CONFERENCE PROCEEDINGS Malaysia International Conference on Economics, Management and Accounting (MIICEMA) 2016

Hosted by Faculty of Economics and Business, University of 24 – 25 October 2016

The Strategy For Improving Competitiveness to win the ASEAN Economic Community (AEC)

Conference Proceedings

Conference Proceedings Malaysia Indonesia International Conference on Economics, Management and Accounting (MIICEMA) 2016

The Strategy For Improving Competitiveness to win the ASEAN Economic Community (AEC)

Editors: Dr. Junaidi, SE, M.Si Prof. Dr. Johannes, SE, MS Dr. Syahmardi Yacob, SE, MBA Dr. Tona Aurora Lubis, SE, MS Dr. Sri Rahayu, SE, M.Si, Ak, CA

Faculty of Economics and Business, Conference Proceedings Malaysia Indonesia International Conference on Economics, Management and Accounting (MIICEMA) 2016

The Strategy For Improving Competitiveness to win the ASEAN Economic Community (AEC)

ISBN: 978-602-98081-4-8

Editors Dr. Junaidi, SE, M.Si Prof. Dr. Johannes, SE, MS Dr. Syahmardi Yacob, SE, MBA Dr. Tona Aurora Lubis, SE, MS Dr. Sri Rahayu, SE, M.Si, Ak, CA

Cover design and Layout Junaidi

Publisher Faculty of Economics and Business, University of Jambi Jalan Raya Jambi-Ma.Bulian KM.15 Kampus Mendalo Darat, Jambi, Indonesia Telp. 0741-583317

First Published, December 2016

All right reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior permission of the publisher CONFERENCE COMMITEE

Patron Prof. Johny Najwan, SH, MH. Ph.D Drs. Amril, ME

Advisor Prof. Dr. H. Syamsurijal Tan, SE, MA Prof. Dr. H. Amri Amir, SE,M.Si Prof. Dr. Drs. H. Aulia Tasman, M.Sc Prof. Dr. H.M. Rachmad R, SE, M.Si Zulkfili, SE,MS

Organising Commitee Dr. Junaidi, SE, M.Si (Chairperson) Radja Syarah Patricia, SE, M.Sc (Secretary) Reka Maiyarni, SE, M.Si. Ak (Secretariat)

Dr. Johannes, SE, M.Si Siti Hodijah, SE, M.Si Drs. H. Edward, MM Dwi Kurniawan, SE, M.Si Dr. Syahmardi Yacob, SE, MBA Drs. Jefri Marzal, M.Sc, P.Hd Dr. Shopia Amin, SE, M.Si Dearmi Artis, SE, M.Sc Dr. Syahmardi Yacob, SE, MBA Drs. H. Mulyadi Raf, MBS Dr. Tona Aurora Lubis, SE, M.Si Drs. H. Agus Syarif, MBS Dr. Sri Rahayu, SE, M.Si, Ak, CA Paulina Lubis, SE, M.EI Dr. Haryadi, SE, MMS Dra. Erida, M.Si Dr. Ilham Wahyudi, SE, M.Si Dra. Sumarni, MM Dr. Arman Delis, SE, ME Drs. H. Purwaka Hari Prihanto, M.Si Dr. Hj. Zulfanetti, SE, M.Si Eddy Firza, SE, M.Acc, Ak Dr. Asep Machpuddin, SE, MM Eko Prasetyo, SE, M.Sc. Ak.CA Dr. H. Zamzami, SE, M.Si Kamadie Sumanda Syafis, SE, M.Acc, Ak.CA Dr. Syaparuddin, SE, M.Si Johannes Vyn Amzar, SE, M.Sc Dr. Syafri, SE, M.Si Liona Efrina, SE Dr. H. Afrizal, SE, M.Si, Ak.CA Nur Budi Utama, SE, MM Dr. H. Mukhzarudfa, SE, M.Si Farida, SE Dr. Syafri, SE, M.Si Ahmed Riza Fahlevi, SH Drs. Yulmardi, MS Singki Oktaviani, SE Mohammad Ichsan, SE, M.Si Drs. H. Hendri Leonardo Wirmie Eka Putra, SE, M.Si Nurlia Eriska Riyanda Guntari, SP Etik Umiyati, SE, M.Si Azlia Daratulaila Syam, SE Ade Titi Nifita, SE, MM Raden Nazaruddin Erni Achmad, SE, M.Si Syapriadi Parmadi, SE, ME Jatmiko Budi Santoso

Secretariat: Faculty of Economics and Business, University of Jambi, Kampus Mendalo Darat, Jambi, Indonesia Telp. 0741-583317 e-mail: [email protected]

FOREWORD

The Malaysia Indonesia International Conference on Economics, Management and Accounting (MIICEMA) is an annual international conference that gathers academics and practitioners from Malaysia, Indonesia and around the World to facilitate the presentation and sharing of research findings particularly in the areas of economics and management. Numerous benefits have been achieved from the sharing of knowledge and building of working relationships through presentations of working papers after the organisation of 16 series of the conference. The conference has become an important platform for academics to share information regarding current issues and new economic and business challenges prevalent in both South East Asia and globally. As a continuation of the memorandum of understanding between Universiti Kebangsaan Malaysia, Universitas Syiah Kuala, Institut Pertanian Bogor, Universitas Surakarta and Universitas as the founding institutions of MIICEMA, 2016 is witnessing once again the organising of the 17th MIICEMA. Following the tradition of the long-established friendship, the honour of becoming the main organiser and host to the 17th MIICEMA has now been transferred to University of Jambi, Jambi through the Faculty of Economics and Business. Through the organising of the conference, the research findings that will be presented by academics in various fields such as economics, management and accounting will surely become guides and models for other academics in developing the branches of knowledge and for the industry in managing and strengthening their businesses. The chosen theme for this year MIICEMA is ” The Strategy For Improving Competitiveness to win the ASEAN Economic Community (AEC) ″. Global economic climate has been undergoing shocks that adversely affecting government and business organisations. The economic turmoil has been considered by few as the worst in the century that prudent and solid business strategies must make accurate market interpretation of both opportunities and constraints. With this in mind, the 17th MIICEMA aims to provide a platform for both academicians and practitioners to sit together and elaborate on these challenges. The goals and objectives of this international conference are as follows:  to become a platform for academics in the South East Asia to share latest research findings on economic, management and accounting issues.  to identify emerging economic and business challenges prevalent in South East Asia and around the world amidst the 2016 economic turmoil.  to gather input on new opportunities in the domain of business within the contexts of South East Asia and global amidst the 2016 economic turmoil.  to sustain research collaborations that produce high impact outputs.  to elevate the status of MIICEMA member institutions through presentation of internationally- recognised research results. Following the phenomenal successes of the previous conferences, MIICEMA will be proudly brought to you again this October by University of Jambi, Jambi, Indonesia. This year MIICEMA will be organised in conjunction with the Seminar and Annual Meeting of the Western Division of Economics Institutions Cooperation. This is an annual event involving 27 state universities and several private universities that offer Economics programmes in Indonesia. In 2016, the Western Division of Economics Institutions Cooperation meeting will be hosted by the Faculty of Economics and Business, University of Jambi, Jambi, which will also serve as the main organizer of MIICEMA 2016. This year MIICEMA highlights the current issue facing economies in the region thorugh a theme of ” The Strategy For Improving Competitiveness to win the ASEAN Economic Community (AEC) ″. This theme is to be supported with few key tracks; Microeconomics, Macroeconomics, Monetary Economics, Public Economics, Regional and Urban Economics, International Economics, Natural Resource Economics, Industrial Economics, Labor Economics, Development Studies, Business, Management and Organization, Marketing, Finance, Human Resources, Financial Accounting, Managerial and Behavioral Accounting, Auditing, Accounting Information Systems, Public Sector Accounting, Social and Environmental Accounting, Islamic Economics, and other related areas. This collection doest not include the totality of the papers presented at the conference, as not all contributors submitted their written papers for publication.

