THE INFLUENCE OF FISCAL DECENTRALIZATION AND GOVERNMENT PERFORMANCE ON THE ACCOUNTABILITY OF FINANCIAL REPORTING: MODERATING ROLE OF INTERNAL CONTROL FINDINGS (AN EMPIRICAL STUDY ON PROVINCIAL, REGENCY, AND MUNICIPAL GOVERNMENTS IN SUMATRA AND JAVA I

This study aims to analyze the influence of fiscal decentralization and government performance on the accountability of local government financial reporting, with findings of internal control as a moderating variable. The research focuses on provincial, regency, and municipal governments in the Sumatra and Java Islands for the year 2022. A quantitative research design with a causal approach is adopted and grounded in Signalling Theory. The study utilizes secondary data from 2022, obtained from the Audit Reports (LHP) published on the official website of the Audit Board of the Republic of Indonesia (BPK RI) and local government performance data (EKPPD) sourced from the official Open Data platform of the Directorate General of Regional Autonomy. The population includes all local governments in Sumatra and Java in 2022. A purposive sampling technique was applied, resulting in a total of 282 local governments as the final sample. Data analysis was conducted using binary logistic regression and moderated regression analysis (MRA) with SPSS version 30. The findings reveal that dependence on the central government has a negative effect, while government performance has a positive effect on the accountability of local government financial reporting. Fiscal independence does not significantly affect reporting accountability. Moreover, the findings of internal control weaknesses do not significantly moderate the relationship between fiscal decentralization or government performance and the accountability of local government financial reporting.