The Impact of Treasurer's Experience and Knowledge on The Effectiveness of the Administration and Preparation of The Accountability Reporting System in North Sumatera AJVA

ISSN 1946-052X

Aslan Journal nf lll:artce & Accou*fln$

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V*l 6, No 2 [201a]
Vol. 6, No, 2, December 2014
Tahle ofCcntents
Determinants of Readabilitv of Financial Reports of U.S.-Listed Asian Companies
Gaurav

Kumar

1-18

The lmpact of Credit Rating, Ownership and Relationships on Loan Spreads-Taiwan's
Evidence
Cheng-Li Huang, Bih-Yun Kuo
Re

19-52

at,crship between Firm Aee and Financial Leverase with Dividend Policv

Nasrollah Takhtaei
ls Temporary Trading Halt Mechanism

53-63

for New Shares on The First Dav of Trading

Conducive to Curbing Speculations?
Kai Shi, Li Nie

64-14

Disclosure Qualitv and Corporate Governance: Evidence from lran
Fatemeh Soheilyfar, Mohammad Tamimi, Mohammad Ramezan Ahmadi, Nasrollah

Takhtaei

75-86

ls Stock Price Svnchronicitv a Measure of Noise or Stock Price lnformativeness: Evidence

from Audit Pricins Model
Jim Wang

87-1.02

lntellectual Caoital Performance of lndonesian Bankine Sector: A Modified VAIC (M-VAIC)
Perspective

lhyaul Ulum, lmam Ghozali, Agus Purwanto

103-1.23

The Effective Factors in Abnormal Error of Earnings Forecast-ln Case of lran
Hamid Rasekhi, Alireza Azarberahman, Jalal Azarberahman

124-141.

Accounting Disclosure, Governance Standards and lnnovation Activities in Emerging
Markets
Zhenxiang Chen, Ming Li, Liang Song, Yanan Xing, Zhaoguo Zhang

1.42-1.51

Does Shariah Compliant Stocks Perform Better than the Conventional Stocks? A

Comparative Studv Stocks Listed on the Australian Stock Exchanee
Krishna Reddy KR, Mingli Fu

155-170

Arfima-Figarch vs. Arfima-Hvgarch: Case Studv ETF Returns of Emergine Asian Countries
Truong Hongngoc

t7l-Lgd

Changing Bank Income Structure: Evidence from Large UK Banks?

Kalsoom Jaffar, Kumbirai Mabwe, Robert Webb

1t)5-215

The Comoliance of Methods of lmplementation of IFRS: Studv of the lmpact on the
Releva nce of Accounti ng lnformation

Mohamed Rachid Ouezzani, Youssef Alami
The Availabilitv, Extent and Qualitv of Sustainabilitv Reportine bv Malavsian Listec Frrrns:
Subsequent to Mandatorv Disclosure
Hafizah Abd-Mutalib, Che Zuriana Muhammad Jamil, Wan Nordin Wan-Hussin

239-2ffi

Tendencv to Choose Bis Audit Firms: Case of lndonesia
Putu Agus Ardiana

2.6t-277

Proiect Financial Management and Modern Financial Slaverv: The Case of a KSA Metro
Proiect Start-up
PaulJames

278-300

The lmpact of Treasurer's Experience And Knowledge on The Effectiveness of The
Administration and Preparation of The Accountabilitv Reporting Svstem in North Sumatera
Azhar Maksum, Rustam Hamid, lskandar Muda

30 1-3 18

Real Estate lnvestment in Bangladesh: A Pre Liminarv Studv

Naheem Mahtab, Maqbool Kader Quraishi

319-342

Valuing the First Negotiated Repurchase of the TARP Warrants
Linus Theodore Wilson

343-350

Coroorate Social Responsibilitv and Financial Performance: A Case Studv of Jamuna Bank

Limited, Baneladesh
Mohammad Mazibar Rahman, Md Mamunar Rashid, Md Reiazul Haque

35 1-361

Corporate Governance and Financial Performance of Bank in Asian Regions and
Recommendations
Ping-fu Lai, On-na CHOI