Dr. Junaidi, SE, M.Si Conference Chair

i

WELCOMING SPEECH DEAN OF THE FACULTY OF ECONOMICS AND BUSINESS UNIVERSITY OF JAMBI

I would like to welcome all participants to the 17th Malaysia Indonesia International Conference on Economics, Management and Accounting (MIICEMA) in Jambi, Indonesia. It is truly an honor and a privilege for Faculty of Economics and Business, University of Jambi to host this International conference.

I have no doubt in my mind, that this conference will be a worthwhile experience. We have an opportunity to learn each other from some of the best experts in different decipline. Hence I hope after the conference finished, we are enriched with a better understanding of contemporary issues in economics and business in South East Asia. Furhtermore, as the member of MIICEMA, we can enrich the network for some important aspects such as publication a student exchange.

I would like to express our sincere gratitude and appreciation to many individuals for their invaluable input to make succes this conference. I would also like to extend a special thank you to our Institutions’ partners for their support to organize this event successfully.

So, I wish you have a pleasant International Conference and enjoy your stay in Jambi.

Drs. H. Amril, ME Dean of the Faculty of Economics and Business University of Jambi

ii

WELCOMING SPEECH RECTOR OF UNIVERSITY OF JAMBI

I extend my warm welcome to all of the distinguished speakers and participants of the 17th Malaysia Indonesia International Conference on Economics, Management and Accounting (MIICEMA) which held by Faculty of Economics and Business, in October 24-25, 2016.

As a Rector of University of Jambi, I am pleased to witness the 17th MIICEMA, it provides a unique opportunity for scholars, experts, researchers, to assemble and share ideas on critical issues and trends in economics and business. Furthermore, I hope this conference could develop the valuable network and international collaboration amongst universities in Indonesia and Malaysia, as well as to facilitate publications of research by Indonesia and Malaysia scholars in international journal.

I congratulate the Dean of Economics and Business, the chairman of the conference, all the renowned speakers and delegates for their participation that makes this conference possible. I welcome you all to University of Jambi.

As a part of the provincial cultural promotion, we hope you enjoy the entire traditional and unique cultural atmosphere. I urge you also to enjoy the beautiful of Muaro Jambi temple and Gentala Arsy Bridge. Muaro Jambi Temple as it has been revealed is the place of Buddhism taught not only for the ancient of Indonesian but for South Asia Countries.

Last but not least, we thank you to every person both that comes from internal and external organization who makes this conference conducted. Finally, I hope God bless you all as long as you follow the conference.

Prof. H. Johni Najwan, SH, MH, Ph.D Rector of University of Jambi

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iv CONTENTS

FOREWORD ...... i

WELCOMING SPEECH DEAN OF THE FACULTY OF ECONOMICS AND BUSINESS UNIVERSITY OF JAMBI ...... ii

WELCOMING SPEECH RECTOR OF UNIVERSITY OF JAMBI...... iii

CONTENTS...... v

MANAGEMENT

MAPPING A TRUE SUPPLY NETWORK STRUCTURE: AN IMPLICATION TO THE PRACTICE OF SUPPLY CHAIN MANAGEMENT...... 3 Lokhman Hakim Osmana; *Azhar Ahmad ...... 3 ATTRIBUTION THEORY PERSPECTIVE TO OBSERVE THE IMPACT OF CULTURE TOWARD SERVICE FAILURE: IT’S IMPLICATION ON SERVICE INDUSTRY...... 21 Lizar Alfansi; Effed Darta Hadi; Ferry Tema Atmaja ...... 21 THE CHARACTERISTICS OF THE ENTREPRENEUR AND THE DESIRE TO BECOME ENTREPRENEURS AMONG UNDERGRADUATE STUDENTS...... 29 Ahmad Mardalis; Imron Rosyadi...... 29 THE EFFECT OF BRAND ASSOCIATIONS TOWARD BRAND EQUITY AND BRAND LOYALTY AS INTERVENING VARIABLE OF HONDA MOTORCYCLE IN JAMBI CITY ...... 37 Anaseputri Jamira*, Ade Oktavia**, Junaidi***...... 37 EFFECT OF REWARD MANAGEMENT ON JOB SATISFACTION...... 45 Azman Ismail1, AnisAnisah Abdullah2, NurIzzaty Mohamad3...... 45 ANTECEDENTS OF TOURIST SATISFACTION AND ITS IMPACT ON LOYALTY TO A PARTICULAR DESTINATION ...... 51 Effed Darta Hadi, Fachri Eka Saputra ...... 51 MONETARY POLICY AND MACROECONOMIC RESPONSES: SVAR STUDY OF EGYPT...... 59 Mohamed AseelShokr; Zulkefly Abdul Karim; Mohd. Azlan Shah Zaidi ...... 59 THE STRATEGY FOR IMPROVING COMPETITIVENESS TO WIN THE ASEAN ECONOMIC COMMUNITY (AEC) USING THE ECONOMIC LANDSCAPE (CASE STUDY OF JAMBI PROVINCE)...... 73 Budi Kurniawan1, Susiawati Kristiarini2...... 73 E-RETAILING: CONSUMER MOTIVATION TO SHOP IN INDONESIA AND THAILAND ...... 79 Seprianti Eka Putri ...... 79 STRATEGY MODEL OF OPTIMAZING FOR MINIMARKET RETAIL BUSINESS PERFORMANCE: STUDY IN JAKARTA AND BANDUNG, INDONESIA...... 95 Syahmardi Yacob*, Sucherly**, Diana Sari**, AsepMulyana**...... 95 RURAL INDUSTRIAL MANAGEMENT: THE IMPLEMENTATION OF SIMPLE-BASED TECHNOLOGY IN SUPPORTING THE ECONOMIC RESILIENCE AS PERCEIVED BENEFITS ...... 101 Slamet Widodo, Effed Darta Hadi, M Abduh, Berto Usman...... 101 FACTORS INFLUENCING INTERNET USAGE AMONG WOMEN ENTREPRENEURS ...... 113 Muhaini I.; Azhar Ahmad ...... 113 THE SHARIA BANKING PERFORMANCE BASED ON ISLAMIC INDICES IN THE ASEAN COUNTRIES...... 121 Wiyadi1, Sayekti Endah Retno Meilani 2, Rina Trisnawati3, Wahyu Pramesti4 ...... 121

