International Journal of Scientific & Technology Research

IJSTR@Facebook IJSTR@Twitter IJSTR@Linkedin
Home About Us Scope Editorial Board Blog/Latest News Contact Us

IJSTR >> Volume 7 - Issue 11, November 2018 Edition

International Journal of Scientific & Technology Research  
International Journal of Scientific & Technology Research

Website: http://www.ijstr.org

ISSN 2277-8616

Usefulness Analysis Of Accrual Based Accounting Information On Local Government Financial Statement: A Qualitative Study

[Full Text]



Rahmad Efendi, Fajar Gustiawaty Dewi, Rindu Rika Gamayuni



accrual basic, framing theory, public sector accounting, qualitative, usefulness information.



This study aims to explain the usefulness of accrual-based accounting information on local government financial statements, using framing theory analysis. Informants in the study amounted to 27 people in the Lampung Provincial Government consisting of Regional Government Budget Team (TAPD) 15 people and Government Internal Supervisory Apparatus (APIP) 12 people. Data collection techniques by semi-structured interviews, test the validity of the data using triangulation and analysis methods and qualitative data management using NVivo version 12 software. The results showed that the accrual accounting information had not been useful by the local government in decision making. Furthermore, the results of the research are presented by framing usefulness of accrual-based accounting information on local government financial statement including Diagnosis (problem): System, accounting information system is not full accrual, not integrated with planning and asset subsystems; Human Resources (HR), low understanding and less number of accounting education employees; Data of Local Government Financial Statements, not full disclosure, are not presented in full and valid; Regulation, has not regulated the use of information in financial statements; Report Users, low executive and legislative commitment and understanding about the use of financial report information for decision making. Prognosis (strategi): employee education and training, socialization to the executive and legislative, improvement of regional accounting information systems, and changes in regulations both central and regional which give role to accounting information in government financial reports. Motivational (impact): increasing efficiency and effectiveness, increasing transparency and accountability, measuring performance and internal control, comprehensive and prudent decision making, realizing the principle of prudence, for calculating service rates, minimizing budget politicization and minimizing opportunities for corruption.



[1] Abreu, A. A. 2015. Framing theory in communication research in Spain: Origin, development and current situation in Spain. Revista Latina de Communication Social, 70, 423-450.

[2] Adhikari, Pawan & Levi G. Nesbakk. 2016. Implementing public sector accrual in OECD member states: major issues and challenges. Journal Accounting Forum, Article in Press.

[3] Adhikari, Pawan & Frode Mellemvik. 2010. The adoption of IPSASs in South Asia: acomparative study of seven countries. Research in Accounting in Emerging Economies, 10, 169 – 199.

[4] Ahmad, Nurul N., Santer N.M., Saiyidah D.A., & Muhammad H.Z.P. 2015. Challenges of accrual accounting implementation in Malaysian accountant general’s department. International Journal of Business, Economic and Law, 8 (1), 113-117.

[5] Andriani, Yeny, Ralph K., & Juliana Ng. 2010. Decision usefulness of cash and accrual information: Public sector managers’ perceptions. Australian Accounting Review (AAR), 53(20), issue 2, 144-153.

[6] Aurora, Cristina & Mihaela C. 2009. Arguments for introducing accrual based accounting in the public sector. Munich Personal RePEc Archive (MPRA), 18134, UTC.

[7] Bay, Charlotta. 2011. Framing financial responsibility: Analysis of the limitation of accounting. Critical Perspectives on Accounting, 22(6), 593-607.

[8] Benford, R.D & Snow D.A. 2000. Framing processes and social movements: An overview and assessment. Annual Review of Sociology, 1(26), 611-639.

[9] Borah, Porismita. 2011. Conceptual issues in framing theory: A systematic examination of a decade’s literature, Journal of Communication, (60), 246-263.

[10] Carlin, Tyrone M. 2005. Debating the impact of accrual accounting and reporting in the public sector. Journal Financial Accountability & Management, 3(21), 309 – 336.

[11] Chong, Dennis & James N. D. 2007. A theory of framing and opinion formation in competitive elite environments, Journal of Communication, 57, 99–118.

[12] Cohen, Sandra & Sotirios K. 2017. Accounting information quality and decision-usefulness of governmental financial reporting: Moving from cash to modified cash. Meditary Accountancy Research, 25, 95-113.

[13] Cohen, Sandra, Nikolaos K., & George V. 2013. Reaping a benefits of two word: An axplanatory study of the cash and the accrual accounting information roles in local governments. Journal Applied Accounting Reseach, 14(2), 165-179.

