Factors affecting the usefulness of governments' financial statements in Indonesia

This research aims to analyse factors affecting the usefulness of governments' financial statements in Indonesia from preparers and user's perspective. Governments' financial statements may be ignored as they have no direct impact on stakeholders. Thus, this research would identify external and internal factors which significantly affect the usefulness of the financial statement. Questionnaires were sent to preparers and users in central and local government officices all over Indonesia. The research method is based on a quantitative method using multiple regression and Principle Component Analysis (PCA). Overall results show that according to both preparers and users, the external factors that positively affect the usefulness of the governments' financial statements are pressure from the internal auditor and society, while surprisingly pressure from the press negatively affect the usefulness of governments' financial statements. For internal factors, only regulation has a positive effect on the usefulness of governments' financial statements.