3lt-406

Evaluation of Return Mean and Stock Surplus Return Mean with Two Approaches of
Traditional Risk and Downside Risk
Ebrahim Abbasi, Hanieh Sadat Hoseini, Amir Mohammadzadeh

407-427

Determinants of Disclosure Qualitv: Empirical Evidence from lran
Nasrollah Takhtaei, Zahra Mousavi, Mohammad Tamimi, lman Farahbakhsh

422-438

Efficiencv of Foreien Banks Operatins in lndia: DEA Analvsis

Namita Rajput, Kamna Chopra, Shelly Oberoi

439-450

Editorial Team

ilrii{*r-in-{kief

L. Dr Guneratne Wickremasinghe.
il d it* ri rs.l.4 rfr:ls*r

1.
2.
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5.
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7.
8.
9.

Professor
Professor
Professor
Professor
Professor

y

Victoria University, Australia

li * mrd

Antonio Divila, University of Navarra, Spain
Colin Clark, Victoria University, Australia
David Power, University of Dundee, United Kingdom
GarV O'Donovan, University of Tasmania, Australia
Hassan Tehranian, Boston College, United States

Professor Hiroshi Okano, Osaka University, Japan
Professor Kashi Balachandran. New York University, United States
Professor Ken Peasnell, Lancaster University, United Kingdom
Professor Kishore Tandon, City University of New York, United States
10. Professor Vihang Errunza, McGill University, Canada

Edit*ri*t $*srd

L.
2.
3.
4.
5.
6.
7.
8.
9.

Associate Professor Bisman Jayne, Charles Sturt University, Australia
Associate Professor Chun Yip Desmondv Yuen. Unversity of Macau, China
Associate Professor Darren Henry, LaTrobe University, Australia
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L0. Dr Abevratna Gunasekarage, Monash University, Australia
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l-2. Dr Bruce Burton, University of Dundee, United Kingdom
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l-8. Professor Bahram Adransi, University of Portland, United States
19. A/Prof Christopher Stephen Wrieht, University of Adelaide, Australia
20. Professor Hector Perera, Macquarie University, Australia
21. Professor Huev-Lian Sun, Morgan State University, United States
22. Professor Julie Cotter, University of Southern Queensland
23. Professor Marc Deloof. University of Antwerp, Belgium
24. Professor Milind Sathve, University of Canberra, Australia
25. Professor Minga Negash, University of Witwaterstrand, South Africa
26. Professor Pacha Malvadri. Principal Government Degree College, Osmania University lNDlA,
lndia
27. Professor Prem LalJoshi, University of Bahrain, Bahrain
28. DrTerri Trireksani. Murdoch University, Australia

Panel af reviewers

3.

Dr. Gaurav Kumar, University of Arkansas at Little Rock, United States
Bassem Salhi, University of Sfax, Tunisia
Bahaaeddin Ahmed Alareeni. The University College of Applied Sciences (UCAS), Palestinian

4.
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7,
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Territory, Occupied
Li Cai, lllinois lnstitute of Technology, United States
Marco Mele, LUSPIO University, ltaly
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Professor Olivier Colot, UMONS, Belgium
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Editorial Assfsfonf

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Mr Pandula Gamage. Victoria University, Australia

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,/
Asian Journal of Finance & Accounting

*tlHr,fi,lT*'*

ISSN 1946-052X
2014, Vol. 6, No. 2

The Impact of Treasurer's Experience And Knowledge
on The Effectiveness of The Administration and
Preparation of The Accountability Reporting System in

North Sumatera
Azhar Maksum+, Rustam Hamid,

& Iskandar Muda

Faculty of Economics and Business, University of North Sumatera
Jl. Dr. T.Mansur, No.9, Kampus USU, Medan, 20155,North Sumatera, Indonesia
x

Received: Sep.

Corre sponding Author, E-mail : azhar. maksum@yahoo. com

22,2013

Accepted: Oct.

