The Influence of Audit Opinion on The Financial Independence of Regional Government of West Java (Indonesian Case)

Abstract

Indonesian Central Government has a policy that gives freedom to local government to regulate and manage their own funds (regional autonomy). And to maintain the consistency of local government’s report, the Central Government requires that the reports should be audited by Indonesian Financial Audit Organization (IFAO). Furthermore, this research aim to analyze the influence of audit opinion from IFAO on Financial Independence of Local government in West Java. The method used in this research is Hypothetical-deductive, which is a method that is carried out in stages, logically, organized, and meticulously to find a solution to a problem. The population of this study is the local government in West Java, which consists of 28 local government. The data analysis used are the classical assumptions and hypothesis testing. The result of the study shows that the audit opinion has an influence on Financial independence of West Java local government although is not statistically significant.