Presidential Regulation number 29 of 2014 concerning the Accountability System for Government Agencies. Specifically, this regulation regulates how government institutions report their performance in accordance with the provisions of applicable laws and regulations. The results of the BPK examination in the Summary of Examination Results for Semester 1 in 2022, Jember district is one of the regional governments that received an unqualified opinion (WTP). The Jember district government succeeded in obtaining the WTP opinion title for regional government financial reports from the East Java BPK. However, there are still several findings that must be followed up by each regional organization (OPD). In 2022, the BPK found that there was a volume shortage and delays in physical project work. Apart from that, the BPK found that regional asset management was still not optimal and recording of regional assets had not been carried out systematically. Several BPK findings illustrate that there are several factors that influence the quality of regional government financial reporting.

Theory Stewardship

Theory Stewardship assumes a strong relationship between organizational success and owner satisfaction. Steward will protect and maximize the organizations wealth with the Company's performance. Thus, the utility function will be maximized. Important assumptions of stewardship the manager aligns the goals with the owner's goals. However, that doesn't mean it staward not having the necessities of life [1].

Agency Theory

Agency theory, if implemented in the public sector, is the relationship between the government as agent and society as principal [2]. Where the principal is the party who makes decisions and gives trust to another party (agent), to carry out all activities on behalf of the principal.

Attribution Theory

Fritz Heider [3] defined attribution theory as a theory that explains a person's behavior. This theory explains the process of how a person explains the causes of the behavior of others or themselves which will be determined whether it is internal or external which can influence individual behavior [4].

Human Resources Competency

Human resource competency is a person's ability to carry out their functions and authority in an organization by providing education, training and experience to achieve organizational goals [5].

Internal control of asset management

Based on Government Regulation Number 60 of 2008, the government's internal control system is an integral process of actions and activities carried out continuously by management and all employees to provide adequate confidence in achieving organizational goals through effective, efficient activities and reliable financial reporting. , safeguarding state assets, compliance with applicable laws and regulations. 

Asset management effectiveness

In the sense of achieving predetermined goals or objectives. Effectiveness is a measurement of where a target has been achieved in accordance with what was planned [6]. [7] States that effectiveness is the relationship between output and the goals or targets that must be achieved. The application of asset management concepts has been proven to provide positive results and generate significant profits for private sector companies [8].

Hypothesis

• The influence of human resource competency on the effectiveness of fixed asset management In stewardship theory, Regional Government as steward is seen as an institution that can be trusted to act in the public interest, by carrying out the duties and functions entrusted to it. Mita Arlini et al [9] stated that human resources must have knowledge, good skills in implementing asset management, public accountability, monitoring and evaluation, and the effectiveness of asset management to achieve good asset reports. The hypothesis proposed is H1: Human resource competency influences the effectiveness of asset management

• The influence of internal control of fixed assets on the effectiveness of fixed asset management Theory stewardship illustrates the existence of a strong relationship between satisfaction and organizational success. The government as steward given trust by the community as principal in managing resources to achieve organizational goals. Astini's research suggests that the internal control system has a significant effect on the effectiveness of fixed asset management. Based on the explanation above, the hypothesis proposed is: H2: Internal control influences the effectiveness of fixed asset management

• The influence of human resource competency on the quality of fixed asset report. Human resource competency is a person's ability to carry out their functions and authority in an organization by using education, training and experience to achieve organizational goals [5]. Research by Bawono et al., [10] states that human resource competence has a positive effect on the quality of financial reporting information. Based on the explanation above, the hypothesis that can be taken. H3: Human resource competency influences the quality of financial reports

• The influence of internal control of fixed assets on the quality of fixed asset reports The agency policy explains that the government's internal control system is used as a control tool to avoid agency conflicts due to information asymmetry between the government (agent) and the public (principal). Research by Setyaningsih et al., [11] states that the government's internal control system has a positive effect on the quality of financial reporting. H4: Internal control influences the quality of financial reports

• The influence of the effectiveness of fixed asset management on the quality of fixed asset report Minister of Home Affairs Regulation No. 19 of 2016 concerning Guidelines for Management of Regional Property states that management of regional property is a total activity which includes needs planning and budgeting. Research by Zainal [12], and Anshari et al. prove that there is a positive and significant influence of asset management effectiveness on financial reports. H5: The effectiveness of asset management influences the quality of financial reports

Research methodology

Types of research: The type of research is quantitative, explanatory research is a research method that aims to explain the position of the variables studied and the influence between one variable and another [1].

