The role of transparency and professional assistance in regional financial management in the Indonesian regional governments

This study aims to analyze the extent of the role of transparency and professional assistance, particularly by the Financial and Development Supervisory Agency (BPKP) in the management of regional finances toward the implementation of follow-up audit recommendations. Using data from provincial, city, and district governments in Indonesia in 2014-2016 in Indonesia, with a final sample of 1494 observations. The results of the study indicate that the level of transparency can play a role in increasing the level of suitability of the implementation of follow-up audit recommendations that have been given by external auditors (the Supreme Audit Board/BPK) to the Regional Governments in Indonesia. However, although at the Provincial Government level, a positive influence was found on the existence of BPKP's assistance on the follow-up of audit recommendations, this did not apply at the district and city level, because it was found that districts and cities that received BPKP assistance had lower audit recommendations compared to districts and cities that do not get BPKP assistance. The results of this study have implications for the strategies and policies (discretion) of Local Government officials in order to improve the suitability of the implementation of follow-up audit recommendations. Therefore, the Central Government needs to encourage and facilitate increased transparency and implementation of follow-up audit recommendations to the Regional Government, to optimize the achievement of governance reform goals in Indonesia, especially in order to realize accountability in regional financial management.