v PERFORMANCE OF ISLAMIC INDICES: RISK ADJUSTED RETURNS OF SHARIA COMPLIANT STOCKS (STUDY ON JAKARTA ISLAMIC INDEX AND DOW JONES ISLAMIC TURKEY FOR THE YEARS 2010-2014) ...... 129 1 2 Ade Banani, MMS ; Nur Afni Hidayatun ...... 129 HOW SPOUSAL SUPPORT AND WORK-FAMILY BALANCE CAN INFLUENCE TO CAREER SUCCESS? ...... 141 Shofia Amin...... 141 KNOWLEDGE MANAGEMENT, STRATEGIC THINKING AND SUSTAINABLE COMPETITIVE ADVANTAGE IN SMALL ECONOMIC ENTERPRISE BATIK BASUREK INDUSTRY AT BENGKULU CITY ...... 149 Praningrum; Muhartini Salim ...... 149 UNDERSTANDING HOW SMEs CREATIVE INDUSTRIES CAN IMPROVE INNOVATION PERFORMANCE ...... 157 Fachri Eka Saputra, Sularsih Anggarawati, Ferry Tema Atmaja, ...... 157 THE ROLE OF STRATEGIC IMPLEMENTATION OF CORPORATE SOCIAL RESPONSBILITY AS SUSTAINABLE DEVELOPTMENT STRATEGIC CONSIDERATION FOR BASIC SITUATION MANAGEMEN DECISIONS MAKING IN BUSINESS COMPETITION ASEAN ECONOMIC COMMUNITY (AEC) (A QUALITATIVE STUDY AT PAMOR GANDA CRUMB RUBBER LTD)...... 165 Nila Aprila, Fenny Marietza, Riski Rian Nainggolan...... 165 CAN BALANCED SCORECARD BE APPLIED TO ANALYZE THE MISSIONS OF LOCAL GOVERNMENT? DOUBLE CASES OF INDONESIAN LOCAL GOVERNMENT MISSIONS...... 177 Agung Riyardi*; Sri Wahjuni**; Latifah***; Widojono***...... 177 PERCEPTION ON JUSTICE, TRUST AND TAX COMPLIANCE BEHAVIOUR IN MALAYSIA...... 187 Sellywati Mohd Faizal*,Mohd Rizal Palil, Ruhanita Maelah, Rosiati Ramli**...... 187 STRATEGIES FOR INCREASING THE COMPETITIVENESS OF SMEs IN THE PROVINCE OF YOGYAKARTA SPECIAL REGION ENTERING THE ASEAN ECONOMIC COMMUNITY...... 197 Aftoni Sutanto*, Alia Ariesanti** ...... 197 ASSESSING SERVICE QUALITY LEVEL: A STUDY ON THE LIGHT RAIL TRANSIT (LRT)...... 203 Mhd Suhaimi Ahmad; Mohd Daud Ismail; Nor Farisha Omar...... 203 COMMERCE ETHICS of MUHAMMAD PBUH’ AND UNIVERSAL VALUES IN ERA OF PROPHET HOOD...... 213 Suwandi; Muhammad Hakimi Mohd Shafiai ; Wan Nasyrudin Wan Abdullah ...... 213 CALLING FOR KNOWLEDGE, STRONG INTENTION (NIAT), PRACTICAL WISDOM AND BUSINESS PERFORMANCE: ISLAMIC PERSPECTIVE...... 227 Nur Adillah Binti Abdul Rahman; Noor Hasni Binti Juhdi (DBA) ...... 227 THE EFFECT OF LIQUIDITY, PROFITABILITY AND DIVIDEND POLICY ON FINANCING DECISIONS ON BANKING COMPANIES LISTED IN INDONESIA STOCK EXCHANGE (IDX) WITH CONSIDERATION OF THE COMPANY’S GROWTH AS MODERATING VARIABLE ...... 233 Ahmad Nur Budi Utama ...... 233 THE EFFECT OF OWNERSHIP AND MANAGEMENT STRUCTURE ON FINANCIAL PERFORMANCE ...... 241 Iskandar 1), Tona Aurora Lubis 2) ...... 241 REVIEW OF PERSONAL AND INTERPERSONAL MOTIVATIONS ON BEHAVIORAL INTENTIONS OF NON-DECEPTIVE CONSUMER: THE ROLE OF M-O-A MODEL ...... 245 Musnaini 1), Asrini2) ...... 245

vi MODEL OF ENERGY CONSUMPTION AND COST EFFICIENCY OF FISHERMAN’S CATCH IN JAMBI PROVINCE ...... 253 Tona Aurora Lubis 1), Muhammad Safri 2), Zulkifli 1)...... 253 THE INFLUENCE OF SERVICE RECOVERY ON BRAND IMAGE OF PUBLIC SERVICE COMPANY : A LITERATURE REVIEW ...... 255 Nasta Trilakshmi...... 255 EFFECT OF OWNERSHIP STRUCTURE AND MANAGEMENT STRUCTURE OF THE FIRM VALUE...... 263 Zulkifli 1), Tona Aurora Lubis 2) ...... 263 POSITIONING STRATEGY AND ITS RELATIONSHIP WITH FINAL DECISION OF PRIVATE UNIVERSITY IN JAMBI PROVINCE ...... 267 Indra Budaya...... 267 THE INFLUENCE OF BRAND PROMINENCE ON CONSUMER ATTITUDE AND PURCHASE INTENTION OF LUXURY FAKE PRODUCTS...... 277 Mulyadi Raf*; Musnaini** ...... 277 THE PSYCHOLOGICAL CONTRACT IN IMPROVING ORGANIZATIONAL CITIZENSHIP BEHAVIOR (OCB) AND THE ATTITUDE OF EMPLOYEES AS MEDIATOR VARIABLES (STUDY OF COMPARISON ON STATE-OWNED ENTERPRISES, REGIONAL-OWNED ENTERPRISES AND PRIVATE STATE-OWNED ENTERPRISESIN JAMBI PROVINCE) ...... 283 Sry Rosita...... 283 ANALYSIS OF INTELECTUAL CAPITAL, THE VALUE OF THE COMPANY TO FINANCIAL PERFORMANCE OF COMPANY (EMPIRICAL STUDY ON MANUFACTURING COMPANY IN BEI ) ...... 291 Iwan Eka Putra...... 291 STRATEGY OF DIFFERENTIATION COMPETITIVENESS OF ISLAMIC BANGKING: A LITERATURE REVIEW...... 299 Anzu Elvira ZaharaTobing ...... 299 THE ANALYSIS OF AGRICULTURAL EXTENSION OFFICERS’ COMPETENCE IN THE PROVINCE OF JAMBI...... 305 Edison ...... 305 HUMAN RESOURCE DEVELOPMENT OF LECTURER FROM THE WEST AND ISLAMIC PERSPECTIVES IN THE EFFORTS TO INCREASE THE COMPETITIVENESS OF ISLAMIC HIGHER EDUCATION (PTKI) ...... 311 Dicki Hartanto...... 311 ROLE OF A SOCIAL MARKETING CAMPAIGN ON THE DECISION OF THE COMMUNITY TO PAY ZAKAT THROUGH INSTITUTE OF AMIL ZAKAT...... 319 Sigit Indrawijaya...... 319

ECONOMICS

OPPORTUNITIES AND CHALLENGES OF TAX AMNESTY (ISLAMIC POLITICAL ECONOMIC ANALYSIS)...... 327 Muhammad Sholahuddin...... 327 ANALYSIS OF RICE CONSUMPTION AND RICE IMPORT IN INDONESIA...... 331 Nanik Istianingsih, Rd. Ade T. Anjaya...... 331 THE ROLE OF SOCIAL CAPITAL ON THE LEVEL OF HOUSEHOLD EXPENDITURE IN JAMBI PROVINCE (STUDY OF URBAN AREAS) ...... 337 Dadang Hardiwan ...... 337 MONEY ILLUSION EFFECT REDENOMINATION RUPIAH...... 343 Evan Stiawan ...... 343

