The follow up of auditing results, accountability of financial reporting and mediating effect of financial loss rate : an empirical study in Indonesian local governments

Abstract

This study aimed to analyze the effect of the follow-up of financial investigation results on the financial reporting accountability and to examine the influence of follow-up of financial investigation on the level of financial losses. This research was conducted in all the municipalities and cities in Indonesia by purposive sampling method from the period of 2011-2014, with the number of observations as much as in 1152. Data analysis was performed with the Structural Equation Model (SEM) with Warp-PLS Program 5.0 and Sobel test method to test the mediating variable. The results showed that follow-up of financial investigation reduces the level of financial losses, thereby increasing the accountability of local government financial reporting.