JURNAL
Riset Akuntansi dan Keuangan Indonesia URL : http://journals.
id/index.
php/reaksi/index The Impact of Public Leadership on Accountability in Local Government: Evidence from Indonesia Titik Setyaningsih1.
Indra Bastian2.
Choirunnisa Arifa3.
Fuad Rakhman4 Universitas Sebelas Maret.
Indonesia
2,3,4
Universitas Gadjah Mada.
Indonesia *email: titiksetya@staff.
Keywords:
accounting capacity, financial reporting quality, public leadership, accountability, local government.
ABSTRACT
This study examines the influence of public leadership on local government accountability.
The study employed a survey methodology, involving local government employees in seven local governments in Central Java.
The data analysis was conducted using Partial Least Squares.
The research results indicate that rule-following leadership has a significant positive effect on accountability and financial reporting Accountability leadership plays an important role in increasing financial reporting quality.
An increase in financial reporting quality can increase accountability in an A 2025 The Author.
This work licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 0 International License.
p-ISSN:1411-6510 e-ISSN :2541-6111 JURNAL Riset Akuntansi dan Keuangan Indonesia
INTRODUCTION
The coronavirus (COVID-.
was declared a global pandemic on March 9, 2020.
From that time until December 31, 2021, the virus had spread to 205 countries and caused 5,453,004 deaths.
In Indonesia, 4,262,720 people were confirmed to have tested positive for the virus, and 144,094 people died .
ttps://w.
coronavirus/).
By August 2022, the total number of deaths in Indonesia had reached 157,500.
The three provinces with the highest number of deaths were Central Java.
East Java, and West Java.
As a result of the coronavirus, global financial conditions in April 2021 were still marked by uncertainty surrounding the recovery.
Financial vulnerability continued to rise in a number of sectors, in part covered up by a massive stimulus.
Policymakers were faced with the challenge of tradeoffs: maintaining short-term support for the global economy while preventing unwanted consequences and medium-term risk to financial stability.
A long period of extreme financial conditions could trigger financial vulnerability.
If allowed to continue, this vulnerability would potentially develop into a problem of structural legacy, placing mediumterm growth at risk and testing the resilience of the global financial system (International Monetary Fund, 2.
Indonesia encountered a number of difficulties in dealing with the pandemic due to the economic situation, inadequate facilities and resources, and the lack of strong human resources to tackle the problems faced.
Other factors, such as population density, social homogeneity, past experiences and knowledge of managing contagious diseases, and local leadership regimes also made conditions worse (Ling et al.
, 2.
Accounting played a role in supporting the governmentAos response to handling the pandemic at a time when public entities were required to take exceptional decisions at crisis level, specifically in the situation of the pandemic.
However, public sector accounting was not yet able to explore and identify the uncertainties taking place (Leoni et , 2.
Accounting theory has shifted from new public management to the concept of publicness.
For this reason, there is a growing need for research that emphasizes on public values.
this way, accounting can provide accountability Vol.
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3 Desember 2025 and transparency in public financial reporting, including budget accountability to mitigate the impact of the pandemic (Steccolini, 2.
In Indonesia, issues of budget transparency particularly because corruption continues to be the major obstacle to achieving public accountability (Fossati, 2017.
Setyaningrum, 2018.
Rakhman & Wijayana, 2019.
Rakhman, 2.
When the coronavirus pandemic occurred, the way the pandemic was handled in Indonesia appeared to be encompassed by a black box of decision making (Ayuningtyas et al.
, 2.
According to Hartanto and Siregar .
, public satisfaction was reflected in the governmentAos response to minimize the impact of the coronavirus pandemic, and therefore, increasing public trust required greater government accountability, transparency, and responsiveness.
One effort that could be made to prevent vulnerability to the impact of the pandemic was to protect financial resilience by overseeing the national, regional, and local budget through highquality financial reporting.
Research on financial reporting quality, especially in the public sector, still leaves room for further study.
Several studies have already been carried out (Brown, 2019.
Ademola et al.
, 2020.
Ball 2020.
