Accounting,management and organizational change: A comparative study of local government

This is a study of management accounting in local government in the context of significant change (managerial, organizational and environmental). The study is based on four case studies: two in Scotland and two in New Zealand. The paper explores two competing theories of organizational life—the instrumental view as espoused by New Public Management proponents, and the socially constructed, as advocated by new institutional theorists. This study locates management accounting at the centre of these changes in New Zealand with a more limited role in the U.K. where there is evidence of institutional isomorphism.     

The structuration of legitimate performance measures and management: day-to-day contests of accountability in a U.K. restaurant chain

This paper reports on a longitudinal field study of accounting systems and their relationship to accountability in a U.K. restaurant chain. It is based on interviews and observations involving restaurant managers, the operations management hierarchy, and head office managers. In contrast to earlier studies of accounting and accountability this paper presents evidence to suggest that local managers’ uses of central performance reports may serve to disseminate head office’s strategic vision to operating units. It also suggests that the contests of accountability around performance measurement systems that have previously been reported in connection with major organizational transformations are a feature of everyday organizational management. With reference to structuration theory three modalities of such contests of accountability (signification, legitimation, domination) are distinguished and some of their interrelationships explained. Within an overall frame of strict hierarchical relationships, restaurant chain management exhibited considerable diversity with respect to the uses of performance measures, reflecting diverse local and central factors.     

`Sector Neutrality' and NPM'Incentives': Their Use in Eroding the Public Sector

Despite New Zealans public-sector reformers' claims that financial reporting changes promote competitive neutrality and improved accountability and transparency, privatisation-favouring "incentives" were designed into the system at a hidden detailed level. That distorted system has been encompassed within the accounting profession's standard-setting activities through standard-setters' erroneous claims, in Australia and New Zealand, that the accounting profession's conceptual framework and accounting standards are sector-neutral. These claims help to conceal the fact that the public-sector financial management system has been designed to be partial, with its incentives structured to erode the public sector and favour privatisation.     

'Sector Neutrality' and NPM 'Incentives': Their Use in Eroding the Public Sector

Despite New Zealans public-sector reformers' claims that financial reporting changes promote competitive neutrality and improved accountability and transparency, privatisation-favouring "incentives" were designed into the system at a hidden detailed level. That distorted system has been encompassed within the accounting profession's standard-setting activities through standard-setters' erroneous claims, in Australia and New Zealand, that the accounting profession's conceptual framework and accounting standards are sector-neutral. These claims help to conceal the fact that the public-sector financial management system has been designed to be partial, with its incentives structured to erode the public sector and favour privatisation.     

The Financial Accountability of Australia's Medicare System: A Generational Accounting Analysis

The financial sustainability of publicly funded health care systems is sensitive to the demographics of ageing populations, which have a significant bearing on their financial management, accountability and reporting of their financial performance. This paper examines historical and current trends in demographic structure of Australia's population that are likely to impact on the financial management and accountability practices affecting Australia'suniversal public health care system ('Medicare'). The pay-as-you-go financed funding status of Medicare as represented under both currently required, cash-based accounting principles and proposed accrual-based accounting principles are criticised for not recognising the obligations of the Australian government under Medicare. An alternative system of generational accounting is proposed that projects the financial management costs of Medicare. Data are taken from both historical trends in expenditure and ageing as well as projected demographics. The analysis implies that there is significant intergenerational-inequity in the funding of Medicare, which is not recognised under accrual-based accounting principles that are now being used to evaluate the financial accountability and performance of government entities.     

Inter‐Organizational Cooperation Challenging Hierarchical Accountability: The Dominated Actors in a Municipal Joint Venture

New public management offers a number of solutions to the kinds of problems that public sector organizations experience. In taking an accountability perspective, this paper elaborates on how two of these – strict responsibility for performance, and inter‐organizational cooperation – may conflict. The setting for this study is a joint venture with a dominant municipality and six dominated municipalities as owners. The article examines how horizontal accountability processes may influence the dominated owners’ hierarchical accountability. The ability to account hierarchically for the quality of service within budgetary parameters is problematized, when dominated owners may dismantle their ability to demand horizontal accountability.     

Transforming frameworks of accountability: The case of water privatization

The U.K. Government's belief in the innate inefficiency of traditional public sector provision of goods and services has inspired a number of initiatives which have resulted in management of public sector enterprises being confronted by an increasingly commercial environment, tighter financial controls, increased competition, and in some cases transfer to the private sector through privatization. This paper is concerned with investigating the ways in which accounting and accounting information has contributed to and shaped processes of organizational change in one area of the public sector, the ten Regional Water Authorities of England and Wales. In the early 1980s, the Water Authorities were subject to pressures from new Government financial controls and performance aims to become more efficient. These pressures intensified when the Government announced its intention to privatize them in 1986, and continued up to 1989 when privatization took effect. Since privatization the Water Authorities have been subject to “yardstick” competition under a new regulatory framework, and comparative judgements by the financial markets. In considering these changes, the paper examines the constitutive role of accounting in articulating changing organizational priorities, and in promoting first a vocabulary of costs and subsequently a vocabulary of profits as languages of organizational motive.     

