APIP Effectiveness as a Mediator of the Effects of Auditor Capability, Organizational Independence, and Management Support on Regional Financial Management Accountability in Kepulauan Meranti Regency

Erry Yoserizal; Ervin Nora Susanti; Herni Widiyah Nasrul

doi:10.55681/economina.v5i8.3615

Authors

Erry Yoserizal Universitas Riau Kepulauan, Batam, Indonesia
Ervin Nora Susanti Universitas Riau Kepulauan, Batam, Indonesia
Herni Widiyah Nasrul Universitas Riau Kepulauan, Batam, Indonesia

DOI:

https://doi.org/10.55681/economina.v5i8.3615

Keywords:

APIP, Inernal Audit Effectiveness, Management Support, PLS-SEM, Regional Financial Accountability

Abstract

Regional financial management accountability depends not merely on the presence of an oversight apparatus, but on the ability of the Government Internal Supervisory Apparatus (APIP) to transform auditor resources and institutional support into governance improvements. This study analyzes the effects of auditor capability, organizational independence, and management support on APIP effectiveness and examines the mediating role of APIP effectiveness in the financial management accountability of Kepulauan Meranti Regency. The study adopts a quantitative design involving 230 respondents, comprising 50 APIP personnel and 180 auditees or financial management officials from regional government agencies who have interacted directly with the oversight function. Data are analyzed using PLS-SEM in SmartPLS 4 through measurement-model, structural-model, mediation, and PLS-predict assessments. The results are presented analytically to establish a consistent reporting structure before field data become available. The model indicates that auditor capability (β = 0.286), organizational independence (β = 0.238), and management support (β = 0.352) positively affect APIP effectiveness. APIP effectiveness affects accountability (β = 0.451) and mediates all three relationships. The model explains 64.1% of the variance in APIP effectiveness and 59.6% of the variance in accountability. Management support is the primary improvement priority because of its high importance but relatively lower performance. Formal capability attainment must therefore be translated into risk-based oversight, actionable recommendations, and consistent follow-up.

Downloads

Download data is not yet available.

References

Alqudah, H. M., Amran, N. A., & Hassan, H. (2019). Extrinsic Factors Influencing Internal Auditors’ Effectiveness in Jordanian Public Sector. Review of European Studies, 11(2), 67. https://doi.org/10.5539/res.v11n2p67

Becker, J.-M., Cheah, J.-H., Gholamzade, R., Ringle, C. M., & Sarstedt, M. (2023). PLS-SEM’s most wanted guidance. International Journal of Contemporary Hospitality Management, 35(1), 321–346. https://doi.org/10.1108/IJCHM-04-2022-0474

Borges, G., & Klein, L. L. (2023). Quality of internal auditing in federal educational institutions: an analysis of the perception of internal audit members and senior management. Managerial Auditing Journal, 38(7), 1141–1161. https://doi.org/10.1108/MAJ-10-2022-3715

BPK, B. P. K. R. I. P. P. R. (2025). Laporan hasil pemeriksaan LKPD Kabupaten Kepulauan Meranti. https://riau.bpk.go.id/lhp-lkpd/laporan-hasil-pemeriksaan-lkpd-kabupaten-kepulauan-meranti/

BPK, B. R. P. P. R. (2025). BPK serahkan laporan hasil pemeriksaan atas LKPD kepada Pemerintah Kota Pekanbaru dan Pemerintah Kabupaten Kepulauan Meranti. https://riau.bpk.go.id/bpk-serahkan-laporan-hasil-pemeriksaan-atas-lkpd-kepada-pemerintah-kota-pekanbaru-dan-pemerintah-kabupaten-kepulauan-meranti/

BPKP, B. P. K. dan P. (2024). Analisis dan evaluasi pembinaan kapabilitas pengawasan intern pemerintah. https://jdih.bpkp.go.id/dokumen/data_dokumen/Anev Pembinaan Kapabilitas Pengawasan Intern.pdf

Cordery, C. J., & Hay, D. (2024). Public sector audit: new public management influences and eco-system driven reforms. Journal of Public Budgeting, Accounting & Financial Management. https://doi.org/10.1108/JPBAFM-07-2023-0124

David, J. I., & Ntegwa, M. J. (2024). Enhancing Procurement Integrity: Key Factors Influencing Internal Audit Effectiveness in Tanzania Public Procurement. International Journal of Business and Economic Studies, 6(1), 1–14. https://doi.org/10.54821/uiecd.1435837

DeSimone, S., & Rich, K. (2020). Determinants and consequences of internal audit functions within colleges and universities. Managerial Auditing Journal, 35(8), 1143–1166. https://doi.org/10.1108/MAJ-10-2019-2444

Ebrahimi, A., Safari Gerayli, M., & Valiyan, H. (2023). Effects of external and internal drivers of individual behavior voice on the moral courage and internal auditors’ effectiveness. Journal of Accounting & Organizational Change, 19(5), 735–764. https://doi.org/10.1108/JAOC-08-2021-0099

Eklöv Alander, G. (2023). Internal auditor independence as a situated practice: four archetypes. Accounting, Auditing & Accountability Journal, 36(9), 108–134. https://doi.org/10.1108/AAAJ-08-2019-4137

Erasmus, L., & Coetzee, P. (2018). Drivers of stakeholders’ view of internal audit effectiveness. Managerial Auditing Journal, 33(1), 90–114. https://doi.org/10.1108/MAJ-05-2017-1558

Fayi, S. M. (2022). Internal audit quality and resistance to pressure. Journal of Money and Business, 2. https://doi.org/10.1108/JMB-11-2021-0053

