MONITORING AND AUDITING VALUE FOR MONEY IN THE UK: THE SCOPE FOR QUANTITATIVE ANALYSIS

This paper argues that there is considerable scope for the introduction of quantitative techniques into the planning and conduct of VFM audit in the UK. A new development in public sector corporate planning is described and criteria for desirable performance indicators are given. VFM assessment problems arising out of vague legislation are illustrated using farm income support policy. The paper concludes that the scope for the use of techniques from economics, management science and psychology will not be properly realised without extensive reform in management research and education.     

An Analysis of Submissions on Proposed Regulations for Audit and Assurance in New Zealand

After numerous collapses of finance companies in New Zealand, and widespread losses by investors, self‐regulation of the auditing profession was no longer considered adequate or acceptable internationally. The New Zealand Government sought to restore public perceptions of audit quality and investor confidence in the financial markets with proposals to change existing accounting standards and audit and assurance requirements. The proposals included a review engagement for some entities, and imposing the force of law on auditing standards. We analyse the public submissions on the auditing and assurance aspects of these proposals. Many respondents object to the proposal, requiring small public sector and not‐for‐profit entities to obtain review engagements, and to give auditing standards the force of law.     

AN EPISTEMIC COMMUNITY AS INFLUENCER AND IMPLEMENTER IN LOCAL GOVERNMENT ACCOUNTING IN AUSTRALIA

This paper explicates the dual role of epistemic communities as influencers of accounting policy within regulatory space and as implementers who effect change within the domain of accounting. Set within the context of New South Wales in Australia, and the challenge of the financial sustainability of its local councils, the study was informed by documentary sources, and used data from interviews and a survey. Accounting and finance professionals, as an epistemic community, played a pivotal role in formulating accounting policy and in embedding fair value measurement of infrastructure assets.     

MEETING THE CHALLENGE: ACCOUNTING FOR CHANGE

This paper examines the challenge mounted against long established management accounting practices by Kaplan (1983) and Johnson and Kaplan (1987) from a public sector perspective. It seeks to determine the extent to which this challenge to the private sector - of a lack of innovation in management accounting practice in the face of a rapidly changing environment - holds true for public sector organisations. Furthermore, by drawing on substantive studies of management change in both the private sector and the public sector, this paper assesses (a) the tsunsfeubilitv of ideas and practices from the private to the: public sector (b) the need to study process of change and (c) the potential role of strategic management accounting as an innovative practice in addressing the agenda for change which confronts the public sector.     

ACCOUNTABILITY AND VALUE FOR MONEY IN PRIVATE FINANCE INITIATIVE CONTRACTS

Within the context of New Public Management (NPM), successive UK governments have claimed that PFI projects provide more accountability, and arguably, more value for money (VFM) than conventional procurement for the public ( HM Treasury 1995, 2000, 2003a and 2003b ). However, recent empirical research in the UK on PFI has indicated its potential limitations for accountability and VFM ( Broadbent, Gill and Laughlin, 2004 ; Edwards, Shaoul, Stafford and Arblaster, 2004 ; Shaoul, 2005 ; and Ismail and Pendlebury, 2006 ) albeit these are based on either published accounts or a limited number of key stakeholders. This paper attempts to partially redress this gap in the literature by presenting an interesting case of the impact of PFI on accountability and VFM in Northern Ireland's education sector. The findings of this research, based on forty two interviews with a wide range of key stakeholders, suggest that stakeholders have different and often conflicting expectations and the actual PFI accountability and VFM benefits are much more obfuscated than those claimed in Government publications.     

ACCOUNTING FOR (A) PUBLIC GOOD: PUBLIC HEALTHCARE IN ENGLAND

This paper reviews accounting technologies used over recent decades in the National Health Service: a public service (good) and the accounting for public interest (good) therein. The trends in NHS accounting are considered in the context of the defining characteristics of a modern public service. The accounting technologies, collectively known as New Public Financial Management (NPFM), are integral to wider public service reform. The overview of accounting technologies in context attempts to draw out some of the deficiencies or apparent mismatches in accounting technologies and public service reform.     

Frontiers of Non-Financial Performance Reporting in New Zealand

In 1989, legislation in New Zealand introduced requirements for non-financial performance information in the public sector to be reported and audited. This paper describes the initial responses of the Institute of Chartered Accountants of New Zealand and the Audit Office to this challenge and examines their further development following a decade of experience.     