29,2014

Published: December L,2014

doi:l0.52961ajfa.v6t2.6341 URL: http://dx.doi.orgl10.5296lajfa.v6i2.634l

Abstract
This study aims to determine the role of treasurer's experience and knowledge on Permendagri
(Minister Regulation) No. 55i2008 to create the effectiveness of administration and
preparation of the accountability reporting system. This study is an explanatory survey using
primary data. The scope of the study includes the new expanded regional governments, namely;
the districts of Batubara, Padang Lawas, South Labuhan Batu and North Labuhan Batu. The
effectiveness of the administration and preparation of the accountability reporting system is
used as a dependent variable and both treasureL's experience and knowledge ale the
independent variables. The study population comprises of 310 people where 115 people are
selected as the sample using the purposive random sampling method. The study founds that the
experience variable does not affect the effectiveness of the administration and preparation of
the accountability reporting system; meanwhile, the knowledge variable has an effect on the
effectiveness of the administration and preparation of the accountability reporting system.

Keywords: Effectiveness of the administration and preparation of the accountabililv
reporting system, Experience and knowledge.

301

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Introduction

The efforts to improve the presentation of the regional financial report's submrssion are
increasingly being discussed. This is related to the importance of the govemance reform, thus
the effolts towards achieving good governance and authontatir.e have continously been
emphasized. Unfortunately, the effolts to leform the financial reportinu plesentation seems to
not lrave been fully itnplemented yet by the regional gor ernments as u'e1l as tite task force units
within the regional government. A change in thc rcgional government's accountine approach
of single entry into double entry is a fair11' rer.ohrtionarv chan-se On the other hand. the
publication of ltnancial statements by re-eionai so\-emltlents tltronsit ne\\'spapers or the
Intemet does not seern to be a common thing for most regrons.
The government realizes this matter, including the efforts made bv issuing the regr-rlation of the
Ministry of the Internal Affairs, especially related to treasury and governance administration. It

is marked by the creation of Permendagri No.5512008 on the procedures of

treasurer's

administration and accountability report preparation. All the treasllrers (concentrating on
receipts and spending) are at the fbrefi'ont of the implementation of this regulation. A treasurer
of task force units rvhich are based on the current regulation is obliged to submit the financial
reports 2 months upon the year-end closing of accounts. If the performance is good, then the
regional goverrrment treasurers' efforts to obtain the opinion of financial statements by the
audit board with qualified predicate are not difficult to realize.It is necessary to study the main
obstacle of not achieving the qualifled predicate from several new expanded districts. Thus,
this study is intended to look at the eff-ectiveness of the adminisration and the preparation of the
accountability reporting system of regional task force units.

A study by Avazzadehfath et al. (2011)

states that the skilled human resources constitute an

important factor for an organization. A lot of organizations are alu,ays seeking to improve the
efficiency of the organizations by sending their employees for training. on a given cost. Their
study in Iran has found that the existing system especially for the organizatron's accounting
infbrmation system related to the activities of the human resource cycle, will process the data
and convert them into practical information. It also finds that the investment decisions are
influenced by the presence of the human resource accounting cycle and disclosed in the
financial statements. Thus, this concludes that the human resource accounting system which is
integrated with the financial reporting cycle contributes to the production of relevant decisions
contained in effective reports.

Meanwhile, the flndings by Meytl et al. (2013) which examine the fiscal management
perspective based on Permendagri No. 5912007 in the financial mana-qement board and the
regional asset in Sorong city have concluded that the processes of planning, preparation,
implementation, administration, reporting and accountability of budgets in Sorong city have
not been fully carried out in accordance with the regulations because of the fact that some
changes in the new regulations have not been implemented where they still refer to the old
regulation of Permendagri No. 1312006. This constraint occurs due to the lack of human
resources that are reliable and competent in their fields as well as the fact that changes in the
regulations have rnade the financial management cycle failed to run the way it should.

u,'rvu,. m aclothin k. org/aj fa

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Asian Journal of Finance & Accounting

