The Meaning of Regulatory Adaptation, Organizational Culture, and Leadership in Commitment to Implementing Financial Accounting Standards (Case Study at the Indonesian Army Military Foundation)

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Cimahi— Army-Linked Foundation Struggles With New Accounting Standards Without Strong Leadership and Culture. Research conducted by Jati Dwi Apriyanto and Heni Nurani Hartikayanti from Jenderal Achmad Yani University (Unjani), Cimahi, published in January 2026 in the International Journal of Business and Applied Economics (IJBAE).

Research conducted by Jati Dwi Apriyanto and Heni Nurani Hartikayanti shows that the Kartika Eka Paksi Foundation—an Indonesian Army-linked foundation—still treats the adoption of the new SAK EP accounting standards as an administrative task rather than a governance commitment. The study highlights leadership, organizational culture, and regulatory adaptation as the three decisive factors that determine whether accounting reforms actually work in practice.

Why SAK EP Matters for Non-Profit Organizations

SAK EP was designed to provide simpler but still accountable financial reporting for private entities and non-profit organizations. In the case of foundations, the application of SAK EP is also reinforced by ISAK 35, which regulates how non-profit financial statements should be presented so that they reflect the organization’s social and non-commercial purpose.

For donors, stakeholders, and the public, these standards serve one core function: ensuring that financial reports are not just “complete,” but also reliable, transparent, and consistent.

In organizations that manage educational, social, and religious programs, accountability is not a secondary concern. It is central to public trust.

A Case Study Inside an Indonesian Army Foundation

Unlike many studies that rely on surveys or statistical modeling, Apriyanto and Hartikayanti used a qualitative case study approach. This method allowed them to explore the real dynamics behind compliance—how people interpret rules, how procedures are applied, and why inconsistencies continue.

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The researchers collected data through:

in-depth interviews with key informants involved in financial management,
limited observations,
and document analysis, including internal policies and financial reports.

To ensure credibility, the study applied triangulation of sources and methods, then processed the findings using thematic analysis.

The research identified three dominant themes that shape the organization’s commitment to implementing accounting standards:

Regulatory adaptation
Organizational culture
Leadership

Key Finding 1: Regulatory Adaptation Remains Procedural

The first major finding is that the foundation’s adaptation to SAK EP and ISAK 35 remains largely formal and procedural.

Financial managers are aware of the regulations, but the standards have not been fully internalized into internal policies and accounting systems. As a result, financial reporting tends to focus on meeting administrative requirements—especially external audits—rather than building sustainable accounting governance.

The study also highlights a practical obstacle that sounds simple but has serious impact: delays in receiving regulatory information.

One informant, Ginansyah Ahmad, explained that the foundation often receives updates late, making it difficult to implement changes on time.

This creates a “transition gap,” where staff must revise reports suddenly after the reporting format has already been applied, increasing the risk of inconsistencies.

Based on interview scoring and assessment, regulatory adaptation at the foundation reached only 50%, categorized as “poor.”

Key Finding 2: A Strong Hierarchy Slows Cultural Change

The second theme is organizational culture.

The Kartika Eka Paksi Foundation operates with a structured, procedural, and hierarchical work culture. On the surface, this creates order and consistency. However, the study shows that this same structure also reduces flexibility and slows adaptation.

Internal communication is formal. Staff tend to wait for official instructions before making adjustments, even when they are aware of accounting standard updates.

The study found that accountability values have not yet been consistently internalized as shared organizational values. Financial reporting is still seen as the responsibility of specific technical units rather than a collective governance duty.

The organizational culture assessment scored 67%, categorized as “adequate,” but still not strong enough to accelerate change.

Key Finding 3: Leadership Is the Bridge Between Rules and Practice

The strongest message from the study lies in the role of leadership.

Apriyanto and Hartikayanti found that leadership functions as the key bridge that translates regulations into organizational behavior.

Leadership affects implementation through:

policy direction,
supervision and monitoring,
human resource development,
and internal motivation.

When leadership involvement is limited, standard implementation becomes dependent on specific individuals and can quickly weaken when there is no external pressure, such as audits.

Leadership at the foundation scored 67%, categorized as “adequate,” meaning leadership support exists but still lacks speed and proactive adaptation.

The Most Important Insight: These Three Factors Work Together

One of the study’s most valuable contributions is that it does not treat regulatory adaptation, organizational culture, and leadership as separate issues.

Instead, the researchers show that these three factors interact dynamically.

Without strong leadership, regulatory adaptation becomes symbolic.
Without a culture of accountability, compliance becomes temporary.
Without regulatory adaptation mechanisms, staff cannot implement standards consistently even if leadership supports it.

In other words, financial governance in non-profit organizations cannot be fixed by regulation alone.

Practical Impact: Why This Study Matters Beyond the Military Foundation

Although this study focuses on a specific case—the Indonesian Army’s Kartika Eka Paksi Foundation—the implications are highly relevant for many organizations across Indonesia.

Thousands of non-profit entities, foundations, educational institutions, and social organizations face similar challenges:

limited accounting staff competency,
slow internal policy revision,
weak financial governance culture,
and reliance on external audits rather than internal accountability.

The study offers clear recommendations, including:

building a faster mechanism to receive regulatory updates (subscriptions, forums, internal memos),
strengthening organizational learning through workshops and regular discussions,
improving leadership communication so accounting units can prepare earlier,
increasing regular training and mentoring on SAK EP and ISAK 35,
and creating a more responsive SOP for policy revisions.

Author Profiles

· Jati Dwi Apriyanto - Universitas Jenderal Achmad Yani (Unjani), Cimahi
· Heni Nurani Hartikayanti - Universitas Jenderal Achmad Yani (Unjani), Cimahi

Research Source

Apriyanto, Jati Dwi., & Hartikayanti, Heni Nurani. (2026).The Meaning of Regulatory Adaptation, Organizational Culture, and Leadership in Commitment to Implementing Financial Accounting Standards (Case Study at the Indonesian Army Military Foundation).
International Journal of Business and Applied Economics (IJBAE), Vol. 5 No. 1, Januari 2026, hlm.467–486.

DOI:https://doi.org/10.55927/ijbae.v5i1.596

official URL: https://nblformosapublisher.org/index.php/ijbae