor's education level is adequate,
but from the total respondents obtained data of 1
person or 1.3% who have an accounting education
background. This is quite surprising considering that
these internal auditors function to oversee the OPD
and provide consultations on financial governance.
Referring to the lack of auditors with accounting
education backgrounds while in the Province of
North Sumatra there are 34 Regional Apparatus
Organizations (OPDs) certainly very inadequate.
respondents showed management background of 17
people or 22.1%. Other information shows that as
many as 28 respondents or 36.4% are staff auditors
with economic education backgrounds. A fairly high
number indicates that the majority of auditors have
an economic background. The rest of the data shows
that auditors with non-economic backgrounds are 31
people or 40.23%. In total, 31 people were scattered
in the legal background of 11 people or 14.3%,
Agriculture as many as 2 people or 2.6%, Social as
many as 9 people or 11.7% and Engineering as
many as 9 people or 11.7%. Seeing from the many
education it is natural that internal auditors must be
equipped with different educational backgrounds
given the scope of audits needed will also vary.
However, with the lack of respondents with
accounting backgrounds deserves attention. More
complete distribution of respondents' data about
educational background can be seen in table 4
below.
Table 4 Demographics of Respondents by Department of
Education
Department of Education Number %
Accountin
g
1 1,3%
Management 17 22,1%
Econom
y
28 36,4%
Law 11 14,3%
Agriculture 2 2,6%
Social 9 11,7%
En
g
ineerin
g
9 11,7%
Total 77 100%
Source : research data processed (2019)
Quality of OPD Financial Reports from Internal Auditor’s Perspective
407

Table 5 shows the distribution of respondents'
data on length of service. Of the 77 respondents
indicated they had worked from zero to past 30
years. As many as 22 people or 28.57% have worked
for 10-15% and 12 people or 15.58% have worked
for 16-20 years. Other data shows that as many as 13
people or 16.88% worked for 21-25 years, and the
rest 17 or 22.08% respectively and 13 or 16.88%
worked for 26-30 years and> 30 years respectively .
This data illustrates that respondents actually have
quite experienced considering they have worked for
more than 10 years.
Table 5 Demographics of Respondents by Length of Work
Length of Work Total %
10-15 Years 22 28.57%
16-20 Years 12 15.58%
21-25 Years 13 16.88%
26-30 Years 17 22.08%
> 30 Years 13 16.88%
Total 77 100.00%
Source: 2019 research results (data processed)
Data Quality Testing
Data is processed using Structural Equiation
Modeling (SEM) with the Partial Least Square
(PLS) altrenative method. Quantitative data analysis
using statistical analysis with SEM-PLS tools
consists of two stages. The first stage is carried out
to see the validity and the reliability of the
measuring instrument that is manifested by the data
collected. After these two things are fulfilled, the
second stage is carried out to analyze the data in
accordance with the proposed hypothesis. According
to Barclay, Higgins, & Thomson (1995) in SEM-
PLS the first stage is called the measurement model
or outer model testing and the second stage is called
the structural model or inner model testing.
Testing the Outer Research Model (Outer Model)
Assessing Outer Loading
Figure 2: Full Model Path Diagram with Moderating
Variables
Checking the loading value of each
corresponding latent variable indicator can be done
in two ways, namely by looking at the path diagram
or by selecting the final result outer loadings menu
(Sentosa, 2018). Through the calculation using
SmartPLS, a full model path diagram is obtained
which shows the path diagram display along with
the latent variable complete with the indicators
The magnitude of the outer loading of each
indicator that forms the variables of Y, X1, X2, and
X3. All indicators of variables Y (Quality of
Regional Financial Statements), X1 (Application of
Internal Control Systems), X2 (Application of
Government Accounting Standards), and X4
(Management Commitment ) refers to the opinion
above, then all indicators meet the reliability and
validity requirements and can be used for further
analysis.
Correlation value / path coefficient between
latent variables with other variables (β) according to
the hypothesis that was built. The path coefficient
column in the table shows the values of each
hypothesis (H), while the value of the tcount column
shows how significant the relations are among the
latent variables and can be said to be a significant
relation if the t-value of the value of table 1.993. For
H1, it shows a path coefficient of 0.370 and a
calculated value of 0.942. for H2 shows a path
coefficient of 0.518 and a calculated value of 1.462.
H3 shows the path coefficient of -0.037 and t value
of tcount at the value of 0.178, while testing the path
coefficient (β) and Value of tcount by entering the
management commitment variable as a moderating
variable shows the results according to the data seen
in table 7.
The results of calculations for Hypothesis 1 (H1)
in tables 6 and 7 can be seen a decrease in the value
of β and the value of the t-value before and after
moderation by the variable management
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408

commitment. For H1, where the β value before
moderation was 0.370, it dropped to -0.413, while
the t-value value before being moderated was 0.942,
but after being moderated by management
commitment, the t-value value increased to 2.704.
