Good University Governance and Its Implication to Quality of Financial Reporting in the Public Service Agency

Abstract

With the presence of higher education autonomy, both in financial and academic fields, provides the opportunity to the higher education to transform it become public service agency. By these alteration, higher education has to apply the principles good university governance that used as a measure of success of public service agency in order to improve the quality of higher education so as competitive global and regional arena. Therefore, this study aims to examine the effect of the role of internal audit unit, the internal control system, the organizational commitment to good university governance and its implications on the quality of financial reports. Research was conducted on IAIN Mataram and Mataram University. The sampling technique by took purposive sampling with criteria public service agency management officer, treasury officials and compilers of financial statements in 60 people. The data analysis utilized partial least square with WarpPLS 4.0 program. The results showed that the role of internal audit unit has a positive effects and there was no significant effect against good university governance, internal control systems and organizational commitment and positive significant effect against good university governance, also good university governance has a positive and significant impact on the quality of financial statements of public service agency. The implications of this study explain the importance of the factors the role of internal audit units, internal control systems and organizational commitment toward to good university governance and developing the quality of financial statements, as described in agency theory, the theory of goal setting and stewardship theory. The leaders should provide support to the internal audit unit to carry out its role as a function of supervision/investigation to the optimum way. The auditors to enhance the independence and professional capability. Improving the internal control system and the organization's commitment to good university governance can be realized so that the quality of financial statements better to increase the Audit Board of the Republic of Indonesia opinion on the financial statements and improve the quality of higher education.