Good governance and corruption in local governments: The role of internal control and audit
This study investigates the effects of internal controls, internal audit functions, audit opinions, and capital expenditures on corruption in local governments. Using a panel dataset of 519 local governments over the 2018–2022 period (2,595 observations), the study employs a fixed-effect regression...
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| Format: | Article |
| Language: | English |
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Universitas Islam Indonesia
2025-06-01
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| Series: | Jurnal Akuntansi dan Auditing Indonesia |
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| Online Access: | https://journal.uii.ac.id/JAAI/article/view/39727 |
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| _version_ | 1849685299125288960 |
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| author | Farhan Shidqi Zef Arfiansyah |
| author_facet | Farhan Shidqi Zef Arfiansyah |
| author_sort | Farhan Shidqi |
| collection | DOAJ |
| description |
This study investigates the effects of internal controls, internal audit functions, audit opinions, and capital expenditures on corruption in local governments. Using a panel dataset of 519 local governments over the 2018–2022 period (2,595 observations), the study employs a fixed-effect regression with robust standard errors. The results indicate that internal controls and a more mature internal audit function significantly reduce corruption, while capital expenditure is positively associated with corruption levels. By contrast, audit opinion and lower-level audit capabilities have no significant impact. These findings highlight the importance of strengthening internal governance mechanisms to reduce corruption risk in public sector entities. Policy implications are directed toward local government leaders, auditors, and regulators to enhance internal oversight, professional competence, and qualitative judgment in financial reporting.
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| format | Article |
| id | doaj-art-e7eaa87f3c6d48f8864645c366d22728 |
| institution | DOAJ |
| issn | 1410-2420 2528-6528 |
| language | English |
| publishDate | 2025-06-01 |
| publisher | Universitas Islam Indonesia |
| record_format | Article |
| series | Jurnal Akuntansi dan Auditing Indonesia |
| spelling | doaj-art-e7eaa87f3c6d48f8864645c366d227282025-08-20T03:23:11ZengUniversitas Islam IndonesiaJurnal Akuntansi dan Auditing Indonesia1410-24202528-65282025-06-01291Good governance and corruption in local governments: The role of internal control and auditFarhan Shidqi0Zef Arfiansyah1Department of Public Sector Accounting, Polytechnic of State Finance STAN, Banten, IndonesiaDepartment of Public Sector Accounting, Polytechnic of State Finance STAN, Banten, Indonesia This study investigates the effects of internal controls, internal audit functions, audit opinions, and capital expenditures on corruption in local governments. Using a panel dataset of 519 local governments over the 2018–2022 period (2,595 observations), the study employs a fixed-effect regression with robust standard errors. The results indicate that internal controls and a more mature internal audit function significantly reduce corruption, while capital expenditure is positively associated with corruption levels. By contrast, audit opinion and lower-level audit capabilities have no significant impact. These findings highlight the importance of strengthening internal governance mechanisms to reduce corruption risk in public sector entities. Policy implications are directed toward local government leaders, auditors, and regulators to enhance internal oversight, professional competence, and qualitative judgment in financial reporting. https://journal.uii.ac.id/JAAI/article/view/39727corruptionInternal ControlInternal AuditAudit Opinioncapital expenditure |
| spellingShingle | Farhan Shidqi Zef Arfiansyah Good governance and corruption in local governments: The role of internal control and audit Jurnal Akuntansi dan Auditing Indonesia corruption Internal Control Internal Audit Audit Opinion capital expenditure |
| title | Good governance and corruption in local governments: The role of internal control and audit |
| title_full | Good governance and corruption in local governments: The role of internal control and audit |
| title_fullStr | Good governance and corruption in local governments: The role of internal control and audit |
| title_full_unstemmed | Good governance and corruption in local governments: The role of internal control and audit |
| title_short | Good governance and corruption in local governments: The role of internal control and audit |
| title_sort | good governance and corruption in local governments the role of internal control and audit |
| topic | corruption Internal Control Internal Audit Audit Opinion capital expenditure |
| url | https://journal.uii.ac.id/JAAI/article/view/39727 |
| work_keys_str_mv | AT farhanshidqi goodgovernanceandcorruptioninlocalgovernmentstheroleofinternalcontrolandaudit AT zefarfiansyah goodgovernanceandcorruptioninlocalgovernmentstheroleofinternalcontrolandaudit |