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Indonesia’s local government internal auditors (LGIAs): reflecting on low motivation in enhancing their dynamic capabilities while being the spearhead of responsible auditing

Sumiyana Sumiyana (Department of Accounting, Faculty of Economics and Business, Gadjah Mada University, Yogyakarta, Indonesia)
Efa Agus Susanto (Department of Accounting, Faculty of Economics and Business, Gadjah Mada University, Yogyakarta, Indonesia)
Dian Kartika Rahajeng (Department of Accounting, Faculty of Economics and Business, Gadjah Mada University, Yogyakarta, Indonesia)
Rijardh Djatu Winardi (Department of Accounting, Faculty of Economics and Business, Gadjah Mada University, Yogyakarta, Indonesia)

Journal of Accounting & Organizational Change

ISSN: 1832-5912

Article publication date: 21 February 2024

150

Abstract

Purpose

This study aims to investigate the dynamic capabilities of Indonesia’s local government internal auditors (LGIAs). LGIAs are the functional civil apparatus that is responsible for the main task of auditing local governments at the provincial, regency and municipal levels. Meanwhile, the LGIAs are also a spearhead in identifying and analysing errors, irregularities and fraudulent actions in the finance and development of local government.

Design/methodology/approach

The exploratory case study methodology was used, gathering insights from 18 individuals through interviews. In addition, the authors use a critical perspective of the LGIAs’ behaviours in enhancing their capabilities in compliance with the regulations. Moreover, the authors discuss the low motivation of LGIAs in terms of achievement in knowledge acquisition, a mechanistic curriculum creating a climate of low spirit, mental models in rooted ordinariness and behavioural anxiety in hierarchical systems of expertise.

Findings

This paper infers that the LGIAs reflect inertia in terms of capabilities because its curriculum, environment and organisation have pervasively changed the culture of the work environment. Consequently, although immorally convenient and practical, the LGIAs work with professional discipline and expedient behaviours. In addition, the LGIAs behave performativity, presenting task performances with undynamic capabilities. Lastly, these behaviours imply the need to enhance the LGIAs’ dynamic capabilities by structuring local governments’ adaptive environment. Hence, this adaptive environment, in turn, could facilitate LGIAs’ further being in high spirits in enhancing knowledge-based expertise.

Practical implications

This study firstly implies that the research findings indicate the need for environmental-, organisational- and curriculum-made transformations to change the capabilities and competencies of LGIAs in the future, facilitating them to increase assimilation-learning abilities. Furthermore, the research shows that mental models dominate LGIAs, resulting in low spirits and reluctance to develop their dynamic capabilities. The paper recommends creating a work culture where anxiety is not dominant and changing the flexibility of the professional structure for LGIAs so that they can be promoted from functional to structural officers.

Originality/value

LGIAs work in a cultural environment that is always structured to fulfil what the regulations require. So, this study’s first novelty is that it underlines the ordinary job practices of LGIAs and the low incentives to enhance their dynamic capabilities. Secondly, it is highlighted that the institution’s auspices do not facilitate LGIAs to advance their dynamic capabilities because of the static competency-based development curriculum. Thirdly, the research shows that the LGIAs are a civil apparatus whose employment system in Indonesia implies a no-dismissal culture and halo effect in measuring performance.

Keywords

Acknowledgements

Data availability statement: The data sets generated during and/or analysed during the current study are available from the corresponding author upon reasonable request.

Funding statement: University of Gadjah Mada Research Directorate financed this research up to publication.

Declarations of conflicting interests: The authors declare that they have no conflicting interests.

Ethics approval statement: This study has no ethical issues due to not using human bodies, plants and animals.

Citation

Sumiyana, S., Susanto, E.A.A., Rahajeng, D.K.K. and Winardi, R.D. (2024), "Indonesia’s local government internal auditors (LGIAs): reflecting on low motivation in enhancing their dynamic capabilities while being the spearhead of responsible auditing", Journal of Accounting & Organizational Change, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JAOC-10-2022-0159

Publisher

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Emerald Publishing Limited

Copyright © 2024, Emerald Publishing Limited

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