Factors Affecting the Quality of MSME Financial Reporting

Abstract

Micro, Small and Medium Enterprises (MSMEs) are micro, small and medium scale business
activities that are managed by a group of groups and individuals whose aim is to grow and
develop a business. The development of MSMEs in Indonesia from year to year has grown
rapidly. In times of crisis, MSMEs are businesses that can survive when many companies go
out of business. The rapid development of the number of MSMEs in Indonesia has not been
accompanied by good financial reporting. In fact, there are still many MSMEs that have not
been able to compile financial reports properly, do not make financial reports because
financial information is considered not very important. Many UMKM players think that the
most important thing is the amount of turnover and profit generated. For this reason,
researchers are interested in seeing what factors affect the quality of MSME financial
reporting. This research was conducted by determining a random sample in order to obtain a
sample of 98 MSMEs in Jambi City. The results of this study found that the quality of human
resources, company characteristics and utilization of information technology had a
significant effect on the quality of financial reporting.