ISSN 1946-052X
2014, YoI. 6, No. 2

Kengatharan and Keng atharan
Qo14) state that human behavior in the aspects
r:ld
nerd is based o, ,r,. aspect of psychorosy,
in which it
lhis
tries to understand the emotions
and cognitive e*ors rh"t
In this context, the behavior becomes -an
integral part of the decision, because
it affects the
performance

orr.r*ffi

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execution. Moreover, Pangkong
ut. lzor:) examine the factors that
affect the
ability of the regional govemment's
"t
f,rirancial statements iu Biak Numfor
district of papua
Ptovince. The study pl0ves that partia\, the human resource qualrty affects the
ability to
prepare the regional government's financial statements in Numfor Biak while the variables of
regulatory understanding, commitment and set of supports have no effect.

Next, Kim (2005) examines the individual-level factors and organizatronal performance of
gover.rrment oganrzattons in Korea. He explains that the achievement of public sector
organizations is determined by their perfolmance on the individuals, thereby providing
effective accountability reports. The effectiveness is detennined by demographic variables
such as age, work experience, gender, education level and occupation of personnel, whereby al1

of these factors significantly influence the performance of individuals in Korea. Given the
arguments above, this study aims to analyze the extent of experience and knowledge of task
force units' treasurers on the Permendagri No55/2008 towards the effectiveness on the
administration and preparation of the accountability reporting system in the North Sumatera
province.
2.
2.

Literature Review

l.

Theoretical Review

2.1.1. The Theory of Goal Setting
The theory of goal setting is part of the motivation theory proposed by Edwin Locke in the late

(Melati,20ll) in Wibowo (2013). This theory asserts that an individual's intention to
achieve a goal is a major source of work motivation. An individual with a difficult, more
specific and challenging goal will result in higher performance than those with vague
1960s

objectives such as easy goals that have no specification or purpose at all (Melati,2011). Locke
(1990) in Melati (2011) reveals that there are two categories of actions which are directed b1,
goals, namely: (a) non-conscious directed goal (b) conscious directed goal or purposeful
actions. The underlying premise of this theory is the second category of conscious goal, where
it unravels the useful ideas to encourage individuals to act (Latham, 2004 in Melati, 2011).
Meanwhile, a theory of goal setting assumes that there is a direct relationship between the
definition of specific objectives and measurable performance; if the person (managers/officers)

know what would exactly be the objectives that they need to achieve, then they rvill be more
motivated to exert efforts that can improve their performance (Locke & Latham, 2002 in Melati.
2011). The aim of having a challenge is usually implemented in the output, with a specific leve1
to be achieved (Locke &Latham,1990 in Wibowo (2013).
2.1.2. The Achievement Motivation Theory

According to Samsudin (2005) in Haryanto (2013), motivation sen'es 3S 3 pru'iC3ss in3;
influences or as an extemal push against a person or working group that makes him s'anl I.-'

Macrothink
tf
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Asian Journal of Finance & Accounting

ISSN 1946-052X
2014, Yol. 6, No. 2

implement something which has been set. Motivation is a condition or energy that drives
employees' self-directed state that will lead them to achieve organizational goals. Meanwhile,
Siegel and Marconi (1989), Carlos (2013) in Wibowo (2013) mention that a motivation is the
key to start, control, maintain and direct the behaviors. It is also regarded as a driving force of
one's heart, which means that he has the willingness to obtain the success and achieve the goals.
Moreover, Robbins and, Iudge Q.001), Carlos G013) in Wibowo Q013) have posited that the
motivation is a process that describes the intensity, direction and persistence of an individual to
achieve his goal. On the other hand, general motivation is associated with any effort to achieve
t?egOa/ 2?e firee aaza elerzzezZrztz /hzsde2zz?zbzz azt: l)ze)z/ezsztj; d)rez:/)z>zs a:zzlpezezs/ezce
related to the extent of how hard one works, or attempts at something. A high intensity to
produce satisfactory work performance should be associated with a favorable direction.
Persistence is a measure of how long a person can maintain his business.

