Journal of Governance, Taxation and Auditing

Analysis of Tax Audit Authority from the Perspective of Appeal Disputes in the Tax Court

Benny SETIAWAN, Yadhy CAHYADY, Supriyadi SUPRIYADI, Faisal Ahmad CHOTIB — Tue, 20 Jan 2026 00:00:00 +0700

This study analyzes the authority of tax audits conducted by the Directorate General of Taxes (DGT) from the perspective of appeal disputes in the Indonesian Tax Court. Within Indonesia’s self-assessment tax system, tax audits function as a primary instrument for ensuring taxpayer compliance and form the basis for the issuance of Tax Assessment Letters (Surat Ketetapan Pajak/SKP). However, audit results and the resulting SKP often give rise to disputes when taxpayers question both the material correctness and the procedural legitimacy of the audit process. This research employs normative legal research with a descriptive-analytical approach, examining statutory regulations, implementing rules, and relevant Tax Court decisions concerning disputes over audit authority and procedures. The findings indicate that tax audit authority is attributive and explicitly regulated under the General Provisions and Tax Procedures Law (UU KUP) and its implementing regulations. In appeal proceedings, the Tax Court assesses both formal aspects—such as compliance with audit procedures and authority—and material aspects relating to the accuracy of tax calculations. Procedural violations do not automatically invalidate a Tax Assessment Letter; instead, judges evaluate the seriousness of the violation and its impact on taxpayer rights and material truth. The study concludes that the Tax Court plays a crucial role in controlling the use of audit authority while balancing legal certainty, protection of taxpayer rights, and the state’s fiscal interests.

Moderation of Regional Original Revenue and Capital Expenditure on Economic Growth

Riyans ARDIANSYAH, Marten PUYO, Mursalim SALAM — Tue, 20 Jan 2026 00:00:00 +0700

The purpose of this study is to examine the effect of regional original revenue and capital expenditure on economic growth, with balancing funds as a moderating variable. The study population consisted of regional financial data from five regencies/cities in North Kalimantan Province. The sample selection method used purposive sampling. The data consisted of Gross Regional Domestic Product (GDP) at constant prices to determine economic growth in North Kalimantan regencies/cities, realized regional income (PAD), capital expenditure, and balancing funds. Data analysis methods used descriptive statistical analysis, linear regression, and moderated regression analysis. The results of the study indicate that Regional Original Revenue (PAD) partially has no positive effect on economic growth. Capital Expenditure has a positive and significant effect on economic growth. The Balancing Fund has no direct effect on economic growth. The Balancing Fund is proven to act as a pure moderator in the relationship between Capital Expenditure and Economic Growth. Conversely, the Balancing Fund is unable to moderate the relationship between Regional Original Revenue and Economic Growth. Simultaneously, PAD, Capital Expenditure, and the Balancing Fund are able to explain variations in regional economic growth quite well, although there are still other factors outside the model that also influence economic growth.

Supervision and Law Enforcement to Increase Taxpayer Compliance at the Pondok Aren Tax Office

Tue, 20 Jan 2026 00:00:00 +0700

This study analyzes the influence of supervision and law enforcement on improving taxpayer compliance at the Pondok Aren Tax Office (KPP Pratama), focusing on post-audit Taxable Entrepreneurs (PKP). The approach used was qualitative with descriptive-analytical methods, through data collection from interviews (tax officers and taxpayers) and surveys to identify factors influencing post-audit compliance. The study results indicate that stricter supervision and effective law enforcement have the potential to improve compliance, but their implementation still faces significant obstacles such as limited resources, weak taxpayer understanding of tax obligations, and the effectiveness of sanctions that have not yet provided an adequate deterrent effect. The findings also emphasize the importance of more intensive education and outreach for new PKPs and the need to improve internal coordination (for example, between the supervisory and audit functions) to ensure more targeted post-audit follow-up. Key recommendations include strengthening technology-based supervision systems, improving tax counseling, and stricter law enforcement, including the option of freezing electronic certificates to suppress repeated violations and encourage ongoing compliance.

