Process Of Accounting Change Research Articles

Collective institutional entrepreneurship for the EPSAS programme: The missing link

IMPACT Three categories of institutional entrepreneurs are potentially capable of accomplishing multi-level accounting change processes, such as the issuing of European Public Sector Accounting Standards (EPSAS): the supranational, national and subnational. This article shows that, if the mediating role of national institutional entrepreneurs at the interface between supranational and subnational institutional entrepreneurs is limited, international accounting harmonization halts. The lessons in this article will be of particular value to accounting standard-setters and policy-makers in the field of public sector accounting.

Mudança nas regras e rotinas da contabilidade gerencial em operações de fusão e aquisição,

ABSTRACT This study aims to understand the process of changes in management accounting rules and routines in merger and acquisition operations. The case provides empirical evidence on the post-acquisition context and the process of changes in management accounting in acquired companies, considering that the acquiring company tends to interfere through the coercive introduction of new management control systems. The research adds empirical evidence on the role of organizational principles established by the acquirer in the process of changes in the rules and routines in an acquired company. A change in management accounting is a complex process that involves the interaction of elements inside and outside organizations to promote organizational efficiency. The research evidence corroborates the literature by finding that changes in management accounting are motivated by the search for economic efficiency in acquired companies. However, the success of the change in rules and routines depends on various institutional elements that involve organizations, such as the coercive nature of the change driven by the new owners. The research is descriptive in nature and uses a qualitative approach, adopting a case study in a ceramic tiles company that underwent an acquisition operation. The acquisition operation brought a new philosophy of individual performance optimization that drove the institutionalization of the performance evaluation system in the acquired company. The new system was configured as a formal management accounting artifact focused on the individual. The results provide contributions for organizations, managers, and consultants that wish to implement management accounting artifacts in acquired companies by highlighting relevant elements from the institutional field and field of action for the management accounting change process.

Relational approaches to accounting change: the Stati as means of mediation in the Kingdom of Naples

ABSTRACT This study investigates accounting change processes by examining the creation and implementation of new accounting tools—known as Stati—to plan and monitor local finance during the period of 1611–1633 in the Kingdom of Naples. The Stati arose among several measures in this vast peripheral State of the Spanish imperial system to address problems concerning financial and material support, given constant Spanish war campaigns. The accounting change investigated in this research involved 2000 municipalities and started an ongoing dialogue, which laid the foundations for a new relationship between the central government and local communities. The study aims to ascertain how specific contextual and cultural features shape the accounting change process. It employs the Middle Range Theory (MRT) of Broadbent and Laughlin and finds that the Kingdom of Naples underwent a successful change known as reorientation through boundary management. The results highlight how the successful change took place beyond the intrinsic potential of the proposed technical innovation, showing how the suggested tools were conceived, designed, adapted, implemented, and shared.

Management accounting change as an amplifier of a leadership dispute: an ethnography of convergent and divergent leader–follower relations

PurposeThe purpose of this paper is to explore the role of leadership in management accounting change processes and outcomes.Design/methodology/approachThe paper draws on an ethnographic study in a Southern European company and mobilizes leader–follower relations as a method theory to analyse the observations.FindingsThe findings show how a leadership dispute between two top managers can be amplified during the management accounting change process and percolate throughout an organization. The authors identify five contested areas where the role of accounting amplifies the leadership dispute by unfolding its reach to other organizational actors. The leadership dispute can shape and reinforce a fragmented organization, with some organizational members creating convergent leader–follower relations while others divert and fragment with an increased turnover. This amplification can lead to unexpected outcomes of the change process in terms of how and by whom accounting is performed.Research limitations/implicationsThe authors propose the study of leadership and followership as an important but, to date, largely neglected theme in management accounting research.Originality/valueIn contrast to the prior management accounting literature, the paper departs from a leadership-centric and role-based approach and employs a co-constructionist and relational approach to leadership and followership to analyse management accounting change. In addition, it applies and extends Alvesson's (2019a) theory on “divergent relationalities” between the presumed leaders and followers. In doing so, the paper also adds to the leadership field by theorizing and integrating the situation of a leadership dispute in this novel theoretical framework.

