Integration of Local Wisdom in Participatory Accounting Systems for Community Empowerment in Supporting Sustainable Village-Owned Enterprise Development

This article explores the integration of local wisdom into participatory accounting systems as a strategic approach to strengthening the governance of Village-Owned Enterprises (BUMDes) in Indonesia. BUMDes are designed as instruments for mobilizing local potential, fostering economic independence, and supporting sustainable rural development. However, many BUMDes face challenges in accountability, transparency, and financial management capacity. Drawing upon conceptual analysis, literature review, and case studies, this study highlights that participatory accounting not only functions as a technical financial tool but also as a social mechanism that enables meaningful community engagement in planning, budgeting, reporting, and monitoring. Integrating local wisdom, such as musyawarah (deliberation) and gotong royong (cooperation), along with customary environmental rules, strengthens social trust, enhances legitimacy, and ensures inclusivity in financial accountability. The findings reveal that participatory accounting, when rooted in local cultural values, empowers communities to transition from passive beneficiaries to active stakeholders, thereby increasing ownership and sustainability of BUMDes programs. Moreover, digitalization of accounting systems, if designed with cultural sensitivity and simplicity, further improves transparency, reporting accuracy, and public accessibility. Nonetheless, challenges persist in terms of digital literacy, infrastructure limitations, and harmonization between local norms and formal regulations. The study contributes theoretically to the discourse on rural governance and practically provides insights for BUMDes managers, policymakers, and stakeholders on designing culturally resonant, participatory, and adaptive accounting models. By integrating local wisdom, social participation, and appropriate technology, BUMDes can balance economic performance with social, cultural, and environmental sustainability.