Management accounting and accountability in a new reality of everyday life

This paper focuses on the concept ‘accountability’. Individuality and accountability is discussed against the background of management accounting in a privatised company in transition from command to market economy. With Berger, P.L., Luckmann, T., 1966. The social construction of reality. A Treatise on the Sociology of Knowledge. Garden City, New York, Doubleday/Anchor, the accountability concept is presented as a translation and interpretation of an institutional arrangement with a given logic or rationality. Based on a case study, the paper shows that changing views on accountability support the institutionalisation processes, constituting the case company as a market economy actor in which there is a ‘struggle’ between different rationale views (the market economy, social accountability and production-oriented views). The analysis explicates various ways in which these matters relate to the new way of talking about the company and its survival under market economy conditions—a struggle that management accounting must take into account particularly in the way it deals with the consequences of individual action.     

The U.K. private finance initiative: An accounting retrospective

The Private Finance Initiative (PFI) in the U.K. has been the subject of considerable interest in government, professional and academic literature. This reflects its importance as one of the classic forms of Public Private Partnership, its adoption in other jurisdictions, the scale of infrastructure investment under PFI legislation and the extent of controversy that has accompanied its development and application. The financial reporting of PFI schemes has been one element of this controversy in view of its potential to limit public sector financial accountability by off-balance sheet financing and the potential for alternative interpretations of its accounting treatment. It is now an appropriate time to review the turbulent history of accounting for the PFI as U.K. public sector accounting is now based upon International Financial Reporting Standards. This has resulted in the redundancy of previous accounting guidance issued by the UK ASB and the Treasury which, at the time of being abandoned, contained unresolved inconsistencies.This paper uses a triangulation method of investigation linking the input to, and output from, the regulatory process to an analysis of public domain evidence of press coverage and letters submitted to the standard setter and interviews with key participants to the standard-setting process. This approach shows that hidden pressures were influential in the process of developing PFI accounting regulation. Different interpretations of the ASB's principles-based Application Note and the Treasury's more rules-based Technical Note created de-facto alternative accounting treatments. The pressure, from organisations such as the Financial Reporting Advisory Board, for reform of PFI accounting was only released by the government's decision to switch the U.K. public sector to IFRS-based accounting.     

Public Choice and Accounting Standard Setting in New Zealand: An Exploratory Study

Recent studies in accounting regulation have used either the capture argument or the pluralistic notion to describe the enactment of accounting regulations. This paper explores the nature of the impact of public choice in accounting standard setting in New Zealand using the pluralistic notion. To provide an insight into the standard-setting process, this paper involves an examination of the establishment, withdrawal and re-establishment of New Zealand's most controversial standard after current cost accounting — the standard on investment property accounting (SSAP 17). The investigation considers the nature of public choice in the agenda entrance, demand and supply factors influencing standard setting in New Zealand. The results indicate that the New Zealand accounting standard-setting process is pluralistic in a limited way. Like most other English-speaking countries, the scope of participation for certain groups has been institutionalized on the supply side by way of membership of standard-setting committees of the New Zealand Society of Accountants. On the demand side, however, consumers of accounting have been provided with only limited scope for participating in the formal process of standard setting. Nevertheless, other means (i.e., exogenous and informal ones) may be used to influence the process. Overall, from both the demand and supply perspectives of regulation, the Big-8 accounting firms (as they were previously known) followed by the preparers of financial statements, seem to have greater participatory capacity in the New Zealand standard-setting process.     

Brand value accounting: an international comparison of perceived managerial implications

Data concerned with the managerial implications of brand value accounting were collected from accountants and marketing managers working in strongly branded companies in New Zealand (N.Z.), the United Kingdom (U.K.) and the United States (U.S.). Since the external reporting climate in the U.S. prohibits the inclusion of brand value as a separate asset in the published balance sheet, it was anticipated that U.S. managers would be the least positively disposed to the potential of beneficial managerial implications deriving from brand valuation. Contrary to this expectation, managers in the U.K are the least positively disposed to potential managerial implications associated with brand value accounting. This result is particularly interesting as brand value accounting has commanded considerable attention from the U.K. accounting profession since the late 1980s when several large U.K. companies elected to capitalize brand values in their external financial statements. In addition to the international differences noted, the degree of commonality of findings across the three countries is also noteworthy. The data reported provide strong support for the view that there is considerable potential for positive managerial implications from brand value accounting.     

Risk and risk management in management accounting and control

Recent world events, most notably the global financial crisis, have refocused and intensified interest on risk and the nature of systems that operate to manage risk. One area that has received relatively little attention is the interrelation between risk, risk management and management accounting and control practices. This editorial provides an introduction to the special issue of the journal on “Risk and Risk Management in Management Accounting and Control”. It argues that risk and the way it is managed has become a feature of organizational life in both the public and private sectors. By changing organizational practices risk management can facilitate and legitimise certain ways of organizing. It has the potential to change lines of responsibility and accountability in organizations, representing a particular way of governing individuals and activities. The argument is further made that risk management has moved away from being an issue of narrow concern to finance (value at risk, derivatives, etc.) or accountants (financial statement disclosure, etc.) to an issue about management control and therefore a key area in which management accountants need to engage. This editorial also highlights the potential side-effects of risk management, including issues around trust and accountability, but also the focus on secondary or defensive risk management and the rise of reputation risk.     