The impact of accounting disturbances on organizational micro-practices in the schools' sector in England

PurposeThis paper considers the nature and effect of accounting disturbances on organizational micro-practices in three secondary schools in England. A close application of a developed model of Habermasian colonization provides a framing for both the ways in which accounting is implicated in organizational change and the effect of accounting disturbances on organizational micro-practices.Design/methodology/approachQualitative field studies at three secondary schools were used to gather empirical detail in the form of interview data and documentary evidence. A total of 24 semi-structured interviews were conducted with teachers and bursars.FindingsAccounting disturbances that were constitutive-transactional in nature had the greatest influence on organizational micro-practices. Behavioural responses to accounting disturbances can be organizationally ambiguous, subtle and subject to change over time.Research limitations/implicationsMore field studies are needed, and there is scope to develop a longitudinal perspective to better understand the impact of accounting disturbances over time.Originality/valueBy framing the processes of accounting change using a developed model of Habermasian colonization, contributions are provided by illuminating aspects of both the processes of accounting colonization and the impact of accounting on organizational micro-practices. The findings also add to prior appreciations of reciprocal colonization, creative transformation of accounting disturbances and how accounting can be enabling.

Legitimating accounting change in charities: when values count more than regulation

PurposeThis paper seeks to explore the way charity accountants understand, interpret and legitimate or delegitimate the introduction of accounting and reporting changes (embedded in the extant charity statement of recommended practice), before these are actually implemented.Design/methodology/approachDrawing on 21 semi-structured interviews with accountants in large UK and Republic of Ireland charities, the manner and extent to which forthcoming changes in charity accounting are legitimated (justified) or delegitimated (criticised) is explored.FindingsAcceptance of accounting changes in the charity sector by formal regulation may not be necessary for future required adjustments to practice to be legitimated. Using interviews carried out before the implementation of required changes, the results suggest that other factors, such as national culture, identity and mimetic behaviours, may play a major role in the homogenisation and acceptance of accounting and reporting rules. In particular, it is argued that mimetic pressures can be much more influential than regulative pressures in legitimating change in the charity sector and are more likely to lead to the embedding of change.Originality/valueThe contribution of this paper is threefold. First, it explores rhetoric and legitimation strategies used before changes are actually implemented. Second, it contributes to filling a gap in charities’ research related to intra-organisational legitimation of managerial and accounting changes, illustrating institutional-field identity at work to preserve shared organisational values and ideas. Finally, the research illuminates the importance of particular contextual pressures and individual legitimation arguments during accounting-change processes.

Accounting for community building: the municipal amalgamation of Milan in 1873–1876

ABSTRACT This study analyses the accounting change that occurred as a consequence of the amalgamation of the municipalities of Milan and Corpi Santi in the years 1873–1876 and sheds light on the role played therein by accounting information. To explain the process of accounting change, the study adopts institutional theory, in particular, coercive isomorphism and the processual approach of Dawson. While coercive isomorphism shaped the process of municipal amalgamation, innovation in accounting practices also took place, greatly contributing to building the sense making of the new community. The accounting innovation consisted in the use of cost accounting logic to allocate revenues and expenditures between the two municipalities that in the end favoured the amalgamation and overcame the mandatory separation of published accounts. The study presents evidence that leading elected councillors and the chief accountant bolstered the process of accounting innovation. Apart from external organisational pressures posited by institutional theory, we suggest that, to explain accounting change within organisations, more emphasis should be given to the role played by individuals and contrasting interests during the institutionalisation process.

The processes of accounting changes as emerging from public and fiscal reforms

PurposeThe purpose of this paper is to explain the emergence processes of accounting change in the Jordanian Ministry of Finance as well as the Jordanian public sector within its socio-economic contexts, as brought about by public and fiscal reforms. The study explains the ways in which accounting change dynamics can emerge on the basis of interaction between “external” origins and “internal” accounts; which identifies that accounting is both shaped by, and shaping, wider socio-economic and political processes.Design/methodology/approachThe paper uses an interpretive case study approach. The study adopts institutional and structuration theory as a theoretical lens and uses triangulation in data collection, including interviews, observations and documents and archival records.FindingsThe paper concludes that the new budgeting systems together with the Results-Based Management emerged as a result of interaction between “external” origins and “internal” accounts. It also highlights the interaction between these levels from one side, and the accounting and organizational change from the other side. The study confirms that factors other than economic may also play an influential role in the emergence of accounting change. It also concludes that there is a radical change of accounting systems in the case study (Ministry of Finance), which is not only a cosmetic change in accounting but is also represented in the actual working practices. The study also confirms that accounting is not a static phenomenon, but one that changes over time to reflect new systems and practices.Research limitations/implicationsThe paper has important implications for institutional research on accounting change and public sector reforms in responding to recent calls to bridge the gap between the extra- and intra-organizational levels of analysis. Hence, it has essential implications for the way in which successful change can be defined in accounting and organizational change literature. It also identifies that management accounting is both shaped by, and shapes, wider socio-economic and political processes, which has important implications for the methods of studying management accounting change.Originality/valueThe paper is one of the few case studies in the accounting literature to analyze the practical issues organizations face when changing their method of budgeting as influenced by public sector and fiscal reforms. The study contributes to both accounting literature and institutional theory by providing further understanding and “thick explanation” of the dynamics of accounting change in the public sector.