Research Population and Sample

Populations can be subjects or objects. The population in this study was the Jember Regency Government BPKAD employees totaling 65 BPKAD employees. The sampling method used in this research is the saturated sample method.

Figure 1: Theoretical Model Showing the Relationship between Variables

Figure 2: Structural Model of the Influence of Human Resource Competence and Management Control on Report Quality through Management Effectiveness

Source: Output Smart PLS 3.2.9, 2023

Table 1: HR Competency Validity Results

Table 2: Management Control Validity Result

Source: Output Smart PLS 3.2.9, 2023

Data and data sources

The primary data source in this research was obtained directly from Jember Regency BPKAD employee respondents.

Data analysis technique

The data analysis method used in research in this study is Smart PLS software.

Measurement Model or Outer Model

Validity test: The validity test is used to assess whether a questionnaire is valid or not. A questionnaire is said to be valid if the questionnaire questions are able to reveal something that is measured by the questionnaire.

• Convergent Validity 

• Discriminant Validity

Reliability Test

Structural Model or Inner model: Inner models (inner relations, structural models and substantive theory) describe the relationship between latent variables based on substantive theory.

Hypothesis test

Hypothesis testing uses full model structural equation modeling (SEM) analysis with smart PLS.

Result and Discussion

General description: Profile of Regional Financial and Asset Management Agency: Based on Jember Regent Regulation Number 56 of 2012, the Jember Regency Financial Management Agency is one of the elements of the Regional Work Unit (Skpd) of the Jember Regency Government which is responsible for Regency Government Affairs, both mandatory and optional.

The image above is the result of the indicator scheme used in this research. To test the validity it must be above 0.7. However, for research that is still in the development stage, 0.6 – 0.7 can still be used to measure validity tests. So the outer loading which has a value of 0.6 -0.7 must be removed from the test.

Validity test

Test the validity of HR Competencies Based on the table above, the indicator variables are valid because al loadings are>0.7 and the AVE value is above>0.5 Based on the results loading factor, average inflation factor (AVE), and criteria fornell larcker criterion that have met the requirements, it can be concluded that all latent variables have met the validity test.

Based on table 4.12 above, the test results show that composite reliability and Cronbach alpha all variables have met a value of>0.7. So it can be concluded that the meter used in this research has met the reliability test.

Based on the table above, it can be seen that the R Square value of the management effectiveness variable is 0.487. The results of these values indicate that the exogenous variables of human resource competence, internal control simultaneously and together have an effect on management effectiveness by 48.7%. The remaining 51.3% is influenced by other variables outside this research. Meanwhile, the R Square value of the financial report quality variable is 0.572. The results of these values indicate that the exogenous variables of human resource competence and internal control simultaneously and together have an effect on the quality of financial reports by 57.2%. The remaining 42.8% is influenced by other variables outside this research.

The indirect effect of human resource competency on the quality of financial reports through management effectiveness is 0.055. The value obtained in the first stage was 1.151 and the value obtained in the second stage was 1.026. So the conclusion obtained is that the variable quality of financial reporting full mediation the influence of human resource competency on the quality of financial reports.         

The indirect effect of internal control on the quality of financial reports through the effectiveness of asset management is 0.124. The value obtained in the first stage was 2,519 and the value obtained in the second stage was 1,423. So the conclusion obtained is that the variable quality of financial reports full mediation the influence of internal control on the effectiveness of asset management 

H1: The Influence of Human Resource Competency on Management Effectiveness

The test results on the human resource competency variable on the quality of financial reports obtained a t-statistic value of 1.151 and a p-value of 0.250. 