2.1.3. Cltaracteristics of Administration Infbrrnation Quality and Financial Accountability
Report

The characteristics of the Accounting Information System comprise of elements as follows
(Hall.2OO7\:
1- Relevant- lfhis refers to the infomation
that needs to t>e known to deliver new insights'I-he reports that are ursed temporarily
and are later on itrelewant are to be eliminated-

2.

The right time. The age of information is a critical factor in determining its usefulness.
Information should not be older than the period of time that it enables the action to be
supported.

3.

Accurate. Information should be free of errors that is material by nature. The material
effors occur when the amount of information is inaccurate, thus the decision makers tend to
make poor decisions or fail to make necessary decisions.

4.

Completeness. There is no part of information that is essentially needed in decision
making or the execution of a task is missing. Incomplete information can cause difficulties and
has an impact to a great element of uncertainty.

5.

Summary. Information must be aggregated to flrt the user's needs. Concise information and
the summary of relevant data show deviations from the areas of the normal level, which is
standard or planned as a form of information that is much needed by the users.

2.I.4. Experience

An experience refers to the administration and repofiing accountability both in terms of the
length of time, the number of assignments as well as the kinds of tasks that are handled
(Nilawati, 2009). Another definition states that an experience is a learning process and an
extension of the potential development of behaviors in both formal and non-formal education
or could be defined as a process that brings a person to a pattern of higher behavior. According

to Nilawati (2009), the length of treasurer's service and experience in holding a position will
render them acknowledged as a person who is responsible for the basic activities in the

304

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Asian Journal of Finance & Accounting
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2014, Vol. 6, No.

2

organization's daily operations. The longer duration that the treasurers are holding the position,
the better their work performance.
2.1.5. The Knowledge of Permendagri (Ministry of Internal

Affair's Regulation) No. 55/2008

In relation to the adminishation and accountability reporting system aligned with the orderly
adminiskation and accountability of the budget implementation, it needs to prepare and submit
the administration procedures and accountability reports for the treasurers. The regulation of
the Ministry of the Internal Affairs No.55/2008 is a refinement of the regulation of the Ministry
of Internal Affairs No.1312006 on the regional financial management guidelines. This
Permendagri was launched in order to control everything related to treasury with the
expectations to achieve goals. The regulation will then bring improvement to the regional
govemance policy and its financial management.
According to Halim QADT in Pangkong et al. (2013), the government accounting standards
(SAP) work as a guideline for the preparation and reporting of budget realization, to both
central and regional govemments, with the goal of uniformify, synchronization and
harmontzation of all kinds of reports. Based on the govemment regulation No. 58/2005 on the
regional financial maflagement, the regional government has the authority to develop policies
and procedures for the accounting and financial matragement system in accordance with the
regional government's accounting standards. Above all, the regional government may
prepare its financial statements in the form of the budget rcalizationreport, balance sheet, cash
flow statement and notes to the financial statements in accordance with the government
accounting standards, accounting policies and financial management systems and procedures,
so as to produce transparent and accountable financial statements (Halim et a1., 2010). The
regulation that relates to the treasury mentioned rnust at least be understood by those who carry
it out.
2.2. Review of Previous Research
The matric results of the previous studies are related to the topic of this research as illustrated in

Table 1. below:

305

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A&l]|Miffititule*
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AsianJournalofFinance&Accounting

2',t'il"'l',i'l:':

*
Author/Year

Title

Variables

Findings of Research

The submission activity of spendi4

in Cetrd
region is not ruDd4

accountability report
Lampung

accordingly based on the applicablc
regulations and has frequent

conducted descriptively

Th
possible constraints are due to; (i) tb
presence of policy in spendi
accountability activities in Cerd

not using the dependent

Lampung is considered inappropri-

and depcndent valiables.

and inconsistent with Permen@ri
1312006, and (ii) the lack of ability c
task force units in these activities,

inaccuracy

A study on delay of Spending

Nilawati,

Ivon

(200e)

Accountability Report Delay

by the task force units
(SKPD) in Central Lampung
of 2008.

