Determinants of financial reporting quality: Evidence from Indonesian public sector institutions

Abstract

This study aims to examine the effects of employees’ educational level, internal control, and the use of the Sistem Aplikasi Keuangan Tingkat Instansi (SAKTI) on financial reporting quality in public sector institutions. This study employed a quantitative approach with a cross-sectional design. Data were collected through a survey of 102 employees involved in financial management and reporting and analyzed using Structural Equation Modeling–Partial Least Squares (SEM-PLS). The results indicate that employees’ educational level and internal control do not have significant effects on financial reporting quality. In contrast, the use of SAKTI has a positive and significant effect on financial reporting quality. These findings highlight the role of integrated financial information systems in supporting data accuracy, consistency, and accountability in public sector financial management. This study contributes to the public sector accounting literature by highlighting the importance of digital transformation in improving financial reporting quality in government institutions.