Influence of Audit Opinion of Audit Board Financial Impact on Regional Government Financial Performance (Case Study on Regency and City Governments in West Sumatra Province 2022 - 2024)

Mika Mutiara Br Kesogihin; Putri Nidiaty; Albar Albuqhory; Elvandry Pasaribu; Anggi Alya Sary Devi Bangun; An Suci Azzahra

doi:10.55227/ijerfa.v4i2.442

Authors

Mika Mutiara Br Kesogihin Accounting Study Program, Faculty of Social Sciences, Panca Budi Development
Putri Nidiaty Accounting, Social Science, Pembangunan Panca Budi University, Indonesia
Albar Albuqhory Accounting, Social Science, Pembangunan Panca Budi University, Indonesia
Elvandry Pasaribu Accounting, Social Science, Pembangunan Panca Budi University, Indonesia
Anggi Alya Sary Devi Bangun Accounting Study Program, Faculty of Science – Social, Panca Budi Development University, Medan Indonesia
An Suci Azzahra Accounting, Social Science, Pembangunan Panca Budi University, Indonesia

DOI:

https://doi.org/10.55227/ijerfa.v4i2.442

Abstract

This study aims to evaluate the influence of the audit opinion from the Supreme Audit Agency (BPK) on the financial performance of 18 district/city governments in West Sumatra Province for the 2021–2024 period. The researchers used secondary data sourced from the official websites of the BPK and the Statistics Indonesia (BPS) of West Sumatra Province using a simple linear regression analysis method. The results indicate that the level of fiscal independence in the region is still relatively low, with the majority of Decentralization Ratios below 0.20. Statistical testing found that the audit opinion had a negative and significant effect on regional financial performance, as indicated by a regression coefficient value of -0.054 and a significance value of 0.007 <0.05. This indicates that each increase in the audit opinion variable is followed by a decrease in financial performance. Theoretically, this phenomenon is related to the current stricter correction and control mechanisms in response to previous period performance to maintain organizational stability.

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