vii DETERMINANTS AND EXPORT COMPETIVENESS OF COFFEE: COMPARISON BETWEEN INDONESIA AND VIET NAM ...... 349 Zulkarnain Ishak ...... 349 THE INFLUENCE OF ECONOMIC GROWTH AND ORIGINAL REGIONAL INCOME IN INDONESIA DURING THE PERIOD 2007 - 2014...... 357 Deny Eko Purwanto; Pahrul Rozi ...... 357 THE STATE OF LOCAL GOVERNMENT EFFICIENCY IN , INDONESIA...... 365 Roosemarina A. Rambe ...... 365 MODEL FOR THE DEVELOPMENT OF PLANTATION-BASED GROWTH POLES VILLAGE...... 377 Junaidi; Amri Amir; Hardiani...... 377 ESTIMATION AND ASSESSMENT OF LAND AND BUILDING TAX BASE OF RURAL URBAN SECTOR (PBB P2) AS A LOCAL TAX IN THE DISTRICT MUARO JAMBI...... 385 Halimah; Zamzami...... 385 STUDY OF FACTORS AFFECTING DEMAND FOR CREDIT AGRICULTURAL SECTOR AND CONTRIBUTION AGRICULTURAL SECTOR TO ECONOMY PROVINCE OF JAMBI...... 395 Saidin Nainggolan...... 395 THE EFFECT OF ECONOMIC GROWTH AND THE LEVEL OF WAGES OF IN- MIGRATION JAMBI CITY...... 401 Yulmardi ...... 401 IMPACT ANALYSIS TITLED HUMAN DEVELOPMENT INDEX (HDI) ON POVERTY AND ECONOMIC GROWTH IN THE DISTRICT/ TOWN OF JAMBI PROVINCE ...... 407 Ardi Afrizal...... 407 EFFECT GDP, INTERST RATE, INFLATION TO FDI ASEAN (5) ...... 415 Handri ...... 415 CONTRIBUTION OF FARM NON FOOD CROPS SUB SECTOR ON JAMBI PROVINCE ECONOMY...... 423 Yanuar Fitri...... 423 THE EFFET OF FINANCIAL INCLUSION ON BANK EFFICIENCY IN A DUAL- BANKING SYSTEM...... 429 Juzaili Juhari; Mariani Abdul-Majid...... 429 ANALYSIS OF MICRO, SMALL AND MEDIUM CREDITS AND ITS INFLUENCE ON AN EMPLOYMENT IN MICRO, SMALL AND MEDIUM ENTERPRISES (MSMEs) IN THE PROVINCE OF JAMBI...... 441 Etik Umiyati...... 441 ANALYSIS OF INDUSTRIALIZATION AND ECONOMIC GROWTH IN JAMBI PROVINCE...... 449 Erni Achmad...... 449 MODEL ANALYSIS FOR ANNUAL CROP PRODUCTION EFFICIENCY...... 457 Kuswanto ...... 457 ECONOMIC GROWTH, POVERTY, INCOME INEQUALITY AND UNEMPLOYMENT ( STUDY IN ALL PROVINCES IN INDONESIA)...... 465 Zulgani 1; Syaparuddin 2 ...... 465 FOREIGN DIRECT INVESTMENT IN INDONESIA AND ITS ROLE TO ECONOMIC GROWTH (Vector Auto Regression Model Approach) ...... 471 Siti Hodijah...... 471 ANALYSIS OF REGIONAL ECONOMIC GROWTH IN KERINCISEBLAT NATIONAL PARK (CASE STUDY KERINCI DISTRICT IN JAMBI) ...... 479 Adi Putra...... 479

viii PREVALENCE FERTILITY WHICH CAUSED THE ECONOMIC AND SOCIAL CONDITIONS (SPATIAL ANALYSIS BY GEOGRAPHIC WEIGHTED LOGISTICS REGRESSION)...... 489 Fauzi Darwas ...... 489 THE INFLUENCE OF CREDIT BANKING, INVESMENT, EXPORT AND GOVERNMENT SPENDING ON ECONOMICS GROWTH IN INDONESIA...... 497 Hasminidiarty...... 497 CONTRIBUTION OF AGRICULTURE SECTOR TOWARD GDP AND ELASTICITY OF LABOR ABSORPTION IN EAST TANJUNG JABUNG ...... 507 Indria Mayesti ...... 507 DETERMINANT OF ECONOMIC GROWTH IN JAMBI (DEMAND APPROACH) ...... 513 Irmanelly...... 513 EFFECTIVE EMPOWERMENT OF PEASANT FOOD...... 517 Navarin Karim ...... 517 DEVELOPMENT MODEL FOR MARITIME TOURISM POTENSIL RELATED WITH THE PEOPLE COASTAL ECONOMY IN GORONTALO PROVINCE ...... 521 Irawati Abdul; Irina Popoi; Zainudin Antuli...... 521 MAIZE PROCESSING PRODUCTION DEVELOPMENT AS THE ECONOMIC DRIVEN OF PEOPLE IN GORONTALO PROVINCE...... 531 Amir Halid; Mohammad Ikbal Bahuwa; Zainudin Antuli; Irawati Abdul...... 531 BUDGET DEFICIT AND POLICY ANALYSIS IN THE PROVINCE OF JAMBI ...... 545 Junaidi...... 545 FISCAL DECENTRALIZATION AND TRADE BETWEEN PROVINCES IN SUMATRA: AN APPROACH GRAVITY MODEL...... 555 Khabri ...... 555 PERCEIVED SOCIO-ECONOMIC IMPACTS OF COAL FUELLED STEAM POWER PLANT PROPOSED TO ESTABLISH IN PULAU BAAI, BENGKULU, INDONESIA...... 565 Muhamad Abduh; Benardin...... 565 THE EFFECT OF LOCAL FINANCIAL PERFORMANCE ON CAPITAL EXPENDITURE IN THE JAMBI PROVINCE GOVERNMENT...... 565 Yolanda; Zulfanetti INDONESIA'S EXPORT-IMPORT ANALYSIS: GRANGER CAUSALITY APPROACH...... 566 Syaparuddin

ACCOUNTING

IMPLEMENTATION OF PARTICIPATORY BUDGETING, TRANSPARANCY, ACCOUNTABILITY AND PERFORMANCE-BASED BUDGETING TO THE PERFORMANCE OF LOCAL GOVERNMENT UNIT...... 569 Baihaqi, Dri Asmawanti S ...... 569 THE INFLUENCE OF THE QUALITY OF HUMAN RESOURCES AND THE IMPLEMENTATION OF THE REGIONAL FINANCIAL ACCOUNTING ON THE QUALITY OF FINANCIAL REPORTS OF REGIONAL TASKFORCE WITH A SYSTEM OF INTERNAL CONTROL THE GOVERNMENT AS VARIABLE INTERVENING...... 579 Shylvia Andriani1), Sri Rahayu2), Iskandar Sam2) ...... 579 INTELLECTUAL CAPITAL, FIRM VALUE AND FINANCIAL PERFORMANCE ...... 589 Aida Irsyahma; Nikmah...... 589 PERFORMANCE-BASED BUDGET, CLARITY OF OBJECTIVES, BUDGET REPORTING SYSTEM, OBSERVANCE OF LAWS AND REGULATIONS, AND PERFORMANCE ACCOUNTABILITY OF GOVERNMENT AGENCIES ...... 599 Dri Asmawanti S, Baihaqi, Irawan Sahadi...... 599