[14] Connolly, Ciaran & Noel Hyndman. 2006. The actual implementation accrual accounting: Caveat from a case within the UK public sector. Accounting, Auditing & Accountability Journal (AAAJ), 19(2), 272-290.

[15] Creswell, Jhon W. 2014. Penelitian Kualitatif dan Desain Riset: Memilih Diantara Lima Pendekatan. Edisi 3, Pustaka Pelajar, Jakarta.

[16] Dandago, Kabiru I., & Isdawani B.H. 2013. Decision usefulness approach to financial reporting: A case for Malaysian Inland Revenue Board. Asian Economic and Financial Review, 3(6), 772-784.

[17] Deloitte. 2015. Accrual Accounting is for the Public Sector to A Perspective for Arab Central Governments. A Middle East Point of View.

[18] Ferry, Laurence, Zamzulaila Z., Zarina Z., & Richard S. 2017. Framing public governance in malaysia: Rhetorical appeals through accrual accounting. Journal Accounting Forum, Article in Press.

[19] Financial Accounting Standard Board (FASB). 1978. Statement of Financial Accounting Concepts No. 1: Objectives of Financial Reporting by Business Enterprises. Stamford, CT: FASB.

[20] Gamayuni, R.R. 2018. The effect of internal audit function effectiveness and implementation of accrual based government accounting standart on financial reporting quality. Review of Integrative Business and Economics Research. 7(1), 46-58.

[21] Gamayuni, R.R. 2018. The effect of internal auditor competence and objectivity, and management support on effectiveness of internal audit function and financial reporting quality implication at local government. International Journal Policy in Emerging Economies, 11 (3), 248-261.

[22] Goffman, Erfing. 1986, Frame Analysis: An Essay on the Organization of Experience. 2nd ed.,Northeastern University Press, Boston, MA.

[23] Harun, Harun, Karen Van P., & Ian R.C Eggleton. 2015. Indonesian public sector accounting reform: Dialogic aspirations a step too far?. Accounting, Auditing & Accountability Journal, 28(5), 706-738.

[24] Harun, Harun, Karen Van P., & Ian R.C Eggleton. 2012. Institutionalization of accrual accounting in the Indonesian public sector. Journal of Accounting & Organizational Change, 8(3), 257-285.

[25] Hyndman, Noel & Ciaran C. 2011. Accrual accounting in the public sector: A road not always taken. Management Accounting Research, 22, 36-45.

[26] https://www.qsrinternational.com/nvivo/who-uses-nvivo, [accessed Des 14 2017].

[27] International Accounting Standards Board (IASB). 2010. The Conceptual Framework for Financial Reporting. London, UK: IFRS Foundation..

[28] International Monetery Fund. 2016. Implementing Accrual Accounting in Public Sector. International Monetary Fund (IMF).

[29] International Public Sector Accounting Standards Board (IPSASB). 2014. The Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities, IFAC, New York.

[30] Jesus, M.A.J., & J.S.B. Eirado. 2012. Relevance of accounting information to public sector accountability: A study of Brazilian federal public universities. TÉKHNE-Review of Applied Management Studies, 10, 87 – 98.

[31] Kaplan, Sarah. 2008. Framing Contests: Strategy Making Under Uncertainty. University of Pennsylvania, Wharton School, Oganization Science.

[32] Kartalis, Nikos, Mathew T., & Kelum J. 2016. Accounting in new public management (NPM) and shifting organizational boundaries: Evidence from the Greek Show Caves. Accounting, Auditing & Accountability Journal (AAAJ), 29(2), 248-277.
[33] Kobayashi, M., Kiyoshi Y., & Keiko A. 2016. The usefulness of accrual information in non-mandatory environments: The case of Japanese local government. Australian Accounting Review (AAR),77(26), issue 2.

[34] Kober, Ralph, Janet Lee, & Juliana Ng. 2010. Mind your accrual: Perceived usefulness of financial information in the Australian public sector under different accounting systems. Financial Accountability & Management, 26(3).

[35] Kristiawati, Endang. 2015. Faktor-faktor yang mempengaruhi keberhasilan penerapan akuntansi berbasis akrual pada pemerintah daerah kalimantan barat. Jurnal Akuntabilitas, 8(3), 171 – 190.

[36] Lagenkopa, Margarita. 2016. International public sector accounting standard implementation in the Russian federation. International Journal of Economic and Financial, 6(4), 1304-1309.

[37] Mahadi, Rozaidy, Raman N., Rasid M., & Kaziemah S. 2015. Accrual accounting in Malaysia: What we should learn from other. Malaysian Journal of Business and Economic, 1(3), 63 – 76.

