DETERMINANTS OF AUDIT OPINIONS ON THE FINANCIAL STATEMENTS OF PROVINCIAL GOVERNMETS IN INDONESIA
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Abstract
Audit opinions issued by the Audit Board of the Republic of Indonesia (BPK RI) serve as an important indicator of the quality and accountability of public financial management in provincial governments. However, the persistence of corruption cases in several provincial governments that have received favorable audit opinions raises concerns regarding the determinants of audit opinions in the public sector. This study aims to examine the effect of audit findings, follow-up of audit recommendations, local government age, and corruption level on audit opinions of provincial governments in Indonesia. This study employs a quantitative approach using secondary data obtained from the Audit Board of the Republic of Indonesia (BPK RI) and corruption case data derived from the annual reports of the Corruption Eradication Commission (KPK). The sample consists of 34 provincial governments in Indonesia during the 2020–2024 period, resulting in 170 observations. Logistic regression analysis was employed to test the proposed hypotheses. The findings reveal that follow-up of audit recommendations positively influences audit opinions, whereas corruption level negatively influences audit opinions. Meanwhile, audit findings and local government age do not significantly affect audit opinions. These findings highlight the importance of implementing audit recommendations and strengthening integrity in public financial management to support the achievement of favorable audit opinions. This study contributes to the public sector accounting literature by providing empirical evidence on the determinants of audit opinions in Indonesian provincial governments.
Keywords:
Audit Opinion Audit Findings Follow-Up of Audit Recommendations Local Government Age Corruption LevelReferences
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