Dewi, Fajar Gustiawaty (2020) THE DIFFERENCE OF UTILIZATION OF FINANCIAL AND PERFORMANCE REPORT IN THE BUDGET ALLOCATION DECISION: AN EXPERIMENT OF INDONESIA’S LOCAL GOVERNMENT. International Journal of Advanced Science and Technology, 29 (4). pp. 5235-5247. ISSN 2005-4238

Full text not available from this repository.

Abstract

In this era of New Public Management, local governments are required to design performance and financial reports. According to the decision usefulness theory, financial reports and performance reports can ideally be used in decision making on budget allocations. However, the current trend denotes that performance measures are not used for decision making, budget allocation or program monitoring. On this basis, it is argued that better financial reports would increase the credibility and integrity of public finances and contribute to better management of public resources. This study was conducted using an experimental design between subject factorial design 2x2 to provide empirical evidence for decisions taken by the budget team. The subjects were inputted into 4 cells using different treatments. The results of this study show that there were no differences in the decision on budget allocation by subjects who were informed of the budget realization reports and financial performance reports (Cell 1), the subjects given the budget realization reports and non-financial performance reports (Cell 2), the subjects which were given the operational report and financial performance report (Cell 3), and the subjects which were given the realization operational report and non-financial performance report (Cell 4). These results indicate that the financial reports and performance reports did not have an influence on budget allocation decisions. Furthermore, it implies that the local government budget team needs to be continuously socialized about the importance of this information in order to enable the implementation of budgetary decisions that are efficient and effective. Keywords: Budget allocation, experiment, financial report, performance report

Item Type:	Article
Subjects:	H Social Sciences > HF Commerce > HF5601 Accounting
Divisions:	Fakultas Ekonomi dan Bisnis (FEB) > Prodi Akuntansi
Depositing User:	FAJAR GUSTIAWATY DEWI
Date Deposited:	09 Sep 2020 00:58
Last Modified:	09 Sep 2020 00:58
URI:	http://repository.lppm.unila.ac.id/id/eprint/23944

Actions (login required)

View Item