Improving Taxpayer Compliance Through Assistance in Submitting Annual Income Tax Returns for the 2024 Tax Year and Education on the Coretax Application for Government Agencies

M. Ridhwan GALELA, Supriyadi SUPRIYADI, Budiasih WIDIASTUTI — Tue, 20 Jan 2026 00:00:00 +0700

Compliance with Annual Tax Return (SPT) reporting remains a challenge in Indonesia's self-assessment system, primarily due to limited taxpayer understanding and adaptation to updates to the tax administration system, including the implementation of Coretax. The Community Service Program through the 2025 Tax Volunteer Program at the Pondok Aren Tax Office (KPP Pratama) is designed to improve compliance with Annual Income Tax Return (SPT) reporting for the 2024 Tax Year while providing education on the use of the Coretax application for government agency taxpayers. The program is implemented through stages of volunteer recruitment, capability mapping and training, assistance in filling out and reporting SPTs via e-Filing, assistance for taxpayers on the DSPT list, Coretax education for treasurers/agencies, and publication of tax education through social media. The implementation results show the collection of 99 student volunteers and 59 lecturer volunteers divided into 20 teams, with SPT assistance carried out offline in the period from the end of February to March 2025. Coretax education for government agencies also helps overcome feature constraints and understanding the reporting process in the new system. Overall, this program contributes to improving tax return reporting assistance services and strengthening tax literacy, and is worthy of continuation as ongoing support for Coretax adaptation.

The Effect of Board Size, Audit Committee, Ownership Structure, Independent Commissioners, Leverage, and Firm Size on Financial Distress

Adinda Nurul Oktavia PRAYITNO, Mahroji MAHROJI — Tue, 20 Jan 2026 00:00:00 +0700

The post-pandemic period represents an economic recovery phase during which many companies face financial pressure due to declining revenues and high debt burdens. This condition is particularly critical in the infrastructure sector, which requires financial stability to sustain long-term operations. This study aims to analyze the effect of corporate governance and ownership structure on financial distress in the infrastructure sector. The data were obtained from companies listed on the Indonesia Stock Exchange (IDX) for the 2021–2024 period using a quantitative approach with purposive sampling. Data analysis was conducted using multiple linear regression. The results indicate that board size and managerial ownership have a significant negative effect on financial distress. These findings support agency theory, which posits that effective internal supervision and managerial ownership can reduce agency conflicts and enhance financial efficiency. Meanwhile, audit committee meeting frequency, independent commissioners, institutional ownership, leverage (DER), and firm size show no significant effect. The study highlights the importance of strengthening corporate governance structures and managerial ownership roles in maintaining financial stability. Future research is recommended to expand the scope and incorporate external factors for a more comprehensive understanding.

The Effect of Firm Size, Liquidity Ratio, and Leverage on The Profitability of The Financial Sector In Indonesia in The 2024 Period

Sheila Rizqya LISTY, IMRONUDIN — Tue, 20 Jan 2026 00:00:00 +0700

The financial sector is one of the main foundations supporting the stability and growth of the Indonesian economy. This sector's role is increasingly crucial as the complexity of business activities and the need for flexible funding increase. Profitability serves as a fundamental benchmark for evaluating the stability and operational success of firms within the financial industry. This research examines how variations in Firm Size, Liquidity Ratio, and Leverage contribute to shaping the profitability performance of financial institutions in Indonesia throughout 2024. Profitability is assessed using two principal indicators—Return on Assets (ROA) and Net Profit Margin (NPM)—which illustrate the degree to which firms can efficiently utilize their assets and convert revenue streams into net income. Employing a quantitative design, the study relies on secondary data derived from the 2024 annual financial statements of 97 financial-sector entities listed on the Indonesia Stock Exchange (IDX). The analysis utilizes a multiple linear regression framework, supported by a full range of classical assumption tests, to evaluate the interactions among the variables. The results indicate that Firm Size has a statistically significant effect on ROA, while its influence on NPM is not found to be significant. The Liquidity Ratio does not affect either profitability indicator. Leverage does not affect ROA, but significantly influences NPM. Simultaneously, all three independent variables significantly influence profitability in both the ROA and NPM models. These outcomes carry notable implications for both financial decision-makers and market participants: company size and debt-based financing structure can impact profitability differently depending on the indicators used.

