Weathering the storm: Accountability implications for flood relief and recovery from a local government perspective

This paper investigates the role of accounting and the nature of accountability from the perspective of local government managers in the context of multiple flood events. The flood events occurred in the State of Victoria, Australia during 2010‐11, and rural regions were the most severely affected by this natural disaster. The findings demonstrate that convoluted governance and extensive State and Federal Government funding arrangements resulted in some confusion among local councils and communities as to their eligibility for, and the timing of, financial support. Within this context, the study findings revealed how, as the first point of contact for local residents, small rural shires with limited financial and human capacity used accounting to address the impact of a natural disaster on a personal level.     

Downward accountability for a natural disaster recovery effort: Evidence and issues from Australia's Black Saturday

This study provides evidence on the nature and extent of downward accountability rendered by key government agencies and non-governmental organizations (NGOs) to victims during the extended period of recovery from Australia's 2009 ‘Black Saturday’ bushfires disaster. It also provides a critical assessment of the interplay between downward, upward (or hierarchical) and internal (or identity) accountability. It questions whether the concept of ‘downward accountability’ loses meaning when applied to the published special-purpose disaster recovery reports of the organizations leading the recovery effort. Document analysis is undertaken on the traits of downward accountability displayed in the text and images published in the disaster recovery reports of the controlling government authority, a government/NGO partnership coordinating the appeals fund and three separate participating Christian-denominated NGOs. These report traits include readability by, closeness to and empowerment of beneficiaries. Subsequent interviews with senior financial and communications executives of these organizations shed light on the motivation for the preparation of the recovery reports. The findings have implications concerning the problematization of downward accountability. The appearance of downward accountability traits in these reports appears to be an artifact of the motivation for upward and internal accountability. Moreover, downward accountability through the mode of charitable deeds-based recovery actions seems to be devoid of principal–agent expectations. For these reasons, in the context of a natural disaster, downward accountability does not sit well, conceptually, in a stakeholder-oriented accountability typology framework.     

ACCOUNTABILITY AND GOVERNMENTAL FINANCIAL REPORTING

Accountability is the cornerstone of Governmental Generally Accepted Accounting Principles (GGAAP) in the United States according to the Governmental Accounting Standards Board (GASB). This paper analyzes the implications of alternative definitions of the concept of accountability for GGAAP and for GASB. It also discusses the costs and benefits of accountability information, the effect of diverse users of governmental reports, and alternative mechanisms for achieving accountability in governments. Finally, a governmental accounting research agenda based on accountability is proposed for the future.     

公共受托责任、政府会计边界与政府财务报告的理论定位

公共受托责任的复杂性与会计系统的固有缺陷决定了单一的会计系统难以满足公共受托责任多元化的信息需求。会计系统在公共领域是该保持固有属性并优化其功能,还是应扩展功能以满足公共领域复杂的信息需求,必须进行抉择。政府会计边界概念在考虑公共受托责任复杂性的前提下,运用成本效益分析,结合系统设计原理界定了政府会计功能选择的范围,并明确了政府财务报告的理论定位。     

Towards the Harmonisation of Local Accounting Systems in the International Context

In recent years efforts to modernise and regulate public accounting systems have been carried out in most countries, driven essentially by the interest in establishing a Public Accounting capable of satisfying the required needs for attaining efficient management of public resources, as well as for demonstrating accountability to stakeholders. In this paper we aim to analyse the degree of local government accounting harmonisation, demonstrating in a general way that their accounting systems show very little homogenisation, accounting diversity being, in fact, one of their principal characteristics. In this context, we refer to the benefits and problems involved in reducing the differences between accounting systems and in increasing the comparability of financial reporting.     

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.     

PUBLIC SECTOR ACCOUNTING IN JAPAN MAINLY RELATED TO MUNICIPALITY

This paper is concerned with the development of Public Sector Accounting in Japan and is concentrated on Municipality Accounting. The paper deals with the philosophical aspect of local government and accountability first, and then it explores current debates on the reform of accounting systems in local government which have been developed both by the Local Autonomy Association and the Kobe Research Group. Attentions have been laid on CIPFA proposals for Capital Accounting in Local Authorities . Comparative studies on evaluation systems are focused in this paper.     

Ethics and accountability: from the for-itself to the for-the-other

Expanding global markets have resulted in renewed concern with accountability by transnational corporations and other economic agents. Reflections on economic accountability, however, often inadequately theorize necessary ethical presuppositions regarding the moral status of economic collectivities, including the scope of the moral community and the good that this community seeks. This essay addresses these ethical considerations. Taking as my starting point Schweiker's [Schweiker, W. (1993). Accounting for ourselves: accounting practice and the disclosure of ethics. Accounting Organizations and Society, 18(2/3), 231–252] claim that economic entities are properly accountable to a wider scope of good than their own by virtue of the accounts that accountants render of such entities, I argue that the discourse in terms of which the accounts are rendered serves to negate the very relation of obligation from which this accountability derives. Specifically, I argue that the discourse of neoclassical economics that informs accounting practice constructs the identity of the accountable entity such that it is obligated to pursue only its own good. Consequently, extant accounting practices are inadequate to meet the demands for accountability that are legitimately entailed by the act of rendering an account. I explore the implications of this conclusion for understanding economic accountability and related social accounting practices, and I propose the ethics of Emmanuel Levinas to establish a broader accountability on the part of economic entities.     

