This study aims to analyze the influence of Government Accounting Standards (SAP) and Human Resource (HR) competence on the quality of financial statements, with the Government Internal Control System (SPIP) as a mediating variable at the Ministry of Social Affairs of the Republic of Indonesia. The research employs a quantitative approach using a survey method involving 79 employees engaged in the preparation of financial statements. The research instrument was a questionnaire tested for validity and reliability. Data analysis was conducted using Structural Equation Modelling (SEM) with Partial Least Square (PLS). The results indicate that both SAP and HR competence have a significant effect on SPIP and the quality of financial statements. Furthermore, SPIP significantly influences the quality of financial statements. Another key finding is that SAP and HR competence indirectly affect the quality of financial statements through SPIP as a mediator. The coefficient of determination (R²) of 87.1% demonstrates that the developed model substantially explains the variance in financial statement quality. The managerial implications underscore the importance of enhancing HR competence, consistent SAP implementation, and strengthening SPIP to produce transparent, accountable, and high-quality financial statements in the public sector.
Hermanto et al. (Wed,) studied this question.