Professionalism, Competency and Financial Reporting Quality: A Perception of Director of Finance in a Changing Public Sector Reporting Standard

Maruf Mustapha, Ku Nor Izah Ku Ismail, Halimah Nasibah Ahmad

Abstract


ABSTRACT

The Financial Reporting Quality (FRQ) refers to better information dissemination across different users. It remains a prevalent factor for organizations’ performance and survival. The public sector in many countries, have witnessed considerable changes in the past decades. The prominent one being the International Public Sector Accounting Standards (IPSAS) for the public sector entities. Drawing on contingency and institutional theories, this study examine the perception of directors of finance regarding the effects of professionalism on the relationship between staff competency and FRQ under a new accounting standard. Using survey research approach and self-administered questionnaire, data were gathered from 118 directors of finance representing local governments of four States in the north-west geographical zone of Nigeria. The Partial Least Squares Structural Equation Modeling (PLS-SEM) revealed a significant positive relation between staff competence and FRQ. Conversely, no significant effect was found in the interaction of professionalism on the model. The study implication was discussed in the context of Nigeria.

Keywords: Financial reporting quality: competence: professionalism: theory

ABSTRAK

Kualiti pelaporan kewangan (KPK) merujuk kepada penyebaran maklumat yang lebih baik merentasi pengguna yang berbeza. Oleh itu, KPK menjadi faktor yang penting untuk prestasi dan kelangsungan kewujudan sesebuah organisasi. Sektor awam di kebanyakan negara telah menyaksikan perubahan ketara dalam beberapa dekad yang lalu. Antara yang penting adalah Piawaian Perakaunan Sektor Awam Antarabangsa (IPSAS) untuk entiti-entiti sektor awam. Berdasarkan kepada teori kontinjensi dan teori institusional, kajian ini menguji kesan profesionalisme ke atas hubungan antara kecekapan staf dan KPK di bawah piawaian perakaunan baru. Dengan menggunakan pendekatan penyelidikan tinjauan dan soal selidik, data telah dikumpulkan daripada 118 pengarah kewangan di kerajaan-kerajaan tempatan dari empat buah negeri yang terletak di zon geopolitik utara-barat Nigeria. Keputusan daripada analisis yang menggunakan “Partial Least Squares Structural Equation Modelling” (PLS-SEM) menunjukkan hubungan positif yang signifikan antara kecekapan staf dan KPK. Sebaliknya, tiada kesan yang signifikan ditemui dalam interaksi profesionalisme terhadap model kajian. Implikasi kajian dibincangkan dalam konteks Nigeria.

Kata kunci: Pelaporan kewangan: kualiti: kecekapan; profesionalisme; teori


Keywords


Financial reporting, quality, competence, professionalism, theory

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