The Diffusion of Accounting Innovations in the New Public Sector as Influenced by IMF Reforms

This paper aims to explain the diffusion of management accounting innovations within the public sector in Jordan as influenced by IMF reforms. It is concerned with the diffusion of management accounting systems viewed as a process of actor-network building and translation. The paper presents an interpretive case study by drawing on Actor-Network Theory (ANT). The aim is to better understand the nature of accounting systems. The study recognizes that accounting innovations in Public Financial Management over the last decade were central to the rise of the New Public Management (NPM) doctrine and its associated ideas of Results Based Management (RBM) and public accountability, of which accounting is a key element. The study also concludes that the diffusion process implied three isomorphic interests; i.e. it created pressure for similar reforms and structural changes in many governmental aspects, especially the ways of thinking and doing. It thus provides a discernible conclusion through exploring the processes of accounting change as influenced by the tenets of ANT. Like Chua (1995), it has examined accounting change as a process of ‘fabrication'. Accounting innovations are constructions (Andon et al., 2007), often built on a wide array of social, economic and political factors. There have been several studies of the public sector transformation following IMF reforms but this paper has a different focus: the diffusion and adoption of management accounting systems within the new public sector. The paper discusses the findings of an interpretive case study, which is Ministry of Finance (MOF) in Jordan. The results of the study indicate that diffusion and adopting of accounting innovations by MOF is largely affected by the government influence, and these innovations usually occurred “beyond the enterprise” as well as within it. The study contributes to both accounting literature and Actor-Network Theory by providing more understanding and explanation about the dynamics of accounting innovations in the public sector. This paper has interesting findings, but also points to the need for more studies about the diffusion of accounting innovations in the public sector.

Developing appreciation of micro-organizational processes of accounting change and indicating pathways to more ‘Enabling Accounting’ in a micro-organizational domain of research and development

The paper contributes by developing and refining the critical theoretical framing of organizational processes implicating accounting change. This includes articulating how accounting can become more ‘enabling’ in a dynamic micro-organizational context. The latter articulation reflects a critical theoretical appreciation and mobilization of the construct ‘enabling accounting’ that begins to contextualize and reconcile aspects of differing usages of this construct in the literature. In framing organizational processes implicating accounting change, the paper furthers understanding of accounting colonization around categories building upon Laughlin (1991) and related studies, including work seeking to develop Laughlin (notably Tucker, 2013, and the Social Network Theory he promotes). Change pathways implicating colonization are in this respect seen as shaped by structural, relational and social mechanisms. The theoretical framing advanced helps to illuminate aspects of colonization processes that facilitate, as well as hinder or counter, meaningfully enabling dimensions of accounting. This enhances the critical theoretical appreciation of colonization in terms of a more complex evaluation. The theorizing is fleshed out and developed through an action research project conducted at the Research and Development (R&D) site of a multinational corporation in France during the implementation of a performance measurement system (PMS). In theorizing accounting colonization and dynamics of an enabling accounting in an R&D setting, we add to prior appreciations of the relation between creative, innovative, ostensibly intuitive and unstructured processes, and, systems of financial control.

The changing role of accounting: From consumers to shareholders

From the view of accounting as a social, political and institutional practice, this study examines the processes of accounting change as a State-sponsored consumer co-operative transformed to a private sector company pursuing profitability and value creation for shareholders. Accounting policy and practice were important aspects of the institutional and regulatory logics as the organisation changed from an entity focused on community service obligations to one that was profit driven. The State was the main factor/agent enabling this change. We frame our study within institutional theory and the political economy of accounting. We use institutional theory to inform our understanding of the institutional terrain and the political economy of accounting to understand the power and coercion of the State. Accounting rules and practices were co-opted to provide legitimacy, resistance, institutional logic, coercive change, and to redistribute wealth and power in society.

