An integrated model of IPSAS institutionalisation in Indonesia: a critical study

Abstract

PurposeThe aim of this study is to critically evaluate the institutionalisation of International Public Sector Accounting Standards in Indonesia.Design/methodology/approachThis case study approach relies on obtaining its data from document sources and interviews with relevant people and/or organisations involved in policy-making and implementation of IPSAS in Indonesia. To inform the study, we developed and used an integrated model of institutionalisation based on the work done by Dillard et al. (2004) and Dambrin et al. (2007).FindingsOur model shows that dissemination of new ideals and the transformation of these new ideals into new discourses were institutionalised at the economic and political level. However, the creation of a new [accounting]technique took place in the organisational field, instead of organisational level. The internalisation of IPSAS in the organisational field is characterised by limited use of IPSAS-based reports for making decisions. Overall the institionalisation of IPSAS in Indonesia is dominated by actors external to local governments.Research limitations/implicationsThe study’s results reflect the specific socio-economic and political contexts for a specific point in time.Practical implicationsPolicy-makers in developing nations should consider the applicability of IPSAS in accordance with the actual needs and capacities of their local governments.Social implicationsThe findings show that developing nations and international organisations have underestimated the technical and institutional issues of developing nations in the globalisation of IPSAS.Originality/valueThe study extends institutional theory by developing a new model to conceptualise the dynamic processes, the role of actors and outcomes of public sector accounting reforms in an emerging economy.