[38] Maimunah, Mutiara. 2015. Implementation of accrual accounting: Review of readiness and arising problem. Social and Behavioral Sciences. 3nd Global Conference on Business and Social Science-2015 (GCBSS-2015) 16-17 Desember 2015, Kuala Lumpur, Malaysia.

[39] Mbelwa, Latifa. 2015. Faktor influencing the use of accounting information in Tanzanian local government authorities (LGAs): An institutional theory approach. Journal The Public Sector Accounting, Accountability, Auditing in Emerging Economies, 15, 143 – 177.

[40] Mcleod, Ross & Harun H. 2014. Public sector accounting reform at local government level in Indonesia. Journal Finance Accountability & Management, 30(2), 238 – 258.

[41] Nesbakk, Levi G. 2011. Accrual accounting representations in the public sector–A case of autopoises. Jurnal Critical Perspectives on Accounting, 22, 247 - 258.

[42] Nogueira, Sonia P.S., & Susana M.F. Jorge. 2017. The usefulness of financial information for decision-making in Portuguese municipalities: the importance of internal control. Journal of Applied Accounting Research, 18(1).

[43] Nogueira, Sonia P.S., & Susana M.F. Jorge. 2015. Explanatory factors for the use of the financial reporting decision-making: Evidence from local government in Portugal. Spanish Accounting Review, 19(2), 216-226.

[44] Nogueira, Sonia P.S., Susana M.F. Jorge & Mercedes C.O. 2013. The usefulness of financial reporting for internal decision-making in Portuguese municipalities. Management Research: The Journal of the Iberoamerican Academy of Management, 11(2), 178-212.

[45] Ofoegbu & Grace N. 2014. New public management and accrual accounting basis for transparency and accountability in the Nigerian public sector. Journal of Business and Management, 16(7), 104-103.

[46] Permendagri No. 64. 2013. Penerapan Standar Akuntansi Pemerintahan Berbasis Akrual pada Pemerintah Daerah. Kemendagri, Jakarta.

[47] PP No. 71. 2010. Standar Akuntansi Pemerintahan. Salemba Empat, Jakarta.

[48] Romney, Marshall B., & P.J Steinbart. 2011. Accounting Information System. Edisi 9, Salemba Empat, Jakarta.

[49] Roussy, Melanie & Marion Brivot. 2016. Internal audit quality: A polysemous notion?. Accounting, Auditing & Accountability Journal (AAAJ), 29(5), 714-738.

[50] Scott, William R. 2005. Financial Accounting Theory, Third Edition, New Jersey: Prentice-Hall, Inc.

[51] Shagari, Shamsudeen L., & Kabiru Isa D. 2013. Decision usefulness approach to financial reporting: A case for the general public. Asian Academic Accounting Association (4As) Annual International Conference, Holding at Penang, Malaysia, October 27-30.

[52] Sugiyono, 2017. Metodologi Penelitian Kualitatif, untuk penelitian yang bersifat: eksploratif, enterpretif, interaktif dan konstruktif. Alfabeta, Bandung.

[53] Susanto, Azhar, (2017). Sistem Informasi Manajemen: Konsep dan Pengembangan Secara Terpadu. Lingga Jaya, 2017, Bandung.

[54] Susanto, Dwi & Djuminah. 2015. The usefulness of local goverment financial statement for regional development planning process (an empirical study against the head of the district development planning agencies in Java and Madura). Procedia-Social and Behavioral Sciences. GCBSS-2015, 17-18 September, Bali, Indonesia.

[55] Tollerson, Cynthia D. 2012. The Data Decision-Usefulness Theory: An Exploration of Post-1998 Reported Products and Service Segment Data Decision Usefulness. Desertation, The Faculty of the C.T. Bauer College of Business, Universitas of Houston.

[56] Undang-undang No: 17. 2003. Keuangan Negara. Lembaran Negara Tahun 2003 Nomor 47, Tambahan Lembaran Negara Nomor 4287, Jakarta.

[57] Undang-undang No: 1. 2004. Perbendaharaan Negara. Lembaran Negara Tahun 2004 Nomor 5 Tambahan Lembaran Negara Nomor 4355, Jakarta.

[58] Vogel, Rick. 2011. Framing and framing-counter new public management: The case of Germany. Public Administration. Blackwell Publishing Ltd, 9600 Garsington Road, Oxford OX4 2 DQ, UK.

[59] Williams, Paul F., & Sue P. Ravenscroft. 2014. Rethinking decision usefulness. Contemporary Accounting Research. 1–26.
[60] Yuliansyah, Hanna M.K & Ani W.S. 2012. Manajemen dan Analisis Data Kualitatif dengan Perangkat Lunak NVivo. Salemba Empat, Jakarta.