HUMAN RESOURCE COMPETENCY AND LEADER’S COMMITMENT AS DETERMINANT OF EFFECTIVENESS IN FIXED ASSETS ADMINISTRATION TOWARD QUALITY OF FINANCIAL STATEMENT

Abstract

Administration of fixed assets (state property/BMN) in Indonesia still one of the the major problems for some of government agencies to achieve the best opinion from the Audit Board of the Republic of Indonesia (BPK-RI). This study aims to examine the determinants that influence the effectiveness of the fixed assets administration which include the Human Resource Competency and Leader’s Commitment, as well their implications on the Quality of Financial Statements in Regional Office of National Land Agency in West Nusa Tenggara Province (BPN NTB). This Research used a quantitative method with an explanatory approach. A total of 55 respondents were taken with purposive from employees who are directly related in fixed assets administration and financial reporting in BPN NTB wherein analyze helped by using SEM-PLS application with software WarpPLS 3.0. The result showed that the Human Resources Competency and Leader’s Commitment have a positive and significant impact toward the effectiveness of the fixed assets administration; likewise the Effectiveness of Fixed Assets Administration also has positive and significant impact toward Quality of Financial Statement in BPN NTB. The testing also showed that Effectiveness of Fixed Assets Administration have role as a mediating effect factor for relation between Human Resource Competency toward Quality of Financial Statement whilst not for relation between Leader’s Commitment toward Quality of Financial Statement. The Implication of this study can be used as a notice or warning system for financial managers or policy maker in government agencies that to get the better quality in financial statements and get the best opinion from BPK-RI, effectiveness of fixed assets administration are very crucial factor, and the effectiveness of fixed assets's administration can be acheive by the synergized between competent human resource and support of leaders who have a strong commitment.