Reforming central government: An evaluation of an accounting innovation

This paper examines a significant accounting innovation in central government accounting – the introduction of Resource Accounting and Budgeting (RAB) in the UK. This innovation is studied through the lens of Rogers diffusion theory. The study setting is the Scotland Parliament. This research shows that, in the terms of diffusion theory, RAB can be classified as an accounting innovation. However, the implementation of RAB is problematic. While the reform of the UK central government system was initially sought as a mechanism to enhance democratic accountability, this paper shows that RAB does not connect with parliamentarians. The introduction of RAB flows as much from a managerial agenda as it does from the aim of democratic accountability.     

Budgeting and governing for deficit reduction in the UK public sector: act three ‘accountability and audit arrangements’

This paper explains how the UK central government has changed accountability and audit arrangements for local government in England, while retaining its approach to setting annual budgets within the context of multi-year spending reviews. It highlights how dismantling the institutions and processes that monitored outputs and outcomes for spending, such as public service agreements and comprehensive area assessment, meant that top-down accountability became focused overwhelmingly on financial conformance rather than organizational performance for local government. Supplementary reforms to increase the transparency or ‘visibility’ of public administration, and thereby enable greater bottom-up accountability, have resulted in a performance assessment system that is neither rigorous nor standardized. The overall result is a weakening of local accountability arrangements.     

Capital markets research and accounting standard setting

Accounting academics and practitioners have been known to question whether accounting research is as efficacious as it might be. This paper focuses on capital markets-based research in accounting and how its potential contribution to the wider regulatory process can be realised more fully. Examples used are: research on corporate regulation; the move to 'harmonise' accounting standards; accounting for R&D; accounting for goodwill; and equity accounting.     

ACCOUNTABILITY AND THE POLL TAX: THE IMPACT ON LOCAL AUTHORITY BUDGETS OF THE REFORM OF LOCAL GOVERNMENT FINANCE IN ENGLAND

In 1990 the United Kingdom government introduced major reforms to the system of local government finance in England. The most dramatic change was the replacement of domestic property taxation by a flat rate community charge, or poll tax. The government's principal argument for this reform was that it would enhance the accountability of local authorities to their electorates. This paper examines the nature of this accountability link, and develops measures of the extent to which the new arrangements have increased accountability. A model is presented which seeks to determine whether the changes in accountability have led to changes in the expenditure patterns of local authorities in the first year of the reforms. The results are negative, and this preliminary evidence therefore suggests that the accountability arguments for the reforms are spurious.     

Making imaginary worlds real: The case of expensing employee stock options

West [West, B. (2003). Professionalism and accounting rules. London: Routledge] and Chambers [Chambers, R. J. (1966). Accounting evaluation and economic behavior. Houston: Scholars Book Company] have provocatively argued that financial reporting has reached a state of near-total incoherence. In this paper, we argue that a source of this incoherence is the transformation of the US accounting academy into a sub-discipline of financial economics, a transformation in which accounting became a servant of the imaginary world of neoclassical economics. After noting the unusually prominent role of rules within the accounting profession, we describe the displacement of accounting’s centuries-old root metaphor of accountability by the metaphor of information usefulness, and situate that displacement within neoliberalism, a broader political movement that arose after World War II. Finally, we use SFAS 123R, the recently issued stock option standard, as a case study of the incoherence that West and Chambers assert. Through various issues – such as reflexivity, theory paradox, and unexplained questions of responsibility – we demonstrate the logical inconsistencies involved in SFAS 123F. The incoherence of stock option reporting rules raises serious questions about the information metaphor as a foundation for either individual rules or the standard setting process. The Financial Accounting Standards Board’s (FASB) attempts to make the imaginary world of neoclassical economics real have resulted in rules which are not defensible.     

Innovation in Euromarket hybrid funding instruments

This paper considers case studies of the use of innovative hybrid funding instruments—which have features of debt and equity issued by UK companies in the Euromarket. It considers why these instruments were developed and how they utilise the ‘grey areas' in accounting and tax regulations to achieve what managers perceive to be the main benefits of each. One of the major influences on the choice of funding instruments for a number of companies involved in acquisitions in the late 1980s was their accounting and tax treatment. the search was for cost effective finance which at the same time contributed a premium to blunt the purchased goodwill write-off. Group reserves have no legal significance but goodwill write-offs can have consequences for a group constrained by borrowing restrictions (based on its balance sheet figures). the concern with the shape of the balance sheet and the ratios calculated using these figures, combined with perceived beliefs about the tax advantages of borrowing led to the development of the Euroconvertible Preference Share issues by subsidiary companies in 1989. the tax authorities removed the attraction of this instrument to issuers. However, the innovative process continued and similar accounting and tax explanations influenced the design of another major category of hybrid—the Convertible Capital Bond. Accounting regulators have reacted to this hybrid by producing new guidelines which have removed its benefits and therefore its attraction to companies. Nonetheless, the process of innovation continues and a new instrument—the Irredeemable Convertible Bond—has been developed.     

