Local Government Characteristics and Quality of Financial Reporting in Indonesia

This study aim to propose measurement of local governments financial reports (LGFR) quality in Indonesia and compare the quality of financial reports based on the local governments‘ characteristics. Measurement of LGFR quality is based on qualitative characteristics of government financial statement. Local governments characteristics consists of size, wealth, age, and number of legislative. The sample used is 1002 local governments during 2016-2017 using the content analysis method and the mean difference test. The result show that the mean value of LGFR quality in Indonesia is 37,78 or only 68,69% from the full score. We also found that larger size of local governments have better quality of financial reports compared to smaller size of local governments. On the other hand, local governments with greater wealth, longer age, and larger member of legislative have lower quality financial reports compared to local governments with smaller wealth, shorter age, and smaller member of legis lative.