The

research

is

in it's

timi=

submission.

d
human resources and lack d
socialization and training about r-

among others, due to the low qualiry

rules

of the

spending accouatatil?

activities in Central Lampung

regil-

Case studies related to

of the Cash

Muda,

lmplementation

Iskandar.,

Revenue System;

Rasdianto, &

Study in

Muhammad

Governrnent

Safi'i

Lubis.

{20t4)

A Case
the Local

regional

financial

management

will

easy, fast and accurate

when its computerized

Task Forces'
with the help of
Units of North Sumatera

regional

Province, Indonesia

be

the

financial

management application

With a reliable IT support, then

L

rules of financial accountability to be e

contributing factor to rcaltze ft
adequacy of disclosure and can crEthe effectiveness of internal cortl
systelns.

software.

Budget Ceiling,

of
assets,
amount

An Analysis of

Factors

the

spending,
education,

Affecting The Reconciliation

experience, training,

Wibowo, Dedye

Timeliness on SAI Data by

number of repairs, up to

Priyo (2013)

the Task Force Units (A date applications of
Study in the Task Force Units

Authorized

in Malang Treasury Office)

Accounting Systems

Budget

*-

The forrned factors, thus a pane.
analysis

that the human :i: --.
capaciry significantly affe:: rresulted

timeliness of SAI data reconcili:: , -

(SAKPA) and the use of
electronic reconciliation.

Rahman, Aulia
et al. (2012)

anJ

The Effect of Competence,

Competence, Training

Competence, training

Training and

Agency

and Agency Accounting

agencies' accounting j'. :': -

Accounting System

on

Systems and Quality on

simultaneously affect the qu:.::',

the

306

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Asian Journal of Finance & Accounting
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l&&ffifr'r",'*[''**
Quality of

2014, Vol. 6, No. 2

Financial

Reporting Accountability on

Deconcentration

of financial reporting accountability

Financial Statements

deconcentration on the task force units

Fund (A

Study on Task Force Units

of

Aceh Government

in

Managing

Accountability

of Aceh Governrnent.

Decorrcentration

Funds)

Aliyah, Siti

Aida
(2012)

and

Nahar

The Influence of Regional
Financial Statements and
Accessibility of Regional
Financial Statements on
Transparency and

Financial

of the regional financial

Presentation of Regional

statements

has a positive and

Financial

significant effect on the accountability

Statements

(X1) and Accessibility

of Regional Financial
Report (X2) and
Transparency

Management

Accountability

Presentation

in

regency

Jepara

and

reports that can

be rcad and

understood. Presentation of a complete

in

accordance

with the standard

acconnting

financial statements

Management

administration and easily accessible to

Accountability of

all

Regional Financial (Y)

controi and supervise the financial

respective parties

is

enable to

management appropriately.

2.

3. Conceptual Framework

The conceptual framework of this stridy is formulated as follows:

Treasurer's
Experience

The effectiveness of

[xr)

administation and
preparation accountability
reporting system of
regional task force uniB (Y)

Treasurer's Knowledge
1xr)

Figure 1. Conceptual Framework
2.4. Hypothesis
The hypothesis of this study is established as follows:

1.

The experience and knowledge of task force units' treasurers on Permendagri No.55/2008

affect the effectiveness of the administration and preparation of the accountabilify reporting
system.

2.

The administration and accountability report system in accordance with Permendagri
No.55/2008 has effectively been done or otherwise.

307

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Macrothink

Asian Journal of Finance & Accounting
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2014, YoI. 6, No.

2

3. Methodology
This study uses an explanatory, survey-type of research that aims to explain a relationnship of a
phenomenon using primary data. Meanwhile, the collection of data uses questionnaires that
consist of, a numbel of demographic variables and other questions related to the researches'
variables. Meanr.vhile, the population of this study has included all the tleasurers (r'eceipt and
spending) on the ne\v expanded regional governments, narnely: Batr-r Bara, Padang Lawas,
South Labuhan Batu and North Labuhan Batu districts in which, as many as 168 people with a
sample of 115 people had been derived from the purposive random sampling.

j.l

Operational of Definitions and Measurement

o.f

Research Variables

The variables consist of independent variables and dependent variable which are defined in the
following table:
Table 2. Operational of Definitions and Measurement of Variables
Variable

Operational of Definitions

Measurement

Scale

Dependent

The eflectiveness of Accuracy and relevancy of a. Effectiveness of financial statements
administration and presentation of the treasurer's prepared by the task force units onsists of
preparation accountabi I iry

accountability fol the task force

reporting system of units'

financial statements

and

regional task lolce units

support of regional govemment

(Y)

financial statements.

