International Journal of Economic Research and Financial Accounting (IJERFA)

Professional Ethics Violation Analysis Report Financial Report Manipulation Case

Arman Jaya Ndruru — 2026-04-14

Professional ethics in accounting plays a fundamental role in maintaining the quality of financial information and public trust in the accounting profession. However, in practice, business pressure, performance demands, and weaknesses in internal control systems often trigger ethical violations, particularly in the form of financial statement manipulation. This study aims to analyze in depth violations of accounting professional ethics through a hypothetical case study entitled “The Phantom Expense” at PT Prima Karya, which involves the recording of fictitious expenses prior to an Initial Public Offering (IPO). This research employs a qualitative descriptive approach using a case study method. The analysis focuses on examining the chronology of the case, identifying the parties involved, and assessing the economic, social, and legal impacts arising from the ethical violation. Furthermore, the case is evaluated based on the principles of accounting professional ethics, the Indonesian Code of Ethics for Accountants, and three major normative ethical theories: utilitarianism, deontology, and virtue ethics. The findings indicate that the manipulation of financial statements constitutes a clear violation of the principles of integrity, objectivity, and professional behavior, as well as non-compliance with applicable accounting standards and capital market regulations. From a utilitarian perspective, the practice is unethical because the overall harm suffered by investors and the public outweighs the short-term benefits gained by the company. From a deontological perspective, the action represents a breach of the accountant’s moral duty to uphold honesty and compliance with professional standards. Meanwhile, virtue ethics highlights the failure of the perpetrators to demonstrate professional character traits such as integrity, responsibility, and moral courage. This study recommends strengthening ethical culture, internal control systems, and whistleblower protection mechanisms as strategic measures to prevent similar ethical violations in the future.

Analysis Of Information Disclosure Practices In The Cheap Market Program (East Red Market) In Medan City

Minarta Juani Aulia Sianturi — 2026-04-09

The Low-Cost Market Program is a local government policy aimed at maintaining the stability of basic necessities prices and increasing the purchasing power of low-income communities. The success of this program is determined not only by the availability and price of goods, but also by the transparency and effectiveness of information delivery to the target community. This study aims to analyze the practices of information disclosure and dissemination in the implementation of the Low-Cost Market Program in Pasar Merah Timur Village, Medan City. This study used a descriptive-qualitative approach. Data were collected through in-depth interviews with village officials and the community, non-participant observation, and analysis of official documents related to program implementation. Data were analyzed thematically to identify patterns of information delivery and obstacles encountered. The results showed that village officials disseminated information through various channels, such as bulletin boards, social media, banners, and communication through neighborhood heads. However, information dissemination was not uniform and still relied on informal communication networks, resulting in differences in community perceptions regarding the clarity and accessibility of information. The main obstacles identified included limited communication facilities, delays in distribution of goods, and the lack of an easily accessible formal complaint mechanism. This study concludes that information transparency in the Low-Cost Market Program has been implemented, but is not yet optimal, so it is necessary to strengthen official information channels and increase public participation to support more accountable public services

Analysis of the Implementation of the Profit-Sharing System in Mudharabah Financing at KSPPS Bakti Huria Syariah Makassar

Mus Fachry Gilang — 2026-04-09

This study aims to analyze the implementation of the profit-sharing system in mudharabah financing at KSPPS Bakti Huria Syariah Makassar. The research employs a descriptive qualitative approach with data collected through interviews, observations, and documentation. The findings indicate that the determination of the profit-sharing ratio (nisbah) is established through mutual agreement between the cooperative, acting as the shahibul maal, and the customer, acting as the mudharib, at the time of contract execution. The constraints encountered include incomplete submission of required application documents and delays by customers in repaying financing that has reached maturity. In addition, the study recommends adopting the revenue-sharing method, as this mechanism is considered to provide more balanced benefits for both the cooperative and the customers. Overall, the implementation of the profit-sharing system has been functioning appropriately, although improvements are still needed in administrative procedures and repayment discipline. In conclusion, the application of the mudharabah profit-sharing system at KSPPS Bakti Huria Syariah Makassar is fundamentally in accordance with sharia principles, although enhanced supervision is required to optimize its effectiveness.

The Influence of the Audit Opinion of the Financial Audit Agency on the Financial Performance of Local Governments (Case Study of District and City Governments in North Sumatra Province 2021-2023)

Aisyah Winanda Harahap — 2026-04-14

This study aims to examine the effect of audit opinions issued by the Supreme Audit Institution of Indonesia (BPK) on the financial performance of regency and municipal governments in North Sumatra Province. The research adopts a quantitative approach using secondary data obtained from BPK audit reports and the realization of Regional Revenue and Expenditure Budgets (APBD) for the period 2021–2023. The sample consists of 33 regency and city governments in North Sumatra Province, selected through purposive sampling, resulting in 99 observations. Data were analyzed using simple linear regression, preceded by classical assumption tests. The results indicate that BPK audit opinions do not have a significant effect on the financial performance of local governments. This study is expected to contribute to the development of public sector accounting literature and serve as an evaluative reference for local governments in improving the quality of regional financial management

The Effect Of Audit Opinions And Capital Expenditure On The Performance Of The Central Java Provincial Government In 2022_ 2024

Ananda Vadhila — 2026-04-14

Local government performance is a key indicator in evaluating the effectiveness of public administration and the achievement of sustainable development goals. Previous studies examining the relationship between audit opinions and government performance have produced inconsistent and often insignificant findings, whereas capital expenditure is widely regarded as a potential driver of performance that still requires further empirical investigation, particularly at the provincial level during the post-pandemic recovery period. In this research, a quantitative methodology was used, with secondary data derived from Local Government Financial Reports and records of capital expenditure realization. The analysis procedure consisted of classical assumption tests—such as tests for normality and autocorrelation—alongside t-tests to examine the influence of independent variables on the dependent variable. The study’s results indicate that audit opinions do not significantly impact local government performance. government performance, while capital expenditure has a significant impact

