Understanding governmental accounting change in a developing country context: the case of accrual-based accounting systems adoption by Indonesian local government

Citation

Marwata (2008), "Understanding governmental accounting change in a developing country context: the case of accrual-based accounting systems adoption by Indonesian local government", Journal of Accounting & Organizational Change, Vol. 4 No. 1. https://doi.org/10.1108/jaoc.2008.31504aad.002

Understanding governmental accounting change in a developing country context: the case of accrual-based accounting systems adoption by Indonesian local government

Article Type: Doctoral research abstracts From: Journal of Accounting & Organizational Change, Volume 4, Issue 1.

Understanding governmental accounting change in a developing country context: the case of accrual-based accounting systems adoption by Indonesian local government

Purpose - To shed some light on the way accounting technologies evolve in the context of public sector organizations in a developing country context.

Design/methodology/approach - This study empirically investigates the why and how aspects of governmental accounting change in the context of Indonesian local government. The dynamics of accounting change is explored by taking into account the importance of context, politics, and substance of accounting change. This study draws insights from new institutional theory in sociology to making sense of the empirical findings. The primary source of data is formal and informal interviews with those who are involved in the accounting policy setting at national level and those who are involved in the implementation process of new accounting systems at organizational level in two Indonesian local governments.

Findings - This study finds that fragmented institutional agents, state agencies and accounting profession, with varying interests and views are involved in the process of public sector accounting change policy setting. The variety of interests and views amongst those involving groups have contributed to the confusion in the implementation of the policies and to the complexity of accounting systems being developed at organizational level. Further, it finds that accounting change at organizational level is primarily driven by external forces including push factors such as new reporting requirements enacted by the central government, new systems promoted by consultants and academics, new demands for more transparency by the general public and pull factors such as loan inducements from funding agencies, technical assistance from donor agencies, and social and political recognition. Accounting change endeavor has also been facilitated by favorable internal factors such as the desire of the organizational elite to be a reputable government, the existence of motivated human resources both in terms of willingness and ability to convert accounting systems, and the existence of committed leadership. Also, the study finds that accounting change in the context of Indonesian local government has primarily been driven by the wishes of external institutions. The change has been viewed as a symbolic event in order to enhance the appearance of the organization. The change has also been treated as an isolated matter, unrelated to daily, organizational business. As a result, the newly established accounting systems are rather loosely integrated with other organizational systems and structures.

Research limitations/implications - This study is embryonic in nature and is situated in particular historical and spatial circumstances. There is a need to conduct further studies in other settings. Particularly, there is a need to construct more robust explanations of the substance of accounting change and the effect of relative powers of actors in the process of institutionalization of new accounting practices in the public sector.

Originality/value - This study offers a different angle in conceptualizing accounting change in the public sector, especially in a developing country context.

Research type - Case studyDiscipline area - Public Sector AccountingAwarded Institution - Monash University, AustraliaSupervisor - Associate Professor Manzurul AlamDOI - 10.1108/18325910810855833

MarwataDepartment of Accounting, Satya Wacana Christian University, Salatiga, Indonesia