THE EFFECTIVENESS OF THE INTERNAL CONTROL SYSTEM ON THE QUALITY OF FINANCIAL STATEMENTS WITH THE IMPLEMENTATION OF INTERNAL AUDITS AS A MODERATION VARIABLE
Abstract. This study aims to determine the effect of the effectiveness of the internal control system on the quality of financial statements with the implementation of internal audit as a moderating variable. This research is motivated by a disclaimer opinion on the Financial Statements of the Ministry of Maritime Affairs and Fisheries in 2016 and 2017. This indicates that the implementation of internal audits at the Ministry of Maritime Affairs and Fisheries has not been optimal. This study uses the causality method with a sample of 74 people from 90 internal auditors who were selected based on stratified random sampling according to their level of position. The results of the study indicate that the implementation of internal audits and the quality of financial reports at KKP has been very good. This is in accordance with the hypothesis and previous research which shows that there is an influence of the implementation of internal audit on financial reporting quality. The benefit of this research is to contribute scientifically to public sector audit science and solve problems for governments throughout the ministry in improving the quality of financial reports. Through the implementation of internal audits and increasing the effectiveness of the internal control system.
The results of this study state that the effectiveness of the internal control system no affects on the quality of financial statements. If the implementation of internal audit as a moderating variable the results still have an effect on the quality of financial statements. Moderation in this study is quasi moderation, because the results of the initial research influence the results of moderation still have an effect.Keywords: Internal Control System, Internal Audit, Quality of financial statements
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