ix THE EFFECT OF GOOD CORPORATE GOVERNANCE (GCG) ON FINANCIAL PERFORMANCE AND THE IMPLICATIONS ON FIRM VALUE ...... 609 Khairiyani1), Sri Rahayu2) ...... 609 ANALYSIS IMPLEMENTATION OF GOVERNMENT ACCOUNTING STANDARS BASED OF ACCRUAL IN OFFICE OF ASSETS MANAGEMENT AND REGIONAL FINANCIAL...... 619 Khairul Pahmi, Sri Rahayu, Misni Erwati ...... 619 THE ANALYSIS OF TURNOVER INTENTION FACTORS AGAINST ACCOUNTANTS (EMPIRICAL STUDY ON FINANCING COMPANY IN BENGKULU CITY)...... 627 Nurjoni Amiruddin, Madani Hatta, Zahrah Indah Ferina ...... 627 THE MODERATING ROLE OF FIRM SPECIFIC FACTORS ON THE INFLUENCE OF ENTERPRISE AND CREDIT RISK MANAGEMENT ON FIRM PERFORMANCE OF INDONESIAN BANKING COMPANIES ...... 635 Saiful, Mentari Arizka ...... 635 THE POLICY FOR SUSTAINABILITY REPORTING OF INDONESIA’S HIGHER EDUCATIONAL INSTITUTIONS ...... 647 Alia Ariesanti...... 647 THE EFFECT OF ACCOUNTABILITY AND TRANSPARENCY OF THE LOCAL GOVERNMENT FINANCIAL STATEMENTS QUALITY (LKPD) AND THE IMPLICATIONS OF FINANCIAL PERFORMANCE BENGKULU PROVINCIAL GOVERNMENT ...... 653 Nurna Aziza, Effed Darta Hadi, Hendri Marulitua Hutapea*, Andi Agus**...... 653 SYNERGIZING MANACIKA IN THE STRATEGIC MANAGEMENT ACCOUNTING: SOLUTION FOR THE STIGMA OF COOPERATION? ...... 665 Made Susilawati1*, Unti Ludigdo2, Gugus Irianto3, Zaki Baridwan4 ...... 665 THE EFFECTS OF OWNERSHIP STRUCTURE AND FIRM CHARACTERISTICS TO PERFORMANCE AND RISK: THE ROLE OF THE QUALITY OF CORPORATE GOVERNANCE VARIABLE ...... 673 Triyono; Fatchan Achyani ...... 673 EFFECT OF INCENTIVE EXECUTIVE, CORPORATE RISK AND CORPORATE GOVERNANCE ON TAX AVOIDANCE ...... 683 Pratana P. Midiastuty, Eddy Suranta, Rama Pramudya Kusuma...... 683 MAPPING THE REGULATIONS AND POLICY ON THE IMPLEMENTATION OF ACCRUAL ACCOUNTING IN INDONESIA AND JAMBI MUNICIPALITY...... 693 1)* 2) 2) 2) Yudi Made Sudarma Ali Djamhuri Zaki Baridwan ...... 693 THE INFLUENCE OF GOVERNMENT AUDITOR’S KNOWLEDGE, ABILITY, AND SKILL TOWARDS THE EFFECTIVENESS OF AUDIT INVESTIGATION PROCESS ON FRAUD DETECTION IN INDONESIA...... 703 Fitri Habiba Mahmuda*; Fachruzzaman**...... 703 RELATIONSHIP BETWEEN THE ACHIEVEMENT OF ECONOMIC GROWTH WITH DIFFERENT QUALITY OF FINANCIAL STATEMENTS AND DISTRICT/CITY IN SOUTHERN SUMATRA (SUMBAGSEL)...... 713 Intan Purnama Sari; Fachruzzaman ...... 713 ANTECEDENTS OF ENTERPRISE RISK MANAGEMENT (ERM) IMPLEMENTATION AND ITS CONSEQUENCE TO INDONESIAN BANKS’ CREDIT RISK ...... 721 Husaini*; Saiful** ...... 721 THE EFFECT OF CORPORATE SOCIAL RESPONSIBILITY, CORPORATE GOVERNANCE, AUDIT QUALITY, AND LEVERAGE ON INCOME SMOOTHING (EMPIRICAL STUDY ON MINING COMPANIES LISTED IN INDONESIAN STOCK EXCHANGE)...... 731 Rini Indriani; Nur’aini ...... 731

x INDIVIDUAL CAPACITY AND USE OF ACCOUNTING INFORMATION IN MAKING FINANCIAL STATEMENTS IN SMALL BUSINESS IN BENGKULU ...... 741 Isma Coryanata ...... 741 ROLE OF THE INTERNAL AUDITOR GOVERNMENT TO REALIZE THE LOCAL GOVERNMENT NET ...... 761 Rahayu; Sri Rahayu ...... 761

THE PERCEPTION OF NEW ACCOUNTANTS ABOUT SUSTAINABILITY REPORTING (Study at )...... 769 Fenny Marietza; Nila Aprila; Nidya Lestari...... 769 THE EFFECT OF SHAREHOLDING, PROFITABILITY, LEVERAGE, FIRM SIZE AND INDEPENDENT COMMISSIONER ON TAX AVOIDANCE: TESTING IN GROUP AND NON GROUP FIRM ...... 777 Eddy Suranta; Pratana Puspa Midiastuty; Afrizal Saputra...... 777 EFFECT VOLATILITY OF COMPREHENSIVE INCOME AND FAIR VALUE APPLICATIONS TO RETURN AND VOLATILITY OF SHARE PRICE (STUDIES IN THE BANKING COMPANY LISTED ON THE INDONESIAN STOCK EXCHANGE)...... 777 Madani Hatta; Naeyza Islamey Ningrum...... 777

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PERFORMANCE-BASED BUDGET, CLARITY OF OBJECTIVES, BUDGET REPORTING SYSTEM, OBSERVANCE OF LAWS AND REGULATIONS, AND PERFORMANCE ACCOUNTABILITY OF GOVERNMENT AGENCIES

Dri Asmawanti S, Baihaqi, Irawan Sahadi Accounting Department- Economics and business Faculty, University of Bengkulu e-mail: [email protected]

Abstract. The aim of this study is to empirically prove the influence of performance-based budgeting, the clarity of the budget target, reporting systems, and adherence to the laws and regulations against the performance accountability of government agencies. This study was conducted in the Ministry of law and Human Rights (human rights) of Bengkulu province. The respondents of the research was the leader in the organization which is under the Ministry of Justice and human rights, by providing questionnaires. The data used in this study was the primary data of 56 respondents. The tool data analysis applied Smart PLS version 2.0 M3. The results showed that outher model testing is good for convergent validity, discriminant validity, and then reliability testing, all showed that the condition of gauges and the existing data was good. Inner model Testing also showed that its structural equation model was fit. Hypothesis testing produced that Clarity of budget targets, reporting systems, and adherence to the laws and regulations have a positive influence against the performance accountability of government agencies. Performance-based budgets, thus has no effect on the performance accountability of government agencies.

