Risk Management Maturity, Corruption Control, and Human Development: Regional Financial Management Quality in Indonesia
Abstract
Purpose - This study examines the relationships among the Government Internal Control System (GICS), Risk Management Maturity (RMM), Internal Audit Capability (IAC), Corruption Control Effectiveness Index (CCEI), and Regional Financial Management Quality (RFMQ) in Indonesian provincial governments, including the mediating role of CCEI and the moderating role of the Human Development Index (HDI). Methods - Secondary data from Indonesian provincial governments covering 2021–2023 were analyzed. After data matching and complete-case screening, 79 province-year observations were retained. The hypothesized relationships were examined using Partial Least Squares Structural Equation Modeling (PLS-SEM) with WarpPLS. Findings - RMM was positively associated with RFMQ (β = 0.193; p = 0.036) and CCEI (β = 0.565; p < 0.001), while GICS was positively associated with CCEI (β = 0.182; p = 0.046). GICS and IAC were not significantly associated with RFMQ, IAC was not associated with CCEI, and CCEI was not associated with RFMQ. None of the indirect relationships through CCEI was supported, and HDI did not significantly moderate the governance–RFMQ relationships. Research implications - Risk-management maturity appears particularly relevant to both financial-management quality and corruption-control effectiveness. The differentiated pattern of results indicates that governance mechanisms should not be assumed to operate uniformly across institutional outcomes, and findings should be interpreted as statistical associations rather than causal effects. Originality - This study integrates internal control, risk-management maturity, internal audit capability, corruption-control effectiveness, financial-management quality, and human development within a single framework, demonstrating that different governance mechanisms exhibit distinct relationships with financial-management and corruption-control outcomes.