Digital Governance and Financial Reporting Quality: Evidence from SIPD Implementation

Abstract

Improving the quality of local government financial reporting remains an important challenge despite the increasing implementation of digital governance systems. This study examines the influence of Sistem Informasi Pemerintahan Daerah (SIPD) implementation on financial reporting quality and investigates the moderating role of information technology utilization. Using a quantitative explanatory design, data were collected from 179 respondents within regional government organizations and analyzed using Moderated Regression Analysis. The findings reveal that SIPD implementation significantly improves financial reporting quality, while information technology utilization both improves financial reporting quality and strengthens the positive effect of SIPD implementation. The study extends the Technology–Organization–Environment framework by demonstrating that information technology utilization serves as a critical organizational capability that enhances the effectiveness of digital governance. Practically, local governments should prioritize user capability, digital readiness, and effective technology utilization to maximize the benefits of SIPD implementation and improve financial reporting quality, accountability, and transparency.Keywords: SIPD implementation; digital governance; financial reporting quality; information technology utilization; local government finance