Tran.
Nguyen, and Hoang 2021.
Bastida et al.
, 2.
Research focusing specifically on the context of Indonesia has also been conducted (Adiputra et al.
, 2018.
Effendi et al, 2018.
Rakhman and Wijayana, 2019.
Jatmiko et al.
, 2020.
Ramandei et al.
, 2020.
Furqan et al.
, 2021.
Ratmono and Darsono, 2.
However, studies within the Indonesian context have not yet completely explained the influence of public leadership on financial reporting quality during the coronavirus pandemic.
Meanwhile, in practical terms.
Minister of Finance Decree Number 157 of 2020 had to be implemented in local government financial reporting.
There is an increasing need for public accountability during a global pandemic.
One important thing to note is the necessity to change the accounting paradigms to capture the pandemic In 1980, the concept of accounting shifted from traditional accounting to New Public Management (NPM), emphasizing marketoriented values and a focus on value for money .
conomic, efficient, and effectiv.
, including a shift from cash basis to accrual basis.
Nevertheless.
NPM Setyaningsih et al.
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3 Desember 2025 JURNAL Riset Akuntansi dan Keuangan Indonesia has not always been successfully implemented in all The debate intensified when NPM was found to be unsuitable for managing crises, such as the global financial crisis shock of 2008-2012.
This sparked awareness of the need for a postNPM concept, namely a concept of publicness, which emphasizes public values, joint production, hybridity and multiplicity of logic, frugality, crisis and cybercrime, performance measurement, control, and governance, including public leadership (Steccolini, 2.
This study examines the influence of public leadership on local government accountability.
This research offers both theoretical and practical Its theoretical contribution is to expand previous research by highlighting the fact that public leadership is linked to the financial reporting quality of local governments in Indonesia.
The study triggers and enriches the use of the concept of publicness in the field of public sector accounting research in Indonesia.
Indonesia is the worldAos fourth most populous country and the tenth largest economy in terms of purchasing power parity.
In addition.
Indonesia has made significant progress in poverty reduction, cutting the poverty rate by more than half since 1999 and falling below 10% before the COVID-19 pandemic outbreak in 2019.
Indonesia successfully assumed the G20 presidency in 2022 and was set to serve as the rotating chair of ASEAN in 2023.
This move demonstrates IndonesiaAos leadership in representing the interests of developing countries and its growing capacity to play a more active strategic role in working with developed countries to achieve sustainable post-pandemic recovery and resilience in the face of global uncertainty .
org/en/country/ econd ia/overvie.
One of IndonesiaAos most important policies is regional autonomy, which is the manifestation of the concept of decentralization.
Regional autonomy gives local governments the authority to regulate and manage the various interests of their communities independently, based on the communityAos According to Minister of Home Affairs Decree Number 77 of 2020, local governments are responsible for the financial management of the local areas, including the preparation of financial These reports are then audited by Audit Board of the Republic of Indonesia.
The Impact of Public.
p-ISSN:1411-6510 e-ISSN :2541-6111 According to the Local Government Act Number 32 of 2003, local government financial reports must be prepared following the Government Accounting Standards.
These standards are developed by the Governmental Accounting Standards Board, which consists of government officials, professionals, and accounting academics.
The standards were issued under Presidential Decree Number 71 of 2010.
The committee regularly reviews and improves the accounting standards, including the transition to accrual accounting.
Government agencies were required to adopt these standards by the 2015 fiscal year (Rakhman & Wijayana, 2.
Problems arise when the concepts for handling a pandemic, which emphasize the importance of balancing dynamics among stakeholders, fail to match public expectations.
Citizens must have an accurate, real-time, and transparent understanding of information regarding the accountability of public resources during the pandemic.
Between 2016 to 2019, local government financial reports in Indonesia experienced a significant improvement in reporting quality.
Based on these issues, the formulation of the problem for this research was the decline in financial reporting quality of local governments, which caused a stagnancy trend in The goal of this study is to examine the factors that caused leaders to direct the use of financial reports for decision-making during the pandemic, as well as the factors that enabled local government employees to follow their leadersAo instructions to use financial reports for the same purpose.
