THE EFFECT OF INFORMATION TECHNOLOGY UTILIZATION, HUMAN RESOURCE COMPETENCE, AND INTERNAL CONTROL SYSTEM ON THE QUALITY OF FINANCIAL REPORTING AT THE NATIONAL STANDARDIZATION AGENCY

Abstract

This study aims to analyze the effect of information technology utilization, human resource (HR) competence, and internal control systems on the quality of financial reporting at the National Standardization Agency of Indonesia (Badan Standardisasi Nasional/BSN). The study is motivated by inconsistent findings in prior research on the effect of these three variables on financial report quality, as well as the absence of studies specifically examining these variables within a Non-Ministerial Government Institution such as BSN, which has consistently received Unqualified Opinions (WTP) over the past eight years. This study employs a quantitative approach using a survey method, with questionnaires distributed to 105 employees of the Bureau of Finance and General Affairs and the Inspectorate of BSN, selected through saturated (census) sampling. Data were analyzed using Partial Least Square Structural Equation Modeling (PLS-SEM) with SmartPLS 4.0 software, covering evaluation of both the measurement model (outer model) and the structural model (inner model). This research is grounded in Stewardship Theory and the Resource-Based View (RBV) Theory. The results show that Information Technology Utilization (path coefficient = 0.486; p = 0.000) and Internal Control System (path coefficient = 0.484; p = 0.000) have a positive and significant effect on Financial Reporting Quality, while HR Competence (path coefficient = -0.076; p = 0.508) has no significant effect. The three independent variables jointly explain 68.4% of the variance in Financial Reporting Quality (R-Square = 0.684). These findings are expected to provide input for BSN in formulating policies to sustain and continuously improve the quality of its financial reporting.