Accounting Practice In North Borneo: Changes Within 1881-19411

The dynamic of accounting practice as part of social system is acknowledged. It interacts with environment to respond to environmental pressure and the ever changing needs of enterprise. This has extended the understanding of accounting from a mere technical and neutral practice to a socially and politically related activity. As such efforts have been devoted to understand how accounting changed and developed over time in public and private sector. Historical investigation is getting popular in an effort whereby accounting development is narrated through societal development concerning social, economical and political phenomenon. This is particularly important in the context of public sector whereby historical aspects of accounting practice describe previous practice, explain the existing practice, and prescribe the future practice of accounting. The mobilisation of accounting practice in social, economical and political phenomena describes and provides informative and authoritative evidence on the relationship of accounting to its environment and consequently on how accounting change occurred. This could lead to a prescription, practically, on how to manage and harness accounting change. This paper presents evidence of such a claim through a historical investigation on accounting change phenomena during the colonial era in North Borneo. Such a comprehensive investigation that covers the period of 61 years (1881-1941) provides a thick description to understand the previous practice and how it influences the accounting in practice currently. Extensive review on archival documents in the Archive Department of Sabah illuminates evidence of accounting change process during the period under study. Keywords: Accounting changes, history, North Borneo, imperialism, colonialism, British North Borneo Chartered Company.

GAAP convergence or convergence Gap: unfolding ten years of accounting change

Purpose – The purpose of this paper is to add to the literature on accounting change in explaining a decade-long effort by the FASB and IASB to develop a set of global accounting standards accepted by markets worldwide. This research studies the effort as one of “convergence” in accounting standards and aims to bring theoretical and empirical clarity as to how we can conceptualize the notion of convergence. Design/methodology/approach – Through a longitudinal study of 23 key FASB-IASB projects undertaken between 2002 and 2011, this paper analyzes processes of accounting change using a blend of institutional theory and political economy. A process perspective provides a method to unfold variants of accounting change by identifying patterns that help us to understand the conditions for and characteristics of convergence. Findings – The author highlights specific variants of accounting change observed during the convergence effort – direct emulation, difference reduction and progressive redesign – as analogo...

GAAP Convergence or Convergence Gap: Unfolding Ten Years of Accounting Change

This paper adds to the literature on accounting change in explaining a decade-long effort by the FASB and IASB to develop a set of global accounting standards accepted by markets worldwide. This research studies the effort as one of “convergence” in accounting standards and aims to bring theoretical and empirical clarity as to how we can conceptualize the notion of convergence. In doing so, it informs the global standard-setting community of the evolution of convergence and the factors which impact that evolution by revealing the influence of various institutions, actors and events over time. Through a longitudinal study of 23 key FASB-IASB projects undertaken between 2002 and 2011, this paper analyzes processes of accounting change using a blend of institutional theory and political economy. A process perspective provides a method to unfold variants of accounting change by identifying patterns that help us to understand the conditions for and characteristics of convergence. I highlight specific variants of accounting change observed during the convergence effort - direct emulation, difference reduction and progressive redesign - as analogous to institutional processes. Where direct emulation and difference reduction reflect institutional processes of imitation and editing or translation, respectively, I show how progressive redesign of accounting standards goes beyond these classical categorizations to encompass the notion of ‘institutional co-construction’ (Djelic, 2008). Further, I identify the impact of the competitive and cooperative conditions under which the FASB-IASB convergence effort operated and reveal how these conditions were influenced by the macro-level economic and political developments occurring over the period.

Explanations for the gap between management accounting rules and routines: An institutional approach

This is a longitudinal in‐depth case study that was conducted within a Portuguese public sector organization, the National Postal Service of Portugal, where two management accounting innovations were implemented. The aim of one of the innovations – Income Statements – was to account for the financial results for the different areas within the organization, which could filter down to its basic elements. The aim of the other – Key Performance Indicators – was to provide indicators to monitor business performance. These innovations were not used in practice as planned, which afforded me the opportunity to explain the existing gap between their rules and routines. To do this, I based this study on the old institutional economics (OIE) inspired management accounting change literature.Following a strategy of collating together issues from more than one theory, this study contributes to the OIE inspired management accounting change literature by providing evidence that trust and power issues should be analyzed simultaneously and not separately, in order to extend our understanding of how management accounting innovations are (or are not) used in practice, and it also provides evidence that external and internal pressures or the lack of them should be considered through time and not only in explaining the initial stage(s) of the management accounting change processes. The study also provides practical insights for those who intend to carry out changes in management accounting practices in an organizational setting.