Keywords: performance-based Budgets, clarity of Objectives, Budget reporting system, observance of laws and regulations, performance accountability of government agencies

INTRODUCTION The embodiment of good governance in Government demands the increasing of accountability, by applying the good norms of in running government wheel such as the application of the system of accountability for the proper, clear, measurable and legitimate, so that the accomplishment of government and the development can be directly helpful, effective, clean and responsible, as well as free from corruption, collusion and nepotism. In a more specific reference, the decision of the head of LAN Number 239/IX/6/8/2003 on guidelines for the preparation of Reporting performance accountability of government agencies, is explaining that the performance accountability of government agencies is the embodiment of an obligation of government agencies to be responsible the success and failure of the implementation of the Organization's mission in achieving the goals and objectives that have been established through periodic accountability system. To support the enhancement of the accountability, the Government issued Regulations covering Government Regulation (PP) No. 8 in 2006 about financial reporting Guidelines and the performance of government agencies, the regulation of the Minister of State for Administrative Reform State number PER/09/URM.PAN/05/2007 General guidelines about the determination of the Main performance indicators in an environment of government agencies, and presidential instruction number 7 in 1999 about the accountability of the performance of government agencies. One of its realization is by making accountability and evaluation reports contained in the report of the performance accountability of government agencies (LAKIP). The Government as the provider of the public funds in order to meet performance accountability may notice a few things like budget, reporting systems and observance of laws and regulations. The purpose of this study is to examine the influence of the application of performance-based budgeting, the clarity of the budget target, reporting systems, and adherence to the laws and regulations against the performance accountability of government agencies. The budget became a very relevant and important governmental surroundings because of its impact on government accountability, with respect to the function of the Government in providing services to the community. Act No. 33 of 2004 and No. 17 of 2004 about the finances of the State has established the use of a performance-based budget approach is an approach in the preparation of the budgets that are based on the performance to be achieved. The application of performance-based budgeting is a form of budget reforms in improving the budgeting process is accountable. Performance-based budget (performance based budgeting) is output-oriented budgeting and relates very closely to the vision, mission and strategic plan of the Organization (Bastian,

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2006). Budget performance approach emphasized on the concept of value for money and oversight of performance output (Mardiasmo, 2002). The link target of the budget with the clarity of the performance accountability and its effects on performance accountability was ever delivered by Indudewi (2009) and Anjarwati (2012) who said that the clarity of the budget goal influences on performance accountability of government agencies. A clear budget targets will make it easier to account for the success or failure of the implementation of the tasks of the Organization in order to achieve the goals that have been set previously. The higher the degree of clarity of the objectives of the budget, it will be increasingly high levels of performance accountability of government agencies. Reporting system has related to the accountability of the performance of government agencies. This has been proved by Anjarwati (2012) and Indudewi (2009) stating that the reporting system has an effect on performance accountability of government agencies. Regional financial management systems that include reporting systems will create a transparent financial management and accountability. This suggests that the higher the level of the reporting system, it will have an effect on increasing accountability for the performance of government agencies. Observance of laws and regulations is also an important factor that directly relates to the accountability of the performance of the Government, as stated in The President of the Republic of Indonesia number 7 in 1999 about the performance accountability of government agencies. The existence of this accountability report generated expected would be appropriate and fit within the framework of the fulfilment of duties to the Central Government and public information needs. Therefore, to realize the performance accountability of government agencies required obedience over regulatory legislation (Riantiarno & Azlina, 2011). This is supported by research conducted Sumiati (2012) that proved that observance of laws and regulations have a positive affect toward the performance accountability of Government. The phenomena above indicates that how important performance accountability as accountability of public institutions that use public funds in an economical, effective, and efficient without any dissipation of funds and corruption. The results of the evaluation of the performance accountability of government agencies by 2015 conducted by the Ministry for administrative reform of the State apparatus and Bureaucracy (PANRB) against 77 ministries/agencies that routinely done every year, the Ministry of Justice and the human right gain value of B or better with the score 65-75 range. Based on the assessment and the various pefomena in the top of the link budget, reporting systems and laws and regulations, then the researchers want to prove in a comprehensive manner the implementation of performance-based budgeting relation, the clarity of the budget target, reporting systems, and adherence to the regulations with the performance accountability of government agencies.

THE CONCEPT OF THEORY, THE PREVIOUS STUDY AND FORMULATION OF HYPOTHESIS

Performance Accountability Of Government Agencies The increasing demands of society towards the Organization of a good and clean government has encouraged the development and implementation of a system of accountability that is clear, precise, organised and effective Accountability Reports, known as government agencies (LAKIP). The goal of LAKIP is to make the holding of governance and development can take place useful, effective, responsible and free from the practice of collusion, corruption and nepotism. The Government then issued a Presidential Instruction of the Republic of Indonesia number 7 in 1999 about the accountability of the performance of government agencies. In the presidential instruction, there are several definitions of performance accountability that is the embodiment of the obligations of government agencies accountable for the success or failure of the Mission of the Organization in achieving the goals and targets that have been established through the periodic accountability tool. At first the accountability is often associated with finance, but now performance has been a major concern despite financial (BPKP, 2007; Mardiasmo, 2002). The decision of the head of the LAN Number 239/IX/6/8/2003 on guidelines for the preparation of performance accountability of government agencies, explaining that the performance accountability of government agencies is the embodiment of an obligation of government agencies accountable for success and failure of the implementation of the Organization's mission in achieving the goals and objectives that have been established through the periodic accountability system.

Performance-based budgeting and performance accountability of government agencies Performance-based budgeting is budgeting system oriented organization output (output measurement) as an indicator of performance and closely related to the vision, mission and strategic plan

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of the organization (Bastian, 2006). Performance-based budgeting is budgeting method is done with attention to the linkages between the output and the expected results of the activities and programs including efficiency in the achievement of outputs (Kurniawan, 2009). Halim (2007) says performance- based budget is a method of budgeting that associates each poured in funding activities with the expected results and outputs including efficiency in the achievement of results. Characteristics of the performance- based budget in the framework of the application of performance-based budget includes; based on the inputs, outputs and outcomes to be achieved, the relationship between the input with the output to be achieved, the performance targets (Asmoko, 2006). Program on performance-based budget is defined as an instrument of policy that contains one or more activities that will be implemented by government agencies. The process of drafting the budget first, and accommodate the needs of the community selection will be filled within a certain period. Performance-based budgeting requires the creation of new programs and activities and strategies to get around the limitation of resources. Nina (2009) in her research showed that the implementation of performance-based budget positive effect on performance of managerial work units of the device area. Kurniawan (2009) found in his research that the performance-based budgeting a positive effect against the performance accountability of government agencies. H1 : Performance-based budgeting a positive effect against Performance Accountability Of Government Agencies

The clarity of the budget Targets and performance accountability of government agencies The government budget is one way the implementation of management accounting that is becoming an essential tool in conducting resource allocation in the Government. Budget is a process which is implemented by public sector organizations to allocate resources to bear on the needs of the infinite (the process of allocating resources to unlimited demands) reveal the role of strategic budgeting in the wealth of a political organization (Deddi, 2008). Kenis (1979) in Robbyta (2013) and Suhartono and Solichin (2006) says the clarity of the budget target is the extent to which the objectives of the budget clearly defined and specific purposes so that the budget can be understood by the person responsible for the achievement. Locke and Lathan (1984) in Samuel (2008) States that the setting of specific goals will be more productive than not setting specific goals. The budget targets of deliberate clarity to govern the behavior of employees. The budget should be able to become a benchmark achievement of performance accountability expected, so that budget planning should be able to describe clearly the performance target. Therefore the budget targets should be expressed in clear, specific and understandable by those responsible for implementing it. The existence of the measurement of the success rate of an organization in the form of the evaluation mechanism, then it can be known for the performance of an organization (Herawaty, 2011; Abdullah, 2005). When the target clarity budget stated clearly then the performance accountability of government agencies has increased. This will encourage employees to do their best for the attainment of the desired goal, so it could have implications for increased performance. Anjarwati (2012) concluded that the clarity of the budget target of a positive effect against the performance accountability of government agencies. Kusumaningrum (2011) show that the positive effect of the budget goal clarity against the performance accountability. H2: The clarity of the budget target of a positive effect against Performance Accountability of Government Agencies