Capital Allowances and the Incentive to Invest

In recent years many organisations have moved towards a total quality management (TQM) path in their quest for quality. Accounting researchers have become interested in understanding how accounting systems are implicated within a TQM environment. This paper reports on a case study of TQM adoption and changes in management accounting systems (MAS) within a New Zealand construction company. It evaluates organizational approaches to implement TQM as a strategic option and the subsequent change in MAS. The paper suggests that an organisation may initiate TQM practices to promote ‘institutional’ and ‘quality’ culture rather than for purely technical reasons. It also suggests that when an organisation adopts new management practices such as TQM, it may lead to changes in the organisation's internal control mechanisms, such as management accounting and reporting processes.     

商业银行财务集中的管理框架与创新思路

商业银行财务集中有效解决了财务核算主体分散、监控管理不到位的问题,使财务信息核算质量提高,但是,其仍然存在以下隐忧：受管理环境的制约,财务集中的基础性定位、单一的核算职能与商业银行价值管理的发展要求存在差距,财务信息与商业银行预算管理、绩效评价等管理会计的相关性较弱。财务集中的创新应通过全面的成本控制来发挥财务资源配置...     

HOUSEHOLD ACCOUNTING AS AN INTERFACE ACTIVITY: THE HOME,THE ECONOMY AND GENDER

Accounting is an interface activity, an endeavour that allows objects and artefacts to attain value (in use or exchange) across the boundaries of different domains. Accounting achieves this transferability for objects; the concept of accountability does the same for people, as peoples' levels of accountability and responsibility are implicated in assessments of their value and in whether this value is recognised in different spheres of life. The focus of the paper is on accounting and accountabilities at home, through exploring their impact on the interfaces between gender, the home and the economy. This exploration is conducted through an analysis of instructional texts on financial management in the home. It is argued that practices of accounting and accountability are deeply implicated in gender relations, in the ideology of the home and in maintaining the separation between the private and the public realms of activity.     

Casemix accounting systems: new spaces for action

This paper discusses the implementation of a casemix accounting system within a large New Zealand public hospital. In the context of healthcare, casemix accounting systems are involved in attempts to increase the cost-consciousness of clinicians through the rationalization and codification of clinical activity. The paper considers the power effects of casemix accounting using a perspective that views such information and control systems as disciplinary technologies. The complex and contradictory setting of the hospital characterized by a negotiated order meant that while the casemix accounting system did appear to provide some controlling influence, it also produced forms of resistance on the part of clinicians. Our experience suggests that such systems are best thought of as making possible a new discursive space within which all organizational participants, in this case both management and clinicians, can act.     

Recurrent rescues of a financial institution: Enduring human features and socialised losses

This paper is directed at showing that there are features of accounting resistant to technical progress in legislation, auditing and accounting standards so that it is not so much that history repeats itself as that there remain elements of the practice of accounting beyond legislative reach. Such elements stem essentially from diverse and perhaps ungovernable characteristics of human nature and relationships. This situation is exemplified through two case studies documenting an extraordinary recurrence of financial mal-management in the case of the Bank of New Zealand (BNZ). Twice, the BNZ fell into the hands of forceful individuals with political connections who were able to control its management and influence lending policy with disastrous results. In both instances separated by nearly a century, creative accounting masked poor performance, and the government was persuaded to rescue what was once affectionately known as ‘The People's Bank’. Such rescues represented a socialisation of losses, not least because the BNZ was shareholder-owned and those responsible escaped largely unscathed. Reliance upon the possibility of rescue may even promote riskier behaviour.     

Information and the transnational SME controller

One of the issues that face the small- and medium-sized enterprise (SME) when expanding is the ‘control’ issue and this paper investigates and presents preliminary evidence of ‘controlling’ or ‘management accounting’ practice in a transnational SME. Wibsey, the site of the case, is now a small group of companies that have expanded from a U.K. base into 10 European countries. This expansion has posed complex problems, which have increased the information requirements of the SME. The contextual issues of complexity and resulting challenges for the transnational organization in its management accounting, information and control systems are considered. Wibsey uses traditional management accounting as the basis of supporting decision-making in the group and a lower level of information need is reported, in contrast to Dent (1996) (Dent, J. F., 1996. Global competition: challenges for management accounting and control,Management Accounting Research , 7(2), 247–269), because the group chooses to maintain a traditional ‘accounting-led’ evaluation system in controlling and evaluating its transnational operations.     

The accountability information needs of key charity funders

Government and philanthropic funders are key charity stakeholders, yet we know little about their accountability information needs. This New Zealand study captures these stakeholders’ perceptions of the background, financial and non-financial performance information they need from charities. It also reveals how, in addition to imposing reporting requirements, these key funders engage in ‘institutional work’ to ensure they receive appropriate accountability information.