Financial Literacy as a Boundary Condition in the Relationship between Human Resource Competence, Internal Control and Financial Management Quality: Evidence from MSMEs in Makassar
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2026-10-08Downloads
Abstract
This study examines the relationships of human resource competence and internal control with financial management quality and investigates financial literacy as both a direct predictor and a boundary condition among micro, small, and medium-sized enterprises (MSMEs) in Makassar, Indonesia. A quantitative cross-sectional design was employed using data from 261 MSME owners, managers, and personnel involved in financial administration. The data were analyzed using partial least squares structural equation modeling (PLS-SEM) with SmartPLS 4. The results show that human resource competence, internal control, and financial literacy are positively associated with financial management quality. Internal control exhibited the strongest direct contribution, highlighting the importance of formalized financial procedures and monitoring mechanisms. Financial literacy significantly strengthened the relationship between human resource competence and financial management quality, indicating that this relationship becomes stronger at higher levels of financial literacy. In contrast, financial literacy did not significantly moderate the relationship between internal control and financial management quality. These findings suggest that financial literacy operates as a selective rather than universal boundary condition. The study contributes to the MSME financial management literature by integrating individual competence, organizational control, and financial knowledge within a contingent framework and by emphasizing financial management quality as a process-level outcome
Keywords:
human resource competence internal control financial literacy financial management quality MSMEs PLS-SEM MakassarReferences
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