LITERATURE REVIEW AND HYPOTHESIS
DEVELOPMENT
Contingency theories state that no single system can be used by an organization in various environments (Fisher, 1.
In general, the mission and program of every organization should serve as a guideline for designing its performance measurement system.
Based on this perspective, each organization cannot stand alone.
The environment, organizational attributes, and managerial decision-making style influence the structure and success of an organization in dealing with different situations (Gordon & Miller, 1.
According organizations tend to become homogeneous, even p-ISSN:1411-6510 e-ISSN :2541-6111 JURNAL Riset Akuntansi dan Keuangan Indonesia if they initially demonstrate a fairly high level of This process of homogenization is known as isomorphism.
Isomorphism includes two primary types: competitive isomorphism and institutional Competitive isomorphism is related to efficiency, including technical or economic interpretation, while institutional isomorphism is developed through three mechanisms, comprising coercion, imitation, and regulation.
In the concept of competitive isomorphism, there is a cheaper, better, or more efficient way to do something.
competitiveness encourages organizations to adopt new methods.
Hence, organizations do not compete for resources or customers but for power and legitimacy, as well as social welfare and economic outcomes (DiMaggio & Powell, 1.
Accountability consists of both internal and external accountability within an organization (Ahyaruddin dan Akbar, 2018.
Akbar et al.
Ling et al .
expanded OstromAos .
model to evaluate institutional impact during the coronavirus pandemic.
The Institutional Analysis and Development model was revised into the Social-Ecological Systems (SES) model, which presents variables that interact and have an impact on outcomes, although the metric used is nonfinancial.
Tran.
Nguyen, and Hoang .
developed the understanding of institutional impact from a financial perspective by explaining that stakeholders exert coercive pressure on public entities to produce high-quality financial reports.
Public resources are accounted for within the public budget.
Leaders play a role in overseeing accountability, complying with applicable regulations, and motivating organizations to meet public expectations through effective leadership.
Vulnerability represents the level of exposure to shocks (Barbera et al.
, 2.
Thus, public financial vulnerability deserves attention, especially as it is the main dimension that leads to public financial resilience (Anessi-Pessina et al.
, 2.
Financial resilience can be achieved through adaptive The mobility of goods and services during the pandemic experienced a drastic change, which required special leadership and governance that were inherently different from those of normal Political economy of leadership plays a vital role in adaptive governance because it has the perception of the capacity to deal with crisis Vol.
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3 Desember 2025 by considering the availability of information and its interpretation.
High-quality financial reporting of local governments can help decision-making during the pandemic, especially in terms of public budget accountability.
High-quality accrual-based reporting is essential for government decisionmaking.
Greater emphasis was placed on this high quality during the pandemic (Ball, 2020.
Bastida et , 2.
This was in contrast with the approach taken by the Italian government, which used a cash basis and modified it for financial reporting during the pandemic (Padovani & Iacuzzi, 2.
In the case of the European Union, the pandemic had negative consequences for public financial reporting but encouraged the reform of public accounting (Cohen et al, 2.
The risk of financial vulnerability in public entities needs to be addressed to achieve financial resilience (Anessi-pessina et al.
The findings of other research in Sweden show that only a portion of local governments reported the events of the pandemic in their annual Political and institutional factors explained the choice of accounting disclosures (Donatella et , 2.
Meanwhile.
Tran.
Nguyen, and Hoang .
state that public institutions must give their attention to developing accounting and leadership In Indonesia, the government accounting system shifted after the issuance of Government Accounting Standards under Decree Number 24 of 2005, which replaced the single-entry system with a double-entry system on the basis of modified cash recording, marking a transition towards an accrual The full implementation of an accrual basis was only enforced after the issuance of Government Regulation Number 71 of 2010.
According to the International Public Sector Accounting Standards, the qualitative characteristics of public entity reporting are relevance, faithful representation, understandability, timeliness, comparability, and Financial quality and budgets are important in the internal control system to support the reliability of public reporting (Nogueira and Jorge, 2.