Frontiers of Non-Financial Performance Reporting in New Zealand

In 1989, legislation in New Zealand introduced requirements for non-financial performance information in the public sector to be reported and audited. This paper describes the initial responses of the Institute of Chartered Accountants of New Zealand and the Audit Office to this challenge and examines their further development following a decade of experience.     

Jurisdictional Competition Between Private and Public Sector Auditors:The Case of the Danish Certified Public Sector Auditor Qualification

Abstract: This paper explores the apparent paradox that while public sector auditors have become more powerful by claiming performance auditing expertise and linking this to New Public Management reforms, the same reforms have provided an opening for competition between private and public sector auditors. In Denmark, the competitive relation has led to a jurisdictional dispute between public and private sector auditors in which the former have developed a special qualification for public sector auditors. The paper analyses the development of this qualification using Abbott's (1988) theory of the system of professions, thus focusing on how the involved groups have attempted to build networks of support for their competing jurisdictional claims of expertise. The case contributes to knowledge about the potential for development of a distinct public sector auditor identity. The case suggests that to develop such an identity and gain professional recognition, public sector auditors need to convince parliaments, standard‐setting bodies and universities that a public sector auditing qualification serves as a solution to some of their problems, too.     

Polish Public Sector Accounting in Transition: Evidence From the Mid 1990s

The Polish public sector is still under transition that began at the turn of 1989/1990. In the mid-1990s a new significant development in public sector accounting took place. A substantial differentiation of the accounting system was introduced. New elements and relationships appeared, along with general domination of the Accounting Act, tax regulations and the Budgetary Law. The system of basic regulation of accounting and reporting has also changed. There were also some changes in the auditing system. The enactment in 1994 of the Accounting Act has brought to light the political character and political importance of financial information in Poland. This paper presents the current mode of public sector accounting regulation and its relationship with the overall system of Polish accounting regulations. Much attention has been devoted to specific principles of public sector accounting and financial reporting in the public sector, and to government accounting. Some political contaminations and consequences of the current accounting system have been pointed out.     

Commentary: Performance Audit of PPPs – Getting the Basics Right

Performance auditing (PA) is an important vehicle for assessing Value for Money (VFM) of Public‐Private Partnerships (PPPs), as well as providing assurance to the Parliament and to the public about the accountability for the supporting strategic and operational frameworks. Experience to date with PPPs in Australia has been limited and mixed in terms of results. Few projects have reached the mature stage, let alone been completed. It has been suggested that we can learn from the audit approaches and systems developed by the National Audit Office in the UK. Australian Audit Offices need to ensure that they have robust PA/VFM auditing systems, analytical methodologies and tools in place to undertake quality evaluations at various stages of a PPP, but experience to date at federal and state levels also indicates that there is still a lot to do to get the basis elements of PPPs “right”.     

GST Compliance in the New Zealand Property Sector

Different schemes used in property transactions raised concern in New Zealand that insufficient goods and services tax (GST) was being paid on the sale of property. To improve tax compliance in the property sector, various measures have been undertaken. Tax auditing of property transactions has been strengthened since 2007 and in 2009 the government issued a discussion document that proposed a legislative solution to some specific GST problems. Moreover, several court cases have ruled against abusive GST schemes. This paper estimates the impact on GST collection and compliance in the property sector following these actions. The findings suggest that GST compliance in the property sector has increased.     

THE DEVELOPMENT OF CONCEPTUAL FRAMEWORKS OF ACCOUNTING FOR THE PUBLIC SECTOR

This paper offers a review of the conceptual framework projects that have been done by, or on behalf of, accounting standard-setting bodies, and that have concerned themselves with public sector accounting. Developments since 1966 in North America are the primary focus, although the UK and New Zealand are also explicitly addressed. The major theme identified is the ubiquity of the user/user needs approach, despite the continuing lack of evidence about user needs. The paper tries to explain this and concludes that standard-setting bodies have used these conceptual frameworks to establish their own legitimacy, by appealing to the public interest.     