The system of reporting and performance accountability of government agencies There are three goals of the Government's financial reporting such as managerial accountability, and transparency. Accountability is defined as the attempt to account for resource management and implement policies which is entrusted to the organizational units of the Government in the framework of the achievement of the goals that have been set. Managerial means providing financial information that is useful for planning and managing the Government's finances as well as facilitating an effective control over all the assets, debt and equity funds Kusumaningrum (2012). BPKP (2000) stated that a good report is a quality that should be prepared honestly, objectively and transparently, by using the principle of liability, exclusions, comparison, accountability, and benefits. Anthony, et al (2005) reveals the characteristics of a good reporting system is a report detailing the actual achievements of variants based on factors the causes of organizational units, the annual forecasts are concerned, include a description of the preparation of systematic, cause variant, and evaluation or action taken to correct a variant which is not profitable. Reports can be compiled properly, if the accounting system used is good too, so that the required reporting systems. Mardiasmo (2002) reveals, the local government as the provider of public funds should

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be able to provide the necessary financial information accurately, timely and trustworthy. Therefore, local governments are required to have a reliable accounting accounting systems. Anjarwati (2012) concluded that the reporting system a positive effect against the performance accountability of government agencies. Indudewi (2009) discovering the existence of regional financial management systems that include a reporting system, will create a transparent financial management and accountability. H3: Reporting system a positive effect against Performance Accountability Of Government Agencies

Adherence to regulations and Performance Accountability Of Government Agencies Accounting and the relation to this law has been expressed by Soleman (2007) in his view about accounting and its surroundings, there are 8 elements in the environment affecting the accounting system of accounting, taxation, funding sources, the political and economic relations, inflation, the level of economic development, levels of education, and culture, then coupled with the influence of legal and accounting developments. Robbyta (2013) says the legal system in force in one country depends on the system that adhered to whether the concerned country adopt the Civil Law or Common Law. The legal system is rooted in the public sector in accounting is a system of civil law, where any rules associated with the public sector accounting that are loaded in the form of regulatory legislation. In Indonesia has many laws and Government regulations published to achieve good governance. Accountability cannot be effective in the absence of transparency and the rule of law that is clear, so that the development of accountability required a mechanism and a clear regulation. This indicates that adherence to the regulations of the legislation will affect the performance accountability of government agencies. Hara (2010) found that adherence to legal regulations a positive effect on the performance of government agencies. This is in line with the research Soleman (2007) and Robbyta (2013) are proving the existence of the positive influence of obedience regulations against the performance accountability of government agencies. H4 : Influential positive observance legislation against Performance Accountability Of Government Agencies

RESEARCH METHODS This research is quantitative research with testing causality variables independent of the dependent variable. The variables tested are (the dependent) performance accountability, and performance-based budgets, clarity of objectives, budget reporting system and obedience regulations (independent). Accountability is measured by indicators of accountability and honesty of law, accountability processes, accountability program, and accountability policies, with 12 grains statement. Budget-based performance measured by the indicators of the budget based on the inputs, outputs and outcomes, the relationship between the input to the output, the preparation of performance targets, with 5 round statement (Kurniawan, 2009). The clarity of the budget objectives measured by indicators of budget objectives clear and specific, understandable, transparent and accountable, as well as relevant, with item 8 statement (Robbyta, 2013; Yusmaneli, 2008). The reporting system is measured using the preparation of systematic, causes the occurrence of irregularities, evaluation or actions taken, with the 7 item Declaration (Robbyta, 2013); Yusmaneli, 2008). Obedience regulations legislation measured with 5 round statement (Robbyta, 2013). The respondents in this study were officials at agency regional office environments on the vertical of the Ministry of Justice and human rights Work in the Unit as well as Bengkulu in scope which is the city of Bengkulu. Respondents who participate are officials of the Echelon III, IV, and V consisting of a head, head of section, head of the subfields and head subsections at regional offices of the Ministry of Justice and Human Rights Unit and Work Surroundings of Bengkulu local offices. The data was analyzed using Partial Least Square approach (PLS) (Abdillah, 2015; Ghozali, 2014). First the outer model testing was done to know the validity and reliability of data. Further inner or structural models was tested to look at the relationship between invalid constructs. Hypothesis testing is done by the process of bootstrapping/resampling bootstrapping. Testing the hypothesis put forward can be seen from the magnitude value of the t-statistic.

THE RESULTS OF THE RESEARCH AND THE DISCUSSION The number of samples (respondents) in this research was as many as 56 people, consisting of Local office of Ministry of justice and human rights (23), Bengkulu Lapas Class II A Bengkulu (10), Rutan class II B Bengkulu (4), class II Bapas Bengkulu (4), Rupbasan class I Bengkulu (3), and the Immigration Office class I Bengkulu (12). Viewed from gender, 45 men and 11 women. The age of

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respondents was average from 41 to 50 years. Their education was majority of Undergraduate, Graduate and Diploma. The working time is generally in the range of 21 - 30 years. The overview of the variable research (performance-based budgets, clarity of objectives, budget reporting system, observance of regulations and performance accountability of government agencies), all of them showed greater than average from theoretical. This means that the application of performance- based budgeting had been applied, was good on the existing reporting system, the budget target planned has been clear, has the presence of adherence to laws and regulations, and the performance accountability has gone well. Regional Office of the Ministry of Justice and human rights of Bengkulu has implemented with either all indicators that are used as measuring variables descriptive statistically based on the data of the respondents.

Table 1 Descriptive Statistics Of The Variables Research Before Preliminary Swimsuit Segment Estimated Actual Estimated N Variable Std. Min Maks Mean Min Maks Mean Deviasi Performance Based 56 5 25 15 15 25 20,59 2,21 Budgeting The clarity of the budget target 56 8 40 24 19 40 31,30 5,78 The system of reporting 56 7 35 21 22 35 30,02 3,12

Adherence to regulations 56 5 25 15 14 25 22,13 2,63

Performance Accountability Of 56 12 60 36 34 58 45,77 4,98 Government Agencies

This research used a structural equation model which was analyzed by using the program SmartPLS 2.0 M3. Outer/measurement model (model of measurement) was applied to know the validity and reliability of the indicators which connects with the laten variable. The following image shows the display results of PLS Algorithm after an indicator having a loading of less than 0.70 eliminated. There are two methods used to assess the validity of the discriminant. The first method is comparing correlation indicator an invalid construct with the indicator of correlation with another invalid constructs by looking at the value of the cross between the loading indicator with its construction. The result showed that there was good discriminant validity, because the correlation value indicators against the construction of the correlation value is higher than the indicators with another invalid constructs. The second method is by looking at the value of the AVE (Average Variance Extracted) and the value of the root of the AVE for any invalid constructs with the correlation between invalid constructs with other invalid constructs in the model. A good model is required if the value for invalid constructs individualized AVE roots is greater than the value of the correlation between invalid constructs with other invalid constructs must be greater than 0.5. The results showed the value of the AVE (Average Variance Extracred) invalid constructs for performance-based budgets, clarity of objectives, budget reporting system, observance of regulations and performance accountability of government agencies have a value greater than 0.5. In addition to testing the validity of constructs, the reliability of constructs test was done as measured by composite reliability and reinforced with a Cronbach alpha of indicators that measure invalid constructs. The test results of composite reliability and cronbach alpha value have composite reliability > 0.70 and alpha cronbachs > 0.60.

Table 2 Composite Reliability dan Cronbachs Alpha Variabel Composite Reliability Cronbachs Alpha

Performance Based Budgeting 0,8652 0,7707

The clarity of the budget target 0,9739 0,9687 The system of reporting 0,8836 0,8051 Adherence to regulations 0,8387 0,7181

Performance Accountability Of Government 0,8356 0,7041 Agencies 603

The structural model was evaluated by using the R-square for the dependent invalid constructs (endogenous) and t-test as well as the significance of the structural parameters of line coefficients.