In Indonesia, the four characteristics that are required to ensure that government financial reporting meets the desired quality .
elevance, reliability, comparability, and understandabilit.
is expected that local governments, as the internal presenters and users, recognize the principles.
Accountability reports for the implementation of Setyaningsih et al.
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3 Desember 2025 JURNAL Riset Akuntansi dan Keuangan Indonesia national and regional budgets are compiled and submitted in accordance with the Government Accounting Standards.
Three key factors enable government reporting to run effectively as a public sector accountability First, reports are presented simply without reducing the comprehensiveness and accuracy of Second, reports must be based on the generally applied accounting standards.
Third, members of the community must demonstrate interest by reading, understanding, and posing critical questions that require government response, at a minimum, through their representatives in the House of Representatives or the Regional Representative Council must demonstrate interest by reading, understanding, and posing critical questions that require government response.
Members of the Regional Representative Council are expected to encourage local governments to produce high-quality financial reports that are easy to understand, transparent, and reflective of actual conditions (Harun & Kamase, 2.
Rakhman and Wijayana .
used the data from local government financial reports of 20082014 and found that local governments with more experienced regents or mayors had higher quality Further research shows that although an accrual basis system has already been implemented, the improvement in financial reporting quality of local governments in Indonesia remains suboptimal (Karunia et al, 2.
Other research uses non-financial information on the quality of public services as the basis for decision-making about political preferences (Furqan et al.
, 2.
Meanwhile, one of the findings presented by Hariani and Fakhrorazi .
shows that organizational commitment has a positive influence on financial reporting quality.
According to Effendi et al.
information that is generated through an accrual basis is not yet used by local governments for making decisions.
HYPOTHESIS DEVELOPMENT
TheThe analysis scheme discussed above was developed based on contingency theory and institutional theory.
Subsequently, the hypothesis development below was formulated by taking into consideration existing theories and research.
Based on contingency theory, organizations do The Impact of Public.
p-ISSN:1411-6510 e-ISSN :2541-6111 not operate in isolation (Gordon & Miller, 1.
The accountability of an organization depends on the organizational environment (Tran.
Nguyen, and Hoang 2.
Good accounting capacity can have a positive effect on the accountability of local governments (Harun and Kamase 2.
Therefore, the first hypothesis is formulated as follows.
H1: Accounting capacity has a positive effect on Based on the contingency theory, organizational attributes are one of the elements that influence an organizationAos ability to survive in a particular situation (Gordon & Miller, 1.
Accounting capacity refers to an accountantAos ability to support quality financial reporting.
Changes in the accounting profession are often driven by evolving regulations and standards.
Accountants need to develop their skills continuously in order to acquire new information.
Accounting capacity is a combination of knowledge, skills, and abilities needed, such as communication skills, interpersonal skills, general business knowledge, accounting knowledge, problem-solving skills, information technology skills, personal attitude and aptitude, and computer skills (Palmer et al.
, 2.
Previous research has found that accounting capacity has a positive effect on the financial reporting quality of public organizations (Tran.
Nguyen, and Hoang Therefore, the second hypothesis is proposed.
H2: Accounting capacity has a positive effect on financial reporting quality.
Based on institutional theory, coercive isomorphism occurs when an organization receives external pressure that forces it to comply with regulations to achieve economic goals (DiMaggio & Powell, 1.
Within this framework, accountability leadership means that leaders encourage their subordinates so that their actions can be explained to stakeholders (Tummers & Knies, 2.
The findings of previous research (Tran.
Nguyen, and Hoang, 2.
disclose that accountability leadership positively influences financial reporting quality.
contrast, political loyalty leadership means that leaders encourage their employees to align their political interests, even though there may be cost consequences (Tummers & Knies, 2.
Therefore, the next hypotheses are projected.
H3a: Accountability leadership has a positive effect on accountability.
p-ISSN:1411-6510 e-ISSN :2541-6111 JURNAL Riset Akuntansi dan Keuangan Indonesia H3b: Accountability leadership has a positive effect on financial reporting quality.