Interval

budget realization repofi, balance sheet
and notes to financial statements.

b.
c.
d.
e.
f.

Relevancy in receipts and spending.

Timely receipts and spending
Accurate receipts and spending
Cornplete receipts and spending.
The task force units' financial

statements prepared not later than 2

months after the fiscal year ends and

regional govemment financial reports
prepared at least 3 (three) months after
the fiscal year ends.

Independent Variable
Experience

(X,)

Experience of Treasurer's Tenlrre

of Service.

-

Formal and Non-formal Education

Inten:.

Tenure of Service

Socialization, Training and

Workshop
Treasurer's Knowledge

Knowledge and understandrng of

-

(Xr)

the treasurer on accountabiliry

System

system according Permendagri

-

No.55/2008

Adrninistrative Accountability

lnler ,

FunctionalResponsibilty
Preparation Accountability Report

Systen-r

308

Recording of Cash Receipts and
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Spendings System

-

The Cash Receipts and Spendings

Through Treasurer Bank Account
System

-

The Cash Receipts and Spendings

Through Treasurer's Receipts Bank

Account of Cash General Regional
System

-

The Receipts Through Cash Account

of General Regional System

-

The Receipt of Cash Deposit System

3.2 Hypothesis Test
To test the proposed hypothesis, the multiple regression test with a mathematical form works as

follows:

\/

-'l

*b1X1t

bzXz

*e

Where:

Y
Xr
Xz
a
b
e

:
:
:
:
:
:

The effectiveness of administration and preparation accountability reporting system

Experience

Knowledge and Understanding
Constant
Regression Coefficient

Error

The confirmatory factor analysis for the indicator model will generate a coefficient called the
loading standard or lambda value (),). The lambda values are used to assess the appropriateness
of the instruments in the form of a factor. Meanwhile, the analysis using SEM WarpPLS
requires several fit indices to measure the accuracy of the proposed model. There are some

suitabilify indices and the cut-off values in testing the acceptance or rejection of a model
(feasibility test model) among others; the effect size, output combined loadings and cross
loadings, output pattern loading and cross loading, output indicator weight, output latent
variable coefficient, Q squared (Stoner-Geisser coefficient), full collinearity test, output
correlations among latent variables, output block VIF, Output correlation among indicators and
output indirect and total effect if needed (Kock, 2013).
4. Findings and Discussion
4.1 Description of Data
There were 1 15 questionnaires distributed to respondents in Batubara district (20 respondents),

Padang Lawas district (25 respondents), South Labuhan Batu district (32 respondents), and
309

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2

North Labuhan Batu district (27 respondents). The detail of this distribution is illustrated in the
following Table:
Table 3. Distribution of Questionnaires

Particular

Total

Percentage

Distributed Questionnaires

115

100%

Returned Questionnaires

93

80.87%

Unreturned Questionnaires

22

t9.t3%

Questionnaires Analysized in the Research

93

80.87%

Source: Data Output (2014)
4.2 Analysis on the Test of Qualitative Data

4.2.1Yalidity Test

From the 142 distributed questionnaires, the output's combined loadings and cross
loading are used as the indicators of the convergent validity, which is part of the
measurement model in SEM-PLS (Kock, 2013). The output is expected to show the
constructs on the column and the indicators on the row which have obtained the results
follows:

310

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Table 4. Output Combined Loadings and Cross-Loading

T;",;;J:-d<

***:F*******

****

*****

X2 ESPPL_Y SE P value VIF
Pl 0.000 0.000
0.000 0.074