The calculation for Hypothesis 2 (H2) where a
decrease in the value of β and the value of the t-
value before and after moderation by the variable
management commitment. For H2, where the β
value before moderation was 0.518, it rose to -0.413
while the value of t-count before being moderated
was 1.462, but after being moderated by
management commitment, the t-value dropped to
0.744. For Hypothesis 3 (H3) there are also
differences in calculations before and after
moderation by the Management commitment
variable. The β value for H3 before being moderated
is -0.037 and after being moderated by the
management commitment variable to be -0.046,
while the value of t-value before being moderated is
0.178, but after being moderated by management
commitment the t-count value rises to 0.271. The
path coefficient for multiplication variable
multiplication (KM x SPI) gets a value of 0.548 with
a value of tcount of 2.457 and the path coefficient
for multiplication of a moderating variable (KM x
SAP) gets a value of -0.5001 with a value of tcount
of 2.070
In addition to the path coefficient, the structural
model also needs to be calculated the coefficient of
determination (R2) of each endogenous latent
variable. Through the coefficient of determination
(R2) it can be seen that the Implementation of the
Government Internal Control System (X1), the
Application of Government Accounting Standards
(X2), Management Commitments (X3)
simultaneously have an effect of 69.8% on the
Quality of Regional Government Financial
Statements. Then testing (R2) by involving the
Management Commitment variable as a moderating
variable obtained a simultaneous result of 73.3% of
the Quality of Financial Statements. The value (R2)
without the moderating variable is 69.8% and the
moderating variable (R2) becomes 73.3%.
Cronbach alpha values indicate compliance with
standards> 0.7 (George & Mallery, 2003). Cronbach
alpha value> 0.7, while for the value of construct
reliability and validity> 0.7. Referring to the
Cronbach alpha value and construct reliability and
validity means that it can be stated that the data has
good and reliable internal consistency. Valid AVE
root value if AVE value> 0.5. The AVE root column
shows the value that matches the entered criteria,
thus it can be concluded that the data is valid for
further processing.
4.1 Discussion
To enforce the hypothesis in addition to seeing the
path coefficient must also see the value of t
arithmetic. The value of tcount obtained must be
tested again by comparing the value of tcount with
ttable. The value of ttable can be obtained by
looking at student-t. If the tcount> ttable then the
hypothesis can be accepted. a total of 231 data then
the value of the table is 1,993. Table 6 shows the
results of the hypothesis.
Table 6 shows hypothesis testing by including
management commitment variables as moderating
variables. The results of multiplication of
management commitment variables with the variable
implementation of the internal control system shows
the effect on the quality of financial statements.
With management commitment as a moderating
variable on the effect of management processes on
the quality of financial statements, it shows that
management commitment strengthens the
relationship between internal control systems and
commitment.
Table 6 Pathway Coefficients with Moderation Variables
(β) T
count
Value
t
table
Value
P
Values
Informa
tion
X1
Y
1,366 2,704 1,993 0.007
Signific
antly
positive
effect
X2
Y
-0,413 0,744
1,993
0.457
No
effect
X3
Y
-0,046 0,271
1,993
0.787
No
effect
X3*
X1
Y
0,548 2,457 1,993 0.014
Signific
antly
positive
effect
X3*
X2
Y
-0,501 2,070 1,993 0.039
Signific
antly
positive
effect
Source: SmartPLS Output Attachment
The result can be seen from the tcount of 2.457>
1.993 which means that there is a positive and
significant influence on the implementation of the
internal control system on the quality of the financial
statements. Management's commitment is also able
Quality of OPD Financial Reports from Internal Auditor’s Perspective
409

to strengthen the effect of the application of
government accounting standards on the quality of
the financial statements where the tcount of 2,070>
1,993 can be interpreted there is a positive and
significant effect of the application of government
accounting standards to the quality of financial
statements.
Internal Auditor's Perception on the Quality of
Financial Statements based on the
Implementation of the Internal Control System
Statistical test results without including moderating
variables indicate that the quality of financial
statements is not influenced by the application of the
internal control system. This is in line with the
results of BPK audits in 2017 and 2018 which state
that the financial statements have not met the
elements of adequate internal control. Although the
opinion obtained by the Government of the Province
of North Sumatra is reasonable without scrutiny, this
is not accompanied by a lack of recommendations
received. This inconsistency is also seen in the level
of maturity. If the opinion obtained is fair without
exceptions (WTP), the minimum level of maturity is
at level 3 "undefined". However, due to the low
implementation of policies and procedures, as well
as incomplete relevant documents and inadequate
communication of policies and procedures and the
not yet fully implemented written policies and
procedures, making the achievement of the maturity
level of the North Sumatra Provincial Government is
at level 2 "developing". This unsynchronization
ultimately led to the internal control system not
affecting the quality of financial statements.