Testing against the structural model is done by looking at the value of R-square which is a test for goodness-fit model. The R-square value of 0.2822, which means that invalid constructs variability of performance accountability of government agencies can be explained by the variability of performance- based budget invalid constructs, the clarity of the budget target, reporting systems and observance of legislation of 28.22% whereas 71.78% explained by variables other than the ones examined. The second test is to see its significance by looking at the values of the parameters and values for the coefficients of the significance of the t-statistic. To assess the significance of the model prediction of the structural model in testing, can be seen from the value of the t-statistic between independent variables to the dependent variable. From the table below shows that the results of the t-statistic calculation of performance-based budgets (ABK) have no effect against the performance accountability of government agencies (AKIP) (0.7688) t-table < (1.96). The clarity of the budget target (KSA) has a positive effect against the performance accountability of government agencies (AKIP). Reporting system (SP) has a positive effect against the performance accountability of government agencies (AKIP). Obedience regulations (CHOCOLATE) has a positive effect against the performance accountability of government agencies (AKIP).

Table 3 Path Coefficient (Mean, STDEV, t-Values) Original Sample Standard Standard t-statistics t-tabel Sample Mean Deviation Error (|O/STERR) (O) (M) (STDEV) (STERR)

ABK >AKIP -0,0707 -0,0881 0,0920 0,0920 0,7688 1,96

KSA > AKIP 0,2250 0,2173 0,0674 0,0674 3,3395 1,96

SP > AKIP 0,3115 0,3173 0,0672 0,0672 4,6382 1,96 KPPU > AKIP 0,3554 0,3663 0,0902 0,0902 3,9416 1,96

The results of the study proved that performance-based budget has no effect against the performance accountability of government agencies. Implementation of performance-based budget for this in the Local Office of the Ministry of Justice and Human Rights Unit Works as well as in Bengkulu have not been able to improve the accountability of the performance of government agencies. The results

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of this study do not support Kurniawan’s study results (2009) which found that performance-based budget influence on performance accountability of government agencies. Likewise, Kurniawan (2009) said that the existence of a relationship between a performance-based budget with managerial performance Unit Working Device area. Nina (2009) that performance-based budgeting is budgeting method which is done with attention to the linkages between the output and the expected results of the activities and programs including efficiency in the achievement of those results. Bastian (2006), argued that the budget is essentially a performance based budgeting system output-oriented organizations and closely related to the vision, mission and strategic plan of the organization. Performance-based budgeting is drafting a budget based on performance planning, which consists of the programs and activities that will be implemented and performance indicators to be achieved by an entity budgets. The Government at the Regional Office of the Ministry of Justice and human rights should continue to improve the application of performance- based budget so that it is able to improve organizational performance (accountability kinerjan government agencies) The results of the study proved that the clarity of the budget goal influenced on performance accountability of government agencies. This means that the more obvious budgetary goal setting made in the budget of the Regional Office of the Ministry of Justice and human rights Work Units as well as in Bengkulu, it will also better accountability of its Government agencies ' performance. This study supports the results of research conducted by Kusumaningrum (2011), Anjarwati (2012) who found that the clarity of the budget target of a positive effect against the performance accountability of government agencies. Robbyta (2013) stated that the clarity of the budget target is the extent to which the objectives of the budget clearly defined and specific so that the budget can be understood by the man responsible for his accomplishments. The budget should be able to become a benchmark achievement of performance accountability expected, so that budget planning should be able to describe a clear performance targets. Therefore the budget targets should be expressed in clear, specific and understandable by those responsible for implementing it The research results proved the reporting system have an effect on performance accountability of government agencies proven empirically supported. Based on the results, this study showed that the better accountability reporting systems at the Regional Office of the Ministry of Justice and human rights as well as the working Unit in Bengkulu will be getting better performance accountability agencies his Government. The results of this study are consistent with research conducted by Indudewi (2009), Anjarwati (2012) who managed to prove the existence of the influence of the system of reporting against performance accountability. A good reporting system according to Anthony et al., (1989) in Robbyta (2013), is a system that specifies the actual achievements of variants, including the annual forecast, the causes of Variant (deviation) action taken to correct a Variant that is not profitable, and the time required in order for the actions of the corrections/improvements can be effective. Performance reporting is a reflection of the duty to represent and to report the performance of all activities and resources that need to be accounted for. The existence of a good reporting system should make it easier to account for the success or failure of the implementation of the tasks of the Organization in order to achieve the goals that have been set. Observance of laws and regulations have influenced the performance accountability of government agencies. The results of this research showed that the better adherence to laws-invitation in making budget and reporting at the Regional Office of the Ministry of Justice and human rights as well as the working Unit in Bengkulu will be getting better performance accountability of government agencies. The results of this study support the research of Soleman (2007) and Robbyta (2013), Sumiati (2012) who found that the observance of laws and regulations influence on performance accountability of government agencies. The obedience of the laws and regulations referred to in the preparation of the financial statements, the Government must satisfy the minimum requirements specified in the Government's accounting standards. Government accounting standards as guidelines are a staple in composing and presenting financial accountability reports should be aligned with the Government's budgetary system. Therefore, the classification of the budget in the Government's accounting standards must be the same as the classification system of budgeting. Public authorities are obliged to obey the rules of the applicable legislation. Obedience regulations will encourage fluency program so that the achievement of business

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goals or desired goal that will realize the performance accountability. The existence of the adherence to the regulations will make it easier to account for the success or failure of the implementation of the tasks of the Organization in order to achieve the objectives that have been set previously.

CONCLUSIONS, IMPLICATIONS, LIMITATIONS AND RECOMMENDATIONS The results of this study concluded that performance-based budget has no effect against the performance accountability of government agencies at the Regional Office of the Ministry of Justice and Human Rights Unit Works as well as in Bengkulu. The clarity of the budget target, reporting systems, and adherence to the laws and regulations influence the performance accountability of government agencies at the Regional Office of the Ministry of Justice and Human Rights Unit Works as well as in Bengkulu. This means that the more clear goal setting the budget, the better the existing reporting systems, and the better implementation of the legislation, it will be getting a nice performance accountability of government agencies at the Regional Office of the Ministry of Justice and human rights Work Units as well as in Bengkulu. From the results above, this study will hopefully become input for the Regional Office of the Ministry of Justice and human rights as well as the Unit Works in Bengkulu in assessing the influence of the clarity of the budget target, reporting systems and observance of legislation against the performance accountability at the Regional Office of the Ministry of Justice and human rights of Bengkulu. For officials such as heads of agencies, heads of Sections/fields and Head Subsections/Subfields in carrying out the functions, duties and responsibilities in improving the accountability of its performance that will continue to improve and to build competencies in organization by continuing to increase the accountability of the performance with improving the process of preparation of the budget, reporting systems and the application of the legislation. This research process has some limitations that require improvement and development in the next research which covers only done limited the scope of the Regional Office of the Ministry of Justice and human rights institutions does not use vertical Bengkulu. This research could be made only by means of disseminating a questionnaire and does not do interviews with respondents so that the information obtained was very limited. By the time the researchers doing the distribution, the questionnaire, questionnaire returns time in constrained because it is not exactly an election time, researchers submit the questionnaire due to the flurry of each agency. Researchers cannot prove the influence of performance- based budgets against the performance accountability of government agencies. For next study, it is better to not only research in the Regional Office of the Ministry of Justice and human rights of Bengkulu, but also involves the entire vertical agencies that exist in Bengkulu province. Using both interview and questionnaire method, the data information was obtained better, honest and insightful as well as the selection of the correct time in distributing the questionnaire.

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