The Role of Assurance in Reducing Greenwashing in Sustainability Reporting: A Literature Review

Dzul FADHILATI, Muthmainnah MUTHMAINNAH — Tue, 20 Jan 2026 00:00:00 +0700

Penelitian ini bertujuan untuk memetakan dan mensintesis literatur akademis terkini mengenai peran external assurance (jaminan eksternal) sebagai mekanisme tata kelola utama dalam mendeteksi dan memitigasi praktik greenwashing pada laporan keberlanjutan. Menggunakan metode Tinjauan Literatur (Literature Review) dengan pendekatan kualitatif deskriptif pada studi periode 2018–2025, penelitian ini menganalisis dinamika pelaporan melalui lensa Agency Theory, Legitimacy Theory, dan Signaling Theory. Analisis difokuskan pada motivasi strategis manajemen dan efektivitas verifikasi pihak ketiga. Hasil sintesis mengungkap adanya dualisme peran assurance. Temuan kritis menyoroti risiko assurance yang bersifat kosmetik, di mana mekanisme ini dieksploitasi untuk tujuan legitimasi simbolis (symbolic assurance) atau praktik pencarian opini (opinion shopping) guna menutupi kinerja lingkungan yang buruk. Studi ini menyimpulkan bahwa kemampuan assurance dalam menekan greenwashing sangat bergantung pada tingkat kedalaman verifikasi (reasonable assurance) dan independensi penyedia jasa. Temuan ini mengimplikasikan perlunya standar regulasi yang lebih ketat untuk memastikan assurance tidak hanya menciptakan "ilusi transparansi," melainkan mendorong akuntabilitas lingkungan yang substantif.

Financial Distress Analysis Using The Springate and Altman Z-Score Methods in Manufacturing Companies Listed on The Indonesia Stock Exchange

Tue, 20 Jan 2026 00:00:00 +0700

This study analyzes the ability of the Springate and Altman Z-Score methods in predicting financial distress in manufacturing companies listed on the Indonesia Stock Exchange (IDX) for the period 2018- 2022. Although the Indonesian capital market shows positive growth, external challenges such as global economic fluctuations and geopolitical pressures (The Perfect Storm) emphasize the importance of early detection of financial distress to prevent the risk of bankruptcy. This study uses an associative quantitative approach. The research sample consists of 75 financial reports from 15 manufacturing companies, selected through a purposive sampling technique over five years of observation. Data analysis involves descriptive statistics, normality tests, and hypothesis testing (F-Test and t-Test) using SPSS 23.0. The results of the hypothesis testing indicate that both the Springate and Altman Z-Score methods simultaneously and partially have a positive and significant effect in predicting financial distress in manufacturing companies on the IDX. However, based on the accuracy analysis (R-Square), the Springate model (S-Score) is proven to be superior with an accuracy level of 73% (or 73.7%), which is categorized as having very strong closeness. Meanwhile, the Altman Z-Score model had an accuracy rate of 42.3%, categorized as having a strong correlation. The superior accuracy of the Springate model is supported by the use of the Earnings Before Taxes to Current Liabilities (EBTCL) ratio, which is considered more representative. This study concluded that the Springate method was the most accurate model in predicting financial distress in manufacturing companies on the Indonesian Stock Exchange (IDX).

Analysis of Financial Performance of Industrial Sector Companies Through Liquidity, Leverage and Efficiency Ratios

Yudia Setya ANDINI, Imronudin IMRONUDIN — Tue, 20 Jan 2026 00:00:00 +0700

In a highly competitive industrial landscape, maintaining financial strength has become essential for a firm’s long-term viability. Profitability—captured most directly through Return on Assets (ROA)—reflects how effectively a company converts its assets into earnings. This study examines how three key financial indicators shape ROA: the Current Ratio, representing short-term financial resilience; the Debt to Equity Ratio, reflecting the structure and risk profile of corporate financing; and Total Asset Turnover, indicating how efficiently assets are mobilized to generate revenue. By assessing these ratios in industrial companies listed on the Indonesia Stock Exchange during 2021–2024, the research provides a concise overview of how liquidity, leverage, and asset efficiency collectively influence corporate profitability. Each ratio reflects a different aspect of financial health: CR describes the company’s liquidity position, DER indicates its leverage and risk exposure, while TATO captures the degree to which its assets are effectively used to generate sales. The focus on this period is driven by the economic instability associated with the COVID-19 pandemic and its recovery phase, which may have reshaped corporate financial dynamics. Previous studies examining these ratios simultaneously within the industrial sector remain limited. The results of this study are anticipated to contribute to the broader academic discourse on the factors that influence corporate financial performance, while also providing practical guidance for managers and investors who aim to improve a company’s profitability.