Complexity of accounting change during corporatisation: insights from two case studies

This paper analyses the differences and/or similarities of the process of accounting change and its consequences in two corporatised public utility organisations which are expected by the government to transform themselves into self-financing, efficient and profitable organisations. The explanatory case study method, using mainly semi-structured interviews and document reviews, was adopted. Accounting change was initiated through the mechanisms of institutional isomorphism and was enacted due to intertwined legitimacy and efficiency reasons. In spite of the efficiency reason, both cases demonstrated unsuccessful transformation due to incompatible ways of thinking, internal and external constraints and the mobilisation of power and the risks in actors’ relations. Both case studies similarly capture the complexity and stability of the ongoing process of accounting change during which the ingrained public service values and practices remained stable in spite of corporatisation. However, during the later stage, the leadership factor successfully promoted the use of accounting as the new organisational knowledge within one of the case organisations. Insights from these case studies show that the enactment of the so-called ‘efficient’ accounting system is neither deterministic nor simple, but evolves from a combination of issues.

The Supremacy of the Sequence: Key Elements and Dimensions in the Process of Change

How single organizations manage the process of change and why only some of them are able to actually reach radical change are central questions in today’s theoretical debate. The role played by the process of change and its dimensions (namely, pace, sequence and linearity), however, has been poorly investigated. Drawing on archetype theory, this paper explores: (i) whether a specific pace of radical change exists; (ii) whether different outcomes of change are characterized by different sequences of change in key-structures and systems (iii) how the three dimensions of the process of change possibly interact. As an example of organizational change the study takes into consideration processes of accounting change in three departments of two Canadian and two Italian municipalities. The results suggest the supremacy of the sequence of implemented changes over the other two dimensions of the process in order to achieve a radical outcome of change.

Management accounting system (MAS) change: field evidence

This paper critically discusses one of the prescriptions of traditional control literature according to which the management accounting system (MAS) should be adaptive to changes in the organizational and strategic context. Drawing from contingency and institutional theories, the paper drafts a framework to pragmatically identify key phases and features of the management accounting change process to highlight its organizational nature. Using this framework, the paper documents four longitudinal case studies of the design and the implementation of management accounting changes. The field studies show how accounting systems are difficult to change despite the formally acknowledged need for change. Findings highlight that the need for change, the technical feasibility of change, the availability of traditional, and the contemporary methodologies are – alone – insufficient reasons to change. A number of other elements interplay in the process of change, namely, the intended MAS use, the stage of the organization life cycle, the potential impact of change on the organization, and the role of key individuals in linking the phases of the change process.

Accounting logics, reconfiguration of ERP systems and the emergence of new accounting practices: A sociomaterial perspective

This paper extends our knowledge on how software-based accounting tools might work effectively within an organization. The empirical data that we focus on are events that unfolded following the introduction of a new ERP system at an Ivy League University. We describe a negotiation process that occurred after roll-out that resulted in a reconfiguration of the ERP to integrate some of the legacy functionalities that were familiar to organizational participants and which were considered by them to provide a more effective way to manage their finances. Our contribution to the literature is not only to show the importance of such post-roll-out modifications for creating a working information system, but also to extend previous accounts of non-linear accounting change processes by emphasizing how these modifications are dependent on the particular entanglement of users and technology (the sociomaterial assemblage) rather than either features of the technology or the agency of the humans involved. Moreover, our analysis of the case data suggests that management accounting in particular may not be easily captured in ERP packages, even where the technology architectures are supposedly designed for a particular industry. The case data also points to issues of affordability and the power of communities of practice as mediating the extent to which these familiar accounting logics may become integrated within the ERP system.

How the BSC implementation process shapes its outcome

PurposeThis paper has the aim of understanding how the reasons behind the adoption of the balanced scorecard (BSC) and the approaches undertaken during the entire change process influence the outcome, both in terms of BSC structure and use.Design/methodology/approachThe research studies the BSC change process and its use, adopting a multiple case study methodology which has been conducted in seven medium‐to‐large Italian non‐financial companies. The results have been analysed from an institutional perspective, considering the management accounting change process and its outcome not only as a technical problem, but also as a broader organizational issue.FindingsThe results show the interdependence between the change process, which is influenced by organizational forces, and its outcome. Different reasons for the adoption and different approaches in the design and implementation give rise to different BSC structures and styles of use.Research limitations/implicationsThe case study methodology that has been adopted does not allow the results to be generalized. Further research is needed to examine the BSC change process in order to support the findings.Practical implicationsThe findings could help managers decide when to introduce the BSC. Depending on how they use the device, they could become aware of the most suitable approach to adopt during the change process, a key feature in translating techniques into practice.Originality/valueThe paper explains the reasons behind the high fluidity of practice, considering the approach adopted during the management accounting change process.