Gerhart, B., & Feng, J. (2021). The Resource-Based View of the Firm, Human Resources, and Human Capital: Progress and Prospects. Journal of Management, 47(7), 1796–1819. https://doi.org/10.1177/0149206320978799

Grima, S., Baldacchino, P. J., Grima, S., Kizilkaya, M., Tabone, N., & Ellul, L. (2023). Designing a Characteristics Effectiveness Model for Internal Audit. Journal of Risk and Financial Management, 16(2), 56. https://doi.org/10.3390/jrfm16020056

Grossi, G., Hay, D. C., Kuruppu, C., & Neely, D. (2023). Changing the boundaries of public sector auditing. Journal of Public Budgeting, Accounting & Financial Management, 35(4), 417–430. https://doi.org/10.1108/JPBAFM-05-2023-0079

Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/EBR-11-2018-0203

Hair, J. F., Sarstedt, M., Hopkins, L., & G. Kuppelwieser, V. (2014). Partial least squares structural equation modeling (PLS-SEM). European Business Review, 26(2), 106–121. https://doi.org/10.1108/EBR-10-2013-0128

Hegazy, M., & Farghaly, M. (2022). Internal audit function is a global governance pursuit: What could be done in emerging markets? Corporate Ownership and Control, 19(3), 201–216. https://doi.org/10.22495/cocv19i3art16

Helfat, C. E., Kaul, A., Ketchen, D. J., Barney, J. B., Chatain, O., & Singh, H. (2023). Renewing the resource‐based view: New contexts, new concepts, and new methods. Strategic Management Journal, 44(6), 1357–1390. https://doi.org/10.1002/smj.3500

Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.1016/0304-405X(76)90026-X

Karikari, A. M., Tettevi, P. K., Amaning, N., Opoku Ware, E., & Kwarteng, C. (2022). Modeling the implications of internal audit effectiveness on value for money and sustainable procurement performance: An application of structural equation modeling. Cogent Business & Management, 9(1). https://doi.org/10.1080/23311975.2022.2102127

Magno, F., Cassia, F., & Ringle, C. M. (2024). A brief review of partial least squares structural equation modeling (PLS-SEM) use in quality management studies. The TQM Journal, 36(5), 1242–1251. https://doi.org/10.1108/TQM-06-2022-0197

Mahyoro, A. K., & Kasoga, P. S. (2021). Attributes of the internal audit function and effectiveness of internal audit services: evidence from local government authorities in Tanzania. Managerial Auditing Journal, 36(7), 999–1023. https://doi.org/10.1108/MAJ-12-2020-2929

Mattei, G., Grossi, G., & Guthrie A.M., J. (2021). Exploring past, present and future trends in public sector auditing research: a literature review. Meditari Accountancy Research, 29(7), 94–134. https://doi.org/10.1108/MEDAR-09-2020-1008

Meranti, P. K. K. M. (2019). Wabup Said Hasyim hadiri pengukuhan Perwakilan BPKP Riau sekaligus terima sertifikat APIP Level 3. https://sipb.merantikab.go.id/artikel/wabup-said-hasyim-hadiri-pengukuhan-perwakilan-bpkp-riau-sekaligus-terima-sertifikat-apip-level-3

Nerantzidis, M., Pazarskis, M., Drogalas, G., & Galanis, S. (2022). Internal auditing in the public sector: a systematic literature review and future research agenda. Journal of Public Budgeting, Accounting & Financial Management, 34(2), 189–209. https://doi.org/10.1108/JPBAFM-02-2020-0015

Pooe, J. B., Barac, K., Plant, K., & Steyn, B. (2022). Signalling of internal audit effectiveness. South African Journal of Accounting Research, 36(3), 213–249. https://doi.org/10.1080/10291954.2021.2000727

Roussy, M., & Perron, A. (2018). New Perspectives in Internal Audit Research: A Structured Literature Review. Accounting Perspectives, 17(3), 345–385. https://doi.org/10.1111/1911-3838.12180

Samagaio, A., & Felício, T. (2023). The determinants of internal audit quality. European Journal of Management and Business Economics, 32(4), 417–435. https://doi.org/10.1108/EJMBE-06-2022-0193

Shuwaili, A. M. J., Hesarzadeh, R., & Bagherpour Velashani, M. A. (2024). Designing an internal audit effectiveness model for public sector: qualitative and quantitative evidence from a developing country. Journal of Facilities Management, 22(5), 792–810. https://doi.org/10.1108/JFM-07-2022-0077

Singh, K. S. D., Ravindran, S., Ganesan, Y., Abbasi, G. A., & Haron, H. (2021). Antecedents and Internal Audit Quality Implications of Internal Audit Effectiveness. International Journal of Business Science and Applied Management, 16(2), 1–21. https://doi.org/10.69864/ijbsam.16-2.145

Ta, T. T., & Doan, T. N. (2022). Factors Affecting Internal Audit Effectiveness: Empirical Evidence from Vietnam. International Journal of Financial Studies, 10(2), 37. https://doi.org/10.3390/ijfs10020037

Tran, Y. T., Nguyen, N. P., & Hoang, T. C. (2021). The role of accountability in determining the relationship between financial reporting quality and the performance of public organizations: Evidence from Vietnam. Journal of Accounting and Public Policy, 40(1), 106801. https://doi.org/10.1016/j.jaccpubpol.2020.106801

Turetken, O., Jethefer, S., & Ozkan, B. (2019). Internal audit effectiveness: operationalization and influencing factors. Managerial Auditing Journal, 35(2), 238–271. https://doi.org/10.1108/MAJ-08-2018-1980