Table 3: Asset Report Quality Validity Test Result

Source: Output Smart PLS 3.2.9, 2023

Table 4: Validity Test Results of Asset Management Effectiveness

Table 5: Loading Factor and AVE

Source: Output Smart PLS 3.2.9, 2023

Table 6: Fornell Larcker Criterion

Source: Output Smart PLS 3.2.9, 2023

Table 7: Reability Test Result

Source: Output Smart PLS 3.2.9, 2023

Table 8: Determination Test Result

Source: Output Smart PLS 3.2.9, 2023

The research results show that human resource competency has no effect on the quality of financial reports. This shows that it is felt that the existing human resource competency at BPKAD Jember Regency has not been able to improve fixed asset management. The results of this study do not support the theory stewardship which states that the existence of regional government as an institution that can be trusted to accommodate public appreciation, can provide good services to the public, is able to make financial accountability entrusted to it, so that economic goals are met and prosperity is achieved. Based on the research   results, it is stated that human resource competency does not influence the effectiveness of fixed asset management at BPKAD Jember Regency. This means that local government as steward not optimal in managing human resources as the most important component in regional asset management. Apart from that, the results of this study do not support the research conducted [13-17] which shows that HR competency influences the effectiveness of fixed asset management. However, this research is in line with research [18-20].

Table 9: Model Fit

Source: Output Smart PLS 3.2.9, 2023

Table 10: Hypothesis testing

Table 11: Keismpulan Hipotesis

Source: Output Smart PLS 3.2.9, 2023

Table 12: Specific Indirect Effect Result

Source: Output Smart PLS 3.2.9, 2023

H2: The influence of internal control on management effectiveness 

The test results on the human resource competency variable on the quality of financial reports obtained a t-statistic value of 2.519 and a p-value of 0.012. The second hypothesis states that internal control influences the effectiveness of fixed asset management. The test results show that internal control influences the effectiveness of Jember Regency's fixed asset management. The results of this test prove that the existence of an adequate internal control system will be followed by an increase in the quality of effectiveness of fixed asset management. The results of this study support the theoretical assumptions stewardship which states that all government actions as steward not motivated by individual goals but rather aimed at their main target, namely for the benefit of the organization and service to society. This research supports previous research conducted by [21-25] which proves that the internal control system influences the effectiveness of asset management.

H3: The Influence of Human Resource Competency on the Quality of Financial Reports

The test results on internal control variables on the quality of financial reports obtained a t-statistic value of 3.393 and a p-value of 0.000. The research results show that human resource competency has a significant effect on the quality of financial reports. The results of this research show that human resource competency influences the quality of financial reports, because employees who have abilities in their fields can complete the work well, so this will have implications for improving the quality of the regional government financial reports produced. This is also supported by previous research, namely research by Syintia S. with research results showing that human resource competency has an influence on the quality of financial reports.

H4: The Effect of Internal Control on the Quality of Financial Reports

The test results on internal control variables on the quality of financial reports obtained a t-statistic value of 1.972 and a p-value of 0.016. The research results show that the internal control system has a significant effect on the quality of financial reports. The results of this research are in line with previous research findings which state that the internal control system can influence the quality of financial reports. The findings of this research support agency theory, where the government's internal control system can be used to prevent the emergence of agency conflicts between the government and society due to information asymmetry so that internal control is needed.

H5: Influence of management effectiveness on the quality of financial reports

The test results on internal control variables on the quality of financial reports obtained a t-statistic value of 2.221 and a p-value of 0.026. The research results show that management effectiveness has a significant effect on the quality of financial reports. In this case, it is supported by research [27] where the research results show that management effectiveness variables have an accurate effect on the quality of financial reports. And research conducted by with research results showing that the level of effectiveness in the Denpasar city government has a significant effect on the quality of financial reports

The Influence of Human Resource Competency on Management Effectiveness

The test results on the human resource competency variable on the quality of financial reports obtained a t-statistic value of 1.151 and a p-value of 0.250. The research results show that human resource competency has no effect on the quality of financial reports.

The Influence of Internal Control on Management Effectiveness

The test results on the human resource competency variable on the quality of financial reports obtained a t-statistic value of 2.519 and a p-value of 0.012. The second hypothesis states that internal control influences the effectiveness of fixed asset management.

The influence of human resource competency on the quality of financial reports

The test results on internal control variables on the quality of financial reports obtained a t-statistic value of 3.393 and a p-value of 0.000. The research results show that human resource competency has a significant effect on the quality of financial reports.

The Effect of Internal Control on the Quality of Financial Reports

The test results on internal control variables on the quality of financial reports obtained a t-statistic value of 1.972 and a p-value of 0.016. The research results show that the internal control system has a significant effect on the quality of financial reports.

The influence of management effectiveness on the quality of financial reports

The test results on internal control variables on the quality of financial reports obtained a t-statistic value of 2.221 and a p-value of 0.026. The research results show that management effectiveness has a significant effect on the quality of financial reports.

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