Over-Complexity in Accounting Standards and the Emerging Duopoly of US GAAP AND IFRS

US accounting regulation has been criticised for maintaining an over-complex "rules-based" approach, cited as the partial cause of significant failures in corporate governance. US regulators state that they are now on a pathway to a more "principles-based" approach, but the International Accounting Standards Board (IASB) claims superiority in this approach already. The recent efforts of the US Financial Accounting Standards Board (FASB) and IASB are examined to see if either claim is clearly supportable. As these authorities appear to be in the process of creating a world accounting standard-setting duopoly, unresolved problems involving over-complexity are likely to be transported to other countries, including Australia.     

A European view on the legitimacy of accounting procedures: Towards a deliberative-accountability framework for analysis

Accounting rules affect fundamental areas of social interaction encompassing groups that have diverse and conflicting interests regarding financial reporting. In the absence of a coherent social choice theory, concepts of legitimacy can be used to assess the acceptance of accounting standard-setting processes and their resulting norms. In this paper, we analyze the standard-setting process in Europe. Accounting rules in Europe are developed in a two-stage process involving both private standard-setting and public rule-making. From a structural perspective, the European Union (EU) is well positioned to develop legitimate accounting procedures. However, the original purpose and the ensuing legitimacy of its control mechanism are jeopardized when EU structures are used and sometimes abused for policy formation and the creation of EU-IFRS.     

Management Accounting Research: 20 years on

This Editorial Report charts the progress of Management Accounting Research in its second decade. Starting by noting that in 2009 there were almost a quarter of a million downloads of papers from Management Accounting Research, it describes the range and diversity of the papers published in the Journal, their topics, research settings, and the theories and research methods used. It emphasises that the editors strongly encourage the use of a broad range of theories and research methods, and they want such diversity to continue to be a defining feature of the papers published in Management Accounting Research in the future. Finally, they urge management accounting researchers to undertake innovative research and to be both original and creative, thereby avoiding the homogeneity and narrowness which seem to be an increasing feature of accounting research more generally. In this way Management Accounting Research will continue to be the major source of leading edge research in the field of management accounting.     

The effect of cooperative learning on student perceptions of accounting in the principles courses

This paper describes an experiment that investigates the effect of cooperative learning techniques on introductory accounting students' perceptions of accounting. We administered identical survey instruments measuring students' perceptions of accounting to all accounting principles students at the beginning and end of a semester. Instructors used cooperative learning techniques in one-half of the sections (experimental), and a traditional lecture format in the other sections (control).We compared the pretest and posttest student responses for the experimental and control sections. For Accounting Principles I, 40% of the responses exhibited differences between experimental and control sections that were consistent with a cooperative learning effect. No effect was found for Accounting Principles II. An exploratory factor analysis of Accounting Principles I data showed that the factor “student interest in learning accounting” accounted for most of the differences that were consistent with cooperative learning effects. Also, students in the experimental sections of Accounting Principles I performed marginally better on a common final exam than students in the control sections.Overall, students began their introductory accounting courses with positive perceptions of accounting. Students in sections using cooperative learning techniques were, on average, more likely to maintain those positive perceptions than students in sections using the traditional lecture format.     

The new global accounting community: Rationale for dialogue to establish its accountability?

The reputation of the accounting community is an important intangible asset. The community persistently builds its reputation through disclosure of reputation signals that crystallize its status with the commercial social system [Riahi-Belkaoui and Pavlik, 1992; Raar J. Beyond ethics: a community platform to secure moral integrity. Australian Accounting Review 2006;16(1):41–50]. Therefore, as a community in the global village, it is an institution of accountability, which in turn is dependent on honesty and trust (Lee, 1995). The intention of this conceptual paper is to provide discourse that induces questions for reflection in the call for values underpinning the integrity and ethical stance of the profession. To an extent ethical codes assist, however in an international professional community the self-governance procedures and investigations of a local professional body may now be outside its geographical jurisdiction. Walker [Walker RG. The ASRB: policy formation, political activity and research. Paper presented at Accounting Association of Australian and New Zealand (AANZ) annual conference in Sydney; August, 1985] suggests that accounting rules are only symbolic behaviour unless compliance is monitored, and sanctions are imposed [Walker RG. The ASRB: policy formation, political activity and research. Paper presented at Accounting Association of Australian and New Zealand (AANZ) annual conference in Sydney; August, 1985. p. 12]. The internationalisation of accounting standards appears to present an opportune period in the evolution of a self regulatory accounting profession to consider the issues of moral values and integrity and ask the question, what does this international profession stand for?     

Rising accountability of Australian non-government schools

This paper reflects on the contested space of school funding in Australia and with it accountability requirements for non-government schools. With the significant growth of Australian government schools has come substantial visibility and electoral power. Yet, over the past 20 years, the Australian central (Commonwealth) government has used its countervailing power to expand its accountability requirements. Possible lessons for the UK situation are suggested.