The Impact of IFRS Adoption on Public Sector Financial Statements

Following a sector neutral approach to standard setting for about a decade, New Zealand adopted International Financial Reporting Standards (IFRS) for profit‐oriented entities and all other sectors including the public sector, from 2007 with the option to adopt early in 2005. Some studies have examined the impact of IFRS adoption on the accounts of profit‐oriented entities and found that this change had a significant impact on assets, liabilities and equity. This study examines the impact of adoption of IFRS on New Zealand public sector entities’ financial statements. We analyse and compare the reconciliation notes of IFRS and pre‐IFRS New Zealand Generally Accepted Accounting Principles (NZ GAAP) reported in the first IFRS annual reports of all New Zealand public sector entities. The results indicate that there have been some significant increases in assets and liabilities, and significant decreases to overall equity in some sub‐sectors of the public sector. The primary causes of such changes were recognition of employee entitlements (IAS 19) and recognition of derivative financial instruments (IAS 39) for many public sector entities, as well as remeasurement of deferred taxation for public sector commercial enterprises (IAS 12). In addition, public sector entities made many reclassifications between current and non‐current financial statement elements that did not impact on the aggregate balances of the entities’ balance sheets. In general, the findings of this study are similar to findings of studies that examined the impact of IFRS on private enterprises. The findings of this study contribute to the understanding of the implication of IFRS adoption and might be useful to policy makers and regulators who are currently reviewing the applicability of IFRS to public sectors in Australia and New Zealand and other countries.     

Infrastructure Accounting for Local Authorities: Technical Management and Political Context

Internationally, there has been mounting interest in the subject of accounting for infrastructure assets and their deterioration. In New Zealand, the adoption of full accrual accounting across the public sector from 1989 has meant that local authorities have been grappling for some time with the problem of how best to account for these assets in a manner which is relevant for both managers and elected representatives. This paper reviews methods of accounting for infrastructure in New Zealand local authorities, and explores how infrastructure assets and related expenses might be accounted for in a manner which is consistent with both the New Zealand accounting profession's conceptual framework and the requirements of democratic decision making over the allocation of resources.     

美国公共政策审计评估:分析与借鉴

20世纪70年代末兴起的新公共管理运动,其核心特征是对公共部门绩效及其责任的高度关注,这一运动对公共部门管理的理论和实践产生了深远影响,推动了预算管理制度的改革,同时为公共政策评估理论和实践的发展奠定了基础。经过近百年的发展,美国审计署作为独立监督部门,通过有效的公共政策审计评估,逐渐在国会和联邦事务中发挥着日益重要的作用。本文通过分析GAO开展公共政策审计评估的特点,提出了我国国家审计应借鉴的经验,开展公共政策审计,实现国家审计"免疫系统"功能的建议。     

ACCOUNTING STANDARDS FOR THE PUBLIC SECTOR IN AUSTRALIA

The need for better financial reporting by public sector entities as a means towards greater accountability has been widely canvassed. This paper discusses the development and application of accounting standards in Australia in this context. The responses of the accounting profession, through its standard setting process, and of the Commonwealth and several State governments are described and the conclusion reached that these developments will mean significant improvement in the information content of public sector financial reports.     

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.     

NON-PROFIT PERFORMANCE INDICATORS IN THE PUBLIC SECTOR

This paper examines the scope for validly using non-profit performance indicators in the public sector and identifies several decision-relevant roles for such indicators in the process of policy optimisation. It argues that many of the desirable qualitative characteristics of financial accounting data identified in the FASB's conceptual framework project are both relevant, and in need of strengthening, when the profit concept is extended to a more general performance concept which also includes benefits to consumers of the output of the public sector. The need for such strengthening is examined in both nationalised industries and the non-trading public sector.     

The Role of Auditing in Corporate Governance in Australia and New Zealand: A Research Synthesis

Corporate governance is of growing importance in Australia, New Zealand and all over the world. Corporate governance interacts with auditing and it is useful to understand how corporate governance and auditing affect companies. A related issue is whether better governance is a substitute for auditing or a complement. Previous studies of that issue have had mixed results. This review article provides a synthesis of Australian and New Zealand research about corporate governance and auditing that assesses what has been found and examines issues that can be explored using multiple studies. We conclude that despite extensive research, there is still considerable uncertainty about how corporate governance mechanisms are related to auditing and how auditing is associated with corporate governance. We conclude that recommendations for better governance (beyond a minimum level) are not yet supported by evidence. The results are intended to be helpful in providing advice about policy in Australia and New Zealand, and in determining directions for new research.