Abstract
This study aims to understand an accounting system change of a local government in Indonesia. This study is a qualitative and interpretive case study. Data collection is done through interviews of key actors who were involved in the process of accrual accounting institutionalization and documentation.The result of this study shows that the institutional isomorphism occurs on the implementation of accrual accounting at the local government. Coercive isomorphism are shown by the finding that the adoption of accrual accounting was affected by the central government, namely by issuing the regulations such as Government Regulation no. 71 of 2010 and Regulation of the Minister of Home Affairs no.64 of 2013. Normative isomorphism was found on the findings of consultant and academic involvement in the implementation of accrual accounting. Mimetic isomorphism was found when the local government conducted benchmarking to the other local governments that became the best practice in the accrual accounting implementation in Indonesia. In reality these three forms of institutional mechanism were interact each other, then contribute in influencing the practices and the actors during the accrual accounting institutionalization process in the local government.
Highlights
Government Regulation Number 71 Year 2010 concerning Government Accounting Standards mandates accrual based accounting to be implemented in Fiscal Year 2015
From the perspective of institutional theory, legitimacy is a condition that reflected cultural harmony, normative support, or conformity with applicable laws and regulations (Scott, 1995). This condition was apparent in the process of accrual accounting institutionalization in the local government which became the setting of this study, where in reality it was found that the three forms of institutional mechanisms that was coercive isomorphism, normative isomorphism and mimetic isomorphism interacted with each other, contributed in influencing practices in the field and the actors involved during the institutionalization process of accrual accounting
As we know that the process of institutionalization is caused by some encouragement, this research has found that in the process of institutionalization in the local governmental environment which becomes the setting of this research appears isomorphism symptoms
Summary
Government Regulation Number 71 Year 2010 concerning Government Accounting Standards mandates accrual based accounting to be implemented in Fiscal Year 2015. In order to support the policy at the local government level, the Regulation of the Minister of Home Affairs Number 64 Year 2013 on the Implementation of Accrual Based Government Accounting Standards in Local Government was issued. In Government Regulation No 71 Year 2010, it is mentioned that accrual accounting is the best practice in the international world and needs to be applied in order to improve the quality of government financial reporting information, which is intended to produce better performance measurement as well as facilitate more transparent and accountable financial and asset management. When accrual accounting is applied to a government organization, the organization must adapt the accounting techniques of financial administration by beginning to recognize and record the effect of transactions and other events at the time the transactions and events occur, regardless of when cash or cash equivalents are received or paid. The accounting techniques will be repeated and become part of the routine received by the organization and changes occur (Burns and Scapens, 2000; Kober et al, 2010; Siti-Nabiha and Scapens, 2005)
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