H3c: Political loyalty leadership has a negative effect on accountability.
H3d: Political loyalty leadership has a negative effect on financial reporting quality.
Institutional isomorphism, as explained in institutional theory, is the effort of an organization to spread its influence over the area where the organization exists (DiMaggio & Powell, 1.
Rule-following leadership means that leaders offer motivation to their subordinates to ensure their actions are in line with government rules and regulations (Tummers & Knies, 2.
Leaders are expected to create conditions that encourage their followers to adhere to government rules and The government plays a central role in the accounting reform taking place in public organizations, and ensures the commitment to generating high-quality and accurate accounting information as a part of accountability implementation (Tran.
Nguyen, and Hoang 2.
Hence, the subsequent hypotheses are derived.
H4a: Rule-following leadership has a positive effect on accountability.
H4b: Rule-following leadership has a positive effect on financial reporting quality.
Network governance leadership, a type of leadership that encourages employees to build networks with relevant stakeholders actively, has a positive impact on financial reporting quality (Tummers & Knies, 2.
Local leaders with more experience are associated with higher financial reporting quality (Rakhman & Wijayana, 2.
Based on these insights, the following hypotheses are proposed.
H5a: Network governance leadership has a positive effect on accountability.
H5b: Network governance leadership has a positive effect on financial reporting quality.
Based on institutional theory, public entities face pressure .
oercive isomorphis.
to comply with regulations (DiMaggio & Powell, 1.
, such as the applicable accounting report standards.
The most relevant aspects of public sector reform in New South Wales (NSW) are increasing accountability.
Vol.
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3 Desember 2025 organizations, controlling assets, and highlighting productivity and economy (Christensen, 2.
Steccolini .
notes that local governments aim to improve financial reporting quality to increase accountability.
Meanwhile, the findings of Tran.
Nguyen, and Hoang .
indicate that financial reporting quality is considered important as a determinant of the effectiveness of the accountability of public organizations.
Therefore, the sixth hypothesis is formulated.
H6: Financial reporting quality has a positive effect on accountability.
RESEARCH METHODS
A survey or an independent survey is the primary method used for collecting data by asking questions to respondents (Hair Jr et al.
, 2.
The survey in this research used a questionnaire to communicate with the respondents.
The research population was local government officials in Indonesia responsible for preparing financial The sample was selected through purposive Primary data were collected through an online survey using Google Forms, as also employed by Tran.
Nguyen, and Hoang .
and manual distribution.
The quantitative data were obtained using the unit of analysis of local government officials in seven local governments in Central Java.
The data were gathered by distributing questionnaires to local government officials.
The survey was conducted from August to November Of the 565 questionnaires distributed, 339 were returned and deemed valid for analysis.
This study adopted scales from previous studies to measure key variables in the model.
The research model consisted of four main research concepts, with a total of 43 observed variables.
First, the accounting capacity scale was adapted based on the research by Palmer et al.
and Tran.
Nguyen, and Hoang .
with 11 observed Second, the leadership scale included 12 items and was adopted from Tummers and Knies .
As a notable feature of financial reporting during the pandemic, an additional specific question was included related to government regulations that the mayor ensures employees strictly follow the rules and procedures, as well as can provide information on incidents of compliance and non-compliance.
Setyaningsih et al.
Vol.
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3 Desember 2025 p-ISSN:1411-6510 e-ISSN :2541-6111 JURNAL Riset Akuntansi dan Keuangan Indonesia under the Republic of IndonesiaAos Minister of Finance Regulation Number 157 of 2020.
Third, the quality of financial reporting refers to the qualitative characteristics of the information contained in financial statements that render the information useful to users, as outlined in Decree Number 71 of 2010, with nine observed variables.
Finally, the accountability scale in the current research was adapted from Tran.
Nguyen, and Hoang .
with 11 observed variables.
The latent variables were measured using the five-point Likert scale, and the respondents were asked to assess the quality of government financial The constructs and items of accounting capacity (Palmer et al.
, 2.