The Effect of Digital Technology and Corporate Social Responsibility (CSR) on the Financial Performance of Manufacturing Companies with Financial Flexibility Moderation

Nada An Nur ULA, Imronudin IMRONUDIN — Tue, 20 Jan 2026 00:00:00 +0700

The development of digital technology is now an integral part of modern business strategies and is driving transformation in the manufacturing sector. Companies are increasingly expected to engage in continuous Corporate Social Responsibility (CSR) initiatives as part of maintaining constructive interactions with their stakeholders. This research investigates how digital technology adoption and CSR practices influence financial performance, while also assessing whether financial flexibility moderates these relationships, using a sample of manufacturing firms listed on the Indonesia Stock Exchange (IDX) from 2020 to 2023. The study employs a quantitative associative design with purposive selection, resulting in 125 observed firms. Data were processed using Moderated Regression Analysis (MRA) with Eviews 13. The findings reveal that digital technology does not exert a meaningful or positive contribution to financial outcomes, as its effect is negative and statistically insignificant. In contrast, CSR activities demonstrate a significant positive association with financial performance. Financial flexibility itself is shown to negatively and significantly affect financial performance. Moreover, financial flexibility fails to enhance the influence of digital technology on financial performance but does amplify the impact of CSR. Overall, the evidence indicates that CSR initiatives, when supported by robust financial flexibility, can serve as a strategic asset that elevates organizational performance and strengthens competitive positioning.

The Impact of Sustainability Reports, Sustainability Accounting, and Environmental Innovation on the Achievement of the Sustainable Development Goals (SDGs): Empirical Evidence on Consumer Goods Companies in the Food and Beverage Sub-Sector in Indonesia

Kadek Goldina Puteri DEWI, Ni Putu Riski MARTINI, Ni Made Devi RATNASARI — Tue, 20 Jan 2026 00:00:00 +0700

This study aims to examine the effect of sustainability reporting, sustainability accounting, and environmental innovation on the achievement of Sustainable Development Goals (SDGs) at the corporate level. The research focuses on consumer goods companies in the food and beverage sub-sector listed on the Indonesia Stock Exchange (IDX) during the period 2020–2022. Using a quantitative approach, this study employs secondary data obtained from annual reports and sustainability reports. The sample is selected through purposive sampling, resulting in panel data observations analyzed using panel data regression. The dependent variable is SDGs achievement, measured through an SDGs disclosure index based on Global Reporting Initiative (GRI) indicators with an emphasis on environmental and waste management aspects. The independent variables include sustainability reporting quality, sustainability accounting practices measured through environmental cost and waste management investment disclosures, and environmental innovation proxied by disclosures of environmentally friendly products and processes. The results of the fixed effect model indicate that sustainability reporting, sustainability accounting, and environmental innovation have a positive and significant effect on corporate SDGs achievement. Sustainability accounting demonstrates the strongest influence, highlighting the importance of internal measurement and recognition of environmental costs in supporting sustainable development. These findings suggest that achieving SDGs in the food and beverage industry requires an integrated sustainability approach that combines transparent reporting, robust sustainability accounting systems, and continuous environmental innovation.

The Effect of Current Ratio, Total Asset Turnover and Debt to Equity Ratio on Financial Distress (A Study of Peru Textile and Garment Companies Listed on the Indonesia Stock Exchange in 2024)

Ajeng Elsa HERLINA, Abdul Hafiz TANJUNG — Tue, 20 Jan 2026 00:00:00 +0700

This study was conducted on banking companies registered with BELI in 2024. The purpose of this study was to determine the influence of the Current Ratio, Total Asset Turnover, and Debt to Equity Ratio on Financial Distress, both partially and simultaneously. This study was conducted based on the phenomenon of companies experiencing losses due to liabilities exceeding company assets, resulting in the company potentially experiencing bankruptcy. The model used in this study is a quantitative model. The population of this study was 17 textile and garment companies registered with BELI in 2024. The sampling technique used purposive sampling technique, with 17 textile and garment companies selected. The data analysis method used was descriptive and associative analysis using logistic regression analysis, and the data processing tool used in this study was SPSS version 23. The results of this study indicate that there is a partial and simultaneous influence on the Financial Distress variable in textile and garment companies registered with BELI in 2024.