Main Article Content
Abstract
This study aims to examine the influence of human resource (HR) competence on the quality of
local government financial reports, with the internal control system acting as a mediating
variable. Using a conceptual approach derived from prior empirical and theoretical studies, this
paper explores how competent human resources and effective internal control systems
contribute to the improvement of financial reporting quality in local governments. The study
emphasizes compliance theory as the underlying foundation, explaining how adherence to
regulations and standards enhances accountability and transparency in public sector financial
management. Findings from previous research suggest that HR competence positively affects
the internal control system, which in turn mediates its relationship with financial reporting
quality. This conceptual model is expected to guide future empirical research using quantitative
approaches, particularly SEM-PLS analysis, to validate the proposed hypotheses