The Effect of BPK Audit Findings on Local Government Financial Performance: An Empirical Study of Regencies/Cities in Bali Province

Astrid Fazria — 2026-04-09

This study aims to empirically examine the impact of audit findings issued by the Supreme Audit Agency of Indonesia (BPK) on the financial performance of district and city governments in Bali Province. The research adopts a quantitative approach using a causal-associative method to analyze the relationship between audit findings and financial performance. The study utilizes secondary data obtained from BPK Audit Reports (LHP) and Local Government Financial Statements (LKPD) published by the Directorate General of Fiscal Balance (DJPK) of the Ministry of Finance. The research objects consist of nine regencies and cities in Bali Province observed over a four-year period from 2018 to 2021, resulting in a total of 36 observations selected through purposive sampling. Data analysis was conducted using multiple linear regression with IBM SPSS software, preceded by descriptive statistical analysis and classical assumption tests to ensure data reliability and validity. The findings indicate that BPK audit findings do not have a statistically significant effect on local government financial performance. This suggests that the presence of audit findings alone is insufficient to directly improve financial performance. Instead, audit effectiveness largely depends on the quality of follow-up actions on audit recommendations and the overall capacity of local government financial management. This study is expected to contribute empirical evidence to the public sector accounting literature, particularly regarding the role of external audits in improving local government financial performance.

Strengthening Public Sector Audit Through Risk-Based Internal Control: A Conceptual Framework for Local Governments

Dito Aditia Darma Nasution — 2026-04-14

This conceptual paper proposes an integrated framework for enhancing governance in local governments by combining public sector auditing, risk-based internal control, and accountability mechanisms. Drawing on Agency Theory, COSO Enterprise Risk Management, and Public Accountability principles, the framework addresses a critical gap in the literature: previous studies have examined these components separately, without demonstrating their synergistic impact on governance outcomes. The framework positions auditing as the initial monitoring mechanism, risk-based internal control as a tool for proactive mitigation, and accountability mechanisms as enablers of ethical and transparent implementation. The resulting governance outcomes include improved efficiency, strategic decision-making, and enhanced public trust, creating a continuous feedback loop that fosters adaptive, resilient, and evidence-based administration. This model provides both a theoretical contribution and a practical guide for local government practitioners and sets the foundation for future empirical testing.

The Effect of Local Revenue, Audit Opinions, and Capital Expenditures on Local Government Financial Performance South Sulawesi province Selatan 2022-2024

Hapipah Zahra Sirait — 2026-04-14

This study aims to determine and analyze the effect of local revenue, capital expenditure, and audit opinions on regional financial performance in districts/cities in South Sulawesi province. This study uses a quantitative method with a total sampling technique. The data processed is secondary data taken from the official website of the Directorate General of Fiscal Balance (DJPK) and the South Sulawesi Provincial Audit Agency for districts/cities in South Sulawesi Province for 2022-2024, with data testing conducted using multiple linear regression, using IBM SPSS version 26. The results showed that simultaneously, local revenue, capital expenditure, and audit opinion significantly affected financial performance with a coefficient of determination of 85.7%. However, local revenue partially had a positive and significant effect on local government financial performance, indicating that an increase in local resources strengthened fiscal independence. Capital expenditure had a negative and significant effect on local government financial performance, suggesting challenges in optimizing budget absorption for productive assets. and audit opinions have a positive but insignificant effect on the performance of regency and city governments in South Sulawesi province in 2022-2024, indicating that administrative achievements are not yet fully in line with improvements in regional fiscal reality.

The Effect of BPK Audit Opinions on the Financial Performance of Local Goverments in Central Java Province (2022-2024)

Devi Liana — 2026-04-14

This research investigates the relationship between audit opinions issued by the Supreme Audit Agency of Indonesia (BPK) and the financial performance of local governments in Central Java Province over the 2022–2024 period. Audit opinions function as an independent evaluation of the credibility and compliance of local government financial reports and are often associated with public sector accountability. This study adopts a quantitative approach using a causal-associative research design. Secondary data were collected from BPK audit reports (LHP) and audited local government financial statements (LKPD). The sample comprises regency and city governments in Central Java Province selected through purposive sampling based on data availability. The analysis was conducted using descriptive statistical techniques and classical assumption testing, followed by simple linear regression analysis. The results of this study are expected to clarify whether audit opinions play a meaningful role in explaining variations in local government financial performance and to contribute to empirical discussions on audit outcomes and public financial management within the public sector.

Influence of Audit Opinion of Audit Board Financial Impact on Regional Government Financial Performance (Case Study on Regency and City Governments in West Sumatra Province 2022 - 2024)

Mika Mutiara Br Kesogihin — 2026-01-21

This study aims to evaluate the influence of the audit opinion from the Supreme Audit Agency (BPK) on the financial performance of 18 district/city governments in West Sumatra Province for the 2021–2024 period. The researchers used secondary data sourced from the official websites of the BPK and the Statistics Indonesia (BPS) of West Sumatra Province using a simple linear regression analysis method. The results indicate that the level of fiscal independence in the region is still relatively low, with the majority of Decentralization Ratios below 0.20. Statistical testing found that the audit opinion had a negative and significant effect on regional financial performance, as indicated by a regression coefficient value of -0.054 and a significance value of 0.007 <0.05. This indicates that each increase in the audit opinion variable is followed by a decrease in financial performance. Theoretically, this phenomenon is related to the current stricter correction and control mechanisms in response to previous period performance to maintain organizational stability.