, public leadership (Tummers & Knies, 2.
, and accountability used (Ahyaruddin & Akbar, 2018.
Tran.
Nguyen, and Hoang 2.
The implementation of Government Accounting Standards followed accrual-based and accounting information quality was adjusted with the Regulation of the Minister of Finance during the pandemic.
A validity test is usually conducted to show the extent to which a test instrument can measure what it is supposed to measure.
A test is valid if it accurately measures what it is intended to measure.
If a measuring instrument is not valid, it means the results deviate from the intended objective, which is regarded as measurement error or variance.
Reliability demonstrates the accuracy and precision of the measuring instrument.
instrument is considered reliable if it consistently produces accurate and consistent results.
Consistency implies that repeated measurements of the same subject yield similar results.
One commonly used technique to assess reliability is CronbachAos Alpha, which shows how well the items in a group correlate positively with each other.
CronbachAos Alpha value greater than 0.
70 indicates that a scale has acceptable internal consistency, while a value above 0.
80 is considered good.
value between 0.
60 and 0.
70 may still be acceptable.
In contrast, an alpha value below 0.
60 is categorized as poor.
A value between 0.
60 and 0.
70 is generally regarded as acceptable.
Values between 0.
70 and 80 indicate satisfactory reliability, while values 80 are considered good (Hair Jr et al.
The data obtained from the survey method in this research was analyzed with the Partial Least Squares (PLS) method.
RESULTS AND DISCUSSION
The majority of respondents came from a higher education background.
A total of 15.
of respondents had completed a MasterAos degree, indicating the presence of a group of respondents with higher academic qualifications.
In terms of their field of study, 30.
7% of the respondents studied accounting, while 69.
3% had a nonaccounting educational background.
This suggests that the research involved participants from diverse academic disciplines, although there was a notable focus on individuals with an accounting Regarding the work experience, the majority of the respondents had a fairly long work experience, which may have influenced their understanding and perspective on the issues Finally, in the context of experience in the accounting field, 45.
13% of the respondents had less than one year of experience, and 31.
had between one and five years of experience.
The number of respondents with five to 10 years of experience was 6.
49%, while the respondents with more than 10 years of experience reached 13.
Meanwhile, 3.
54% of respondents reported having no experience in the field of accounting.
These data specify that most respondents were relatively new to the field of accounting, which may have influenced their perceptions of the financial reporting quality of local governments.
The details are presented in Table 1 below.
Table 1.
Respondent Characteristics Number of Respondents Final Education Senior High School/Vocational High School The Impact of Public.
Diploma BachelorAos Degree MasterAos Degree p-ISSN:1411-6510 e-ISSN :2541-6111 Vol.
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3 Desember 2025 JURNAL Riset Akuntansi dan Keuangan Indonesia Table 1.
Number of Respondents Accounting Non-Accounting Educational Background Length of Time Working Less than 3 years 3-5 years 6-10 years More than 10 years None Less than 1 year 1-5 years Experience in the Field of Accounting 5-10 years More than 10 years Source: Processed secondary data Table 2 presents the results of the outer model using PLS to examine the reliability and validity of the constructs in this research, including accountability, accounting capacity, accountability leadership, and financial reporting quality variables.
Overall, the results of the outer model show that the constructs in this research have good reliability and convergent validity, indicating a strong representation of the variables measured.
Table 2.
Outer Model
Variable Accountability (ACC) Accounting Capacity (AC) Indicator Loadings ACC1
ACC2
ACC3
ACC4
ACC5
ACC6
ACC7
ACC8
ACC9
ACC10
ACC11
AC1
AC2
AC3
AC4
AC5
AC6
AC7
AC8
AC9
AC10
AC11
AVE
Setyaningsih et al.
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3 Desember 2025 p-ISSN:1411-6510 e-ISSN :2541-6111 JURNAL Riset Akuntansi dan Keuangan Indonesia Table 2.
