Accounting Practices Effectiveness and Good Governance: Mediating Effects of Accounting Information Quality in Municipal Office of Medan City, Indonesia

Abstract

Public sector in Indonesia, nowadays, should implement good governance concepts in accordance to perform a “clean government”. This condition is requested by the donor country that gave a grant or loan for Indonesian’s Government. In order to implement good governance, there are some concepts that have to be considered. The concepts are: accountability and transparency, that can be represent by the accounting information quality.This research aims to investigate about the effect of accounting practices effectiveness on the good governance with the accounting information quality as the intervening variable in municipal office of Medan City, Indonesia. We conduct a census method in this research. We also used a questionnaire in data collection. Data analysis for this research is path analysis. The result showed that: (1). Accounting practices effectiveness significantly affected the accounting information quality in municipal office of Medan City, (2). Accounting practices effectiveness significantly affected the good governance practices in municipal office of Medan City, (3). Accounting information quality significantly affected good governance practices in municipal office of Medan City., (4). Accounting information quality can be considered as the intervening variable between accounting practices effectiveness and good governance in municipal office of Medan City.

Keywords: Accounting practices effectiveness, accounting information quality, good governance, accounting information, accountability.