Governance as a Mediating Factor: Determinants of the Quality of Regional Government Financial Reports from the Perspective of Systems and Human Resource Quality

Abstract

This study analyzes the effects of the internal control system, accounting system, and human resource quality on the financial statement quality of the Brebes Regency Government, with good corporate governance (GCG) as mediator. Data from 200 civil servants across 50 regional agencies, selected by purposive sampling, were analyzed using PLS-SEM. The results show that all three determinants positively affect GCG. The accounting system and GCG directly affect financial statement quality, while the effects of the internal control system and human resource quality are fully mediated by GCG. Strengthening governance is therefore the key lever for improving local government financial reporting quality. Keywords: Internal Control System; Accounting System; Human Resource Quality; Good Corporate Governance; Financial Statement Quality; Local Government; PLS-SEM