Variable Indicator Loadings AL1
AL2
Accountability Leadership
AL3
(AL)
AL4
AL5
AL6
FRQ1
FRQ2
FRQ3
FRQ4
FRQ5
FRQ6
FRQ7
FRQ8
FRQ9
RL1
RL2
Rule-following Leadership
RL3
(RL)
RL4
Financiale Reporting Quality (FRQ) AVE Source: Processed secondary data The evaluation of discriminant validity using the criteria of Fornell-Larcker shows adequate The criteria of Fornell-Larcker require the square root of the Average Variance Extracted (AVE) for each construct to be greater than its correlation with the other constructs (Table .
Table 3.
Fornell LarckerAos Discriminant Validity .
Accountability .
Accounting capacity .
Accountability .
Political loyalty .
Rule-following .
Network governance .
Financial reporting .
Source: Processed secondary data This analysis is important for ensuring that the constructs in the model are clearly differentiated and do not significantly overlap.
The results of the Fornell-Larcker analysis confirm that all the constructs in the model have adequate discriminant validity, with AVE square root values for each construct consistently greater than their correlation with the other constructs (Hair et al.
The Impact of Public.
by Hair.
Hult.
Ringle, and Sarstedt, provides a concise yet very practical guide to understanding and using PLS structural equation modeling (PLSSEM.
This demonstrates that every construct has characteristics that distinguish it from the other constructs in the model, which is important for ensuring the overall validity of the model in the research (Table .
p-ISSN:1411-6510 e-ISSN :2541-6111 JURNAL Riset Akuntansi dan Keuangan Indonesia Since the data were collected from a single source, common method bias had to be considered as it might affect the validity of the findings (Podsakoff et al.
, 2.
The HarmanAos single-factor test was performed using SPSS 22 software to test for common method bias.
The results indicated Vol.
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3 Desember 2025 that the HarmanAos single-factor accounted for only 13% of the total variance extracted from the entire model, which was smaller than the threshold Therefore, common method bias was not a severe problem in this study (Podsakoff et al.
Table 4.
Results of Structural Model Direct Hypothesis Expected Sign Coefficient Beta t-stat Sig Decision Accounting capacity -> Accountability H1= ( ) Positive effect Accounting capacity -> Financial reporting H2= ( ) Positive effect Accountability leadership -> Accountability H3a= ( ) No effect Accountability leadership -> Financial reporting quality H3b= ( ) Positive effect Political loyalty leadership -> Accountability H3c= (-) .
Negative effect Political loyalty leadership -> Financial reporting quality H3d= (-) No effect Rule-following leadership -> Accountability H4a= ( ) Positive effect Rule-following leadership -> Financial reporting quality H4b = ( ) Positive effect Network governance leadership -> Accountability H5a= ( ) .
No effect Network governance leadership -> Financial reporting quality H5b= ( ) Positive effect Financial reporting quality -> Accountability H6= ( ) Positive effect Source: Processed secondary data The results of structural model analysis are illustrated in Table 4 and provide notable insight about the following dynamics.
Accounting capacity was found to have a significant positive effect on accountability .
-stat = 2.
, thus supporting H1.
This result reinforces the theory that high-quality accounting staff can improve accountability by increasing reporting quality.
This is in line with the findings of Tran.
Nguyen, and Hoang .
, that accounting capacity contributes to increasing the financial reporting quality of public organizations.
Accounting capacity has a significant positive effect on financial reporting quality .
-stat = 2.
which indicates that an increase in accounting capacity contributes to an improvement in financial reporting quality.
This finding supports H2.
This aligns with the idea that adequate accounting skills and knowledge are the key factors in producing high-quality financial reports (Raseed and Robinson 2005.
Tran.
Nguyen, and Hoang 2.
Accountability leadership does not show any significant effect on accountability .
stat = .
, but has a strong positive effect on financial reporting quality .
stat = 5.
This result support H3b, indicating that this variable plays an important role in increasing financial reporting quality.
This is in line with the findings of Tran.
Nguyen, and Hoang .
However, the result does not support H3a, which suggests that accountability leadership may not directly improve accountability.
The results of this study differ from the expectations of Tummers and Knies .