Internal Auditor's Perception on the Quality of
Financial Statements based on the Application of
government accounting standards
Statistical test results show that the quality of
financial statements is not influenced by the
adoption of government accounting standards.
Referring to these results indicate that government
accounting standards do not improve the quality of
financial statements. The enactment of government
accounting standards based on PP No. 71 of 2010
which gave birth to an accrual basis of accounting
may still confuse OPD where financial managers are
not entirely educated in accounting. The enactment
of Permendagri number 64 of 2013 which regulates
reports that must be compiled is an obstacle for
OPD. Lack of training and technical guidance for the
staff preparing the financial statements in the end the
resulting financial statements are not adequate.
Weak coordination between subsections, between
PPTK in the end consolidation of financial
statements becomes slow to do. The level of PPTK
education that does not all understand accounting
problems becomes a problem where recognition of
the value of assets, liabilities, opinions, expenses
and expenditure is finally reflected. related to assets.
The assets presented have not shown fair value and
there are still assets with zero value. Referring to the
Government Accounting Standards, the governance
of financial transactions and the accounting basis
that must be carried out must be standardized. Thus,
recognition, measurement and disclosure all refer to
Government Accounting Standards.
Internal Auditor's Perception on the Quality of
Financial Statements based on the Application of
government accounting standards
The results of the study without including
moderation variables also indicate that the quality of
financial statements is not influenced by
management commitment. From the perspective of
the internal auditor, even though management
commitment is good if there is no internal control
system in the OPD environment and the application
of accounting standards is still not good, of course
there is no benefit. strong management commitment,
but in the entity there are no sanctions and reward
mechanisms that ultimately cause working
conditions to be not conducive. No matter how
strong a commitment is, if it is not regulated, a
sanction and reward mechanism will eventually
become a mere formality session.
Management's commitment strengthens the
influence of the internal control system on the
quality of financial statements.
Statistical test results without including
management commitment as a variable show the
results that there is no influence between the internal
control system with the quality of the financial
statements. that the inspectorate believes that the
OPD financial statements that they reviewed have
been prepared through an adequate internal control
system if management's commitment is strong
enough. The Inspectorate believes that committed
management is able to maximize the dimensions of
internal control such as the control environment,
application of risk, control activities, information
and communication, monitoring to be effective in
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410

controlling the process of preparing financial
statements adequately.
Management's commitment strengthens the
influence of Auditing Accounting Standards on
the Quality of Financial Statements.
Hypothesis test results indicate that management
commitment is able to strengthen the effect of the
adoption of government accounting standards on the
quality of financial statements, where government
accounting standards are a standard for determining
the appropriateness or appropriateness of a financial
statement preparation mechanism in which
government accounting standards are binding
regulatory regulations and their application is forced
( mandatory). This research also found data that the
understanding of the recognition of revenue,
expenses, assets and liabilities on an accrual basis is
still quite low in OPD. The results of this
achievement are relevant to data showing that staff
who deal with financial statements have accounting
education of only 13.4%. The lack of HR with
accounting competence is a problem in itself.
Referring to the above data when management's
commitment is strong, management will endeavor to
improve the competence of financial management
whether through ASN recruitment as needed or
conduct adequate training and technical guidance so
that ASN related to financial management has a
strong understanding of SAP adoption. often the
rules change so that it causes OPD to be difficult to
understand the new rules while the old rules have
not been well implemented. Understanding of
accounting standards is still inadequate, lack of
understanding of respondents on weak accrual
assumptions, and staff lack of understanding of the
mechanism of recording on an accrual basis,
especially PPTK, resulting in inadequate financial
statements. Weakness of understanding on the basis
of Accounting, Historical Cost (Realization),
Realization, Substance Over Form, Periodicity,
Consistency, Full Disclosure, Fair Presentation be a
cause of misstatement in the financial statements,
determination of the value of assets that are not fair,
disclosure of the value of inventory that is not
relevant.This weakness is often the finding of an
examination conducted both internal and external.
5 CONCLUSIONS
The results of this study can be concluded from the
auditor's point of view on the OPD financial
statements reviewed as follows:
1. The quality of OPD financial statements is not
influenced by the implementation of the
government's internal control system.
2. The quality of OPD financial statements is not
influenced by the adoption of government
accounting standards.
3. The quality of OPD financial statements is not
influenced by management commitment.
4. Management's commitment can strengthen the
influence of the implementation of internal
control systems on the quality of OPD financial
statements.
5. Management's commitment can strengthen the
effect of applying government accounting
standards to the quality of OPD financial
statements.
ACKNOWLEDGEMENTS
The authors gratefully acknowledge that the present
research is supported by Politeknik Negeri Medan.
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APPENDIX
If any, the appendix should appear directly after the
references without numbering, and not on a new
page.
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