During the COVID-19 pandemic, local governments faced extraordinary public health problems in their respective regions, so they focused on preventing flu transmission in each local government, and they did not need to explain all their actions to stakeholders.
The results of this study show that political loyalty leadership has a negative effect on accountability .
stat = 1.
Political loyalty leadership does not have any significant effect on financial reporting quality .
stat = 0.
These results support H3c, but do not support H3d.
These findings reinforce the theory that when leadership is overly focused on political loyalty, it can decrease organizational accountability.
Setyaningsih et al.
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3 Desember 2025 JURNAL Riset Akuntansi dan Keuangan Indonesia Rule-following leadership has a positive effect on accountability .
stat = 2.
and financial reporting quality .
stat = 3.
These results support H4a and H4b.
These findings are consistent with institutional isomorphism (DiMaggio & Powell, 1.
and align with the results of previous research (Tran.
Nguyen, and Hoang 2.
These results designate that leadership, which focuses on compliance with rules and regulations, has a positive impact on these two aspects.
Network governance leadership does not show any significant effect on accountability .
stat = 0.
but it has a significant positive effect on financial reporting quality .
stat = 3.
The results do not support H5a but support H5b.
This indicates that although this type of leadership may not directly improve accountability, it plays an p-ISSN:1411-6510 e-ISSN :2541-6111 important role in increasing financial reporting The results also show financial reporting quality has a very significant positive effect on accountability .
stat = 10.
, which supports the theory that an increase in financial reporting quality can improve accountability in an organization.
The public sector faces coercive isomorphism, which pressures to be accountable for public financial reports (DiMaggio & Powell, 1.
The results of this research support the sixth hypothesis.
This is in line with the findings of prior studies (Tran.
Nguyen, and Hoang 2.
Steccolini 2.
The research results confirm that public entities must meet the quality of financial reports based on the government accounting standards, particularly to fulfill specific objectives of accountability.
Fig 1.
Results of Structural Model Figure 1 presents the results of the structural Overall, the outcomes of this research confirm the importance of accounting capacity and various forms of public leadership in increasing the quality of financial reporting and accountability in an organization, and demonstrate the complexity of the relationships among these factors.
The Impact of Public.
CONCLUSION
Accounting capacity contributes to increasing the quality of financial reporting, which means it has a positive effect on accountability.
There is a positive effect of rule-following leadership on both accountability and financial reporting Network governance leadership does not show any significant effect on accountability but p-ISSN:1411-6510 e-ISSN :2541-6111 JURNAL Riset Akuntansi dan Keuangan Indonesia does have a significant positive effect on financial reporting quality.
Political loyalty leadership has a negative effect on accountability but has no significant effect on financial reporting quality.
Accountability leadership may not directly improve accountability but this variable plays an important role in increasing financial reporting quality.
increase in financial reporting quality can improve accountability in an organization.
The practical implications of this research highlight that an increase in accounting capacity and rule following leadership are two important variables for increasing the financial reporting quality and accountability of local governments during the pandemic.
In times of crisis such as a pandemic, leaders should refrain from emphasizing political commitments or debt because this undermines the decision-making process.
This research has certain limitations.
primarily explains direct hypotheses, while Vol.
10 No.
3 Desember 2025 the indirect hypotheses are presented in the supplementary material.
Network governance leadership, rule-following leadership, accountability leadership, and accounting capacity have a significant positive influence on accountability through the quality of financial reports.
Meanwhile, political loyalty leadership does not have a significant influence on accountability through the quality of financial reports.
Another limitation lies in the geographical scope of the study, which is restricted to local governments in Central Java.
Future research is recommended to extend the analysis to local governments outside Central Java or beyond Java Island.
ACKNOWLEDGEMENT
This research was supported by the Universitas Sebelas Maret through the Research Grant Scheme .
/UN27.
22/PT.
03/2.
Setyaningsih et al.
Vol.
10 No.
3 Desember 2025
JURNAL Riset Akuntansi dan Keuangan Indonesia
p-ISSN:1411-6510 e-ISSN :2541-6111 REFERENCE