abstrak akt publik

3,   Institutionalization of accrual accounting in the  Indonesian public sector

Harun Harun

Faculty of Economics, Tadulako University, Tadulako, Indonesia, and

Karen Van Peursem and Ian Eggleton

School of Accounting and Commercial Law, Victoria University of Wellington, Wellington, New Zealand

Abstract

Purpose –

The purpose of this paper is to evaluate the institutionalization of an accrual accounting system in the Indonesian public sector.

Design/methodology/approach –

The authors undertake a case study to gain insights relating to the critical features of the institutionalization process of the accrual accounting system (AAS) in one Indonesian public sector municipality. The data are drawn from official documents of the Indonesian Government and from publicly available information about the accrual adoption processes. The authors also interviewed key actors who were involved in the accrual accounting policy formulation, standards development and implementation. The data under investigation cover the period from 1983 to 2010.

Findings –

The IPM of Dambrin, Lambert and Sponem is employed to evaluate the process by which an AAS was idealized, standardized, implemented and used in one Indonesian municipality. Scott’s pillars of legitimization also inform rationales behind practice. This study reveals how the decision of the Indonesian Government to adopt accrual accounting in 2003 was part of greater political and economic reforms following the financial and political crisis that occurred in 1998. Idealized in the early

1980s by technocrats in the Ministry of Finance, accrual accounting practices were deferred and then enabled by a series of national political events. Their ultimate internalization into our municipality was led by new legislation but also influenced by the habits and histories of the Indonesian local context and was as a result decoupled in many respects from ideals, discourses and techniques established for it.

Research limitations/implications –

The findings should be understood in the economic, social and historical context of Indonesia. Findings offered here may differ from other applications due to the nature of the economic, social and political contexts.

Originality/value –

Uniquely employing the IPM model, and drawing from a context which has undergone significant political change but  which has  benefitted from little research, this  study contributes to an understanding  of the institutionalization and legitimization process of an accrual accounting system in an emerging - economy public sector. Findings demonstrate how notions of politics and power inform the complexity of institutionalization in this unique political-economic environment.

Keywords:  Accrual accounting, Institutionalization, Indonesia, Efficiency, Transparency, Accounting

Paper type Research paper

4,   OBSTACLES TO PUBLIC SECTOR ACCOUNTING REFORM IN INDONESIA

Bulletin of Indonesian Economic Studies, Vol. 43, No. 3, 2007: 365–75

Harun*

Tadulako University, Central Sulawesi

This paper draws attention to the importance of improving the quality of public sector accounting in Indonesia, in line with the aims of reformasi (reform) and demokratisasi (democratisation), and in the context of decentralisation. It highlights a continuing lack of progress in reform of government accounting. This is attribut - able partly to a lack of interest in and understanding of the issues among newly empowered electors. Successive governments have been reluctant to push hard for accounting reform, not least because improved accountability poses a significant threat to politicians’ and bureaucrats’ overall income levels. In addition, current hu- man resource management practices in the public sector have resulted in a shortage of accounting skills, and without these there is little prospect of successful reform in this area. A possible solution may be to establish a parallel civil service specifically to undertake the accounting functions of government.

5,  THE  ADOPTION OF ACCRUAL ACCOUNTING IN THE INDONESIAN PUBLIC  SECTOR$

Harun  Harun  and Peter Robinson

ABSTRACT

Purpose   –  The  purpose  of  this  article  is  to  examine  the  contextual variables  that  influence the  pace  of public sector  reforms  through  the adoption of accrual accounting for the Indonesian public sector.

Design/methodology/approach –

The study employs a historically informed study based on a modified version of the Luder’s (1992) Contingency Model (LCM). The data are drawn from official documents issued by the Indonesian government about reporting system for the public sector  in the  country  and  interviews with the  key  figures  involved in the public sector accounting reforms in Indonesia.  The study also uses publicly available information addressing the recent progress in the implementation  of  the  accrual  accounting  system  in  the  Indonesian public sector.

Key  findings  –

The adoption  of accrual  accounting  in the  Indonesian public sector was stimulated by the economic crisis, prodemocratic movements, and  international   pressures  for  the  reform  of  the  public sector. However, the public sector accounting reforms in the country are confronted with significant implementation barriers  which include legal issues, the lack of political supports, and skilled human resources. These barriers in turn threaten the intended purposes to be achieved through the greater  economic and  public sector  reforms  in  the  newly democratic Indonesia.

Research  limitations/implications –

The arguments of the study should be understood in the context of the institutional setting of Indonesia as a developing country.  Nonetheless,  the  findings  of  this  study  show  an example of the complexity faced through  the use of the private sector accounting practice in the public sector context.

Originality/value –

The findings of the study support the notion that the nature  of legal system, political support,  and human resource  capacity influence the extent to which an accounting system is adopted in the public sector.

Keywords: Accrual accounting;  local government;  decentralization;

implementation barriers.

                     

7,   Indonesian public sector accounting reforms: dialogic aspirations a step too far?

Harun Harun

Abstract

Purpose – Drawing from an interest in the changing Indonesian political and regulatory history, the purpose of this paper is to provide an understanding of the role that accounting reform can play in nurturing, or failing to nurture, a more dialogic form of accounting in a local Indonesian municipality.

Design/methodology/approach –

To collect the data, the authors undertook a case study of a local municipality and drew from patterns found in Indonesia’s long colonial history. Data were acquired from official and publicly available documents and interviews with 29 key figures, including those involved in formulating and disseminating laws and also those affected by the accounting reforms from 1998 to 2009. Document collection and interviews were conducted at national and local levels.

Findings –

This  study  shows that  Indonesia has  undertaken  significant economic and  political reforms for the intended purposes of fostering democracy, strengthening accountability, and creating transparency in relation to public sector practices. As part of these reforms, accrual accounting is now mandatory, independent audit  is conducted, and disclosure is required by Government offices at central  and  local levels. Nonetheless, drawing  from  dialogic accounting  principles, this  study demonstrates the limitations of legislation and regulation in countering patterns that have long been laid down in history. Essentially, there is limited opportunity to question the elements of these reforms, and the study has also found that centralizing forces remain to serve vested interests. The root of the problem may lie in traditions of central control which have played out in how a dialogic form of accounting has failed to emerge from these important accounting reforms.

Research limitations/implications – The  findings of this  study  should  be understood  from historical, political, and cultural backgrounds of the site of the study.

Practical implications – The implications of the findings should be taken into account by public sector policy makers, particularly in emerging economies – where political realities, economic, social, political, and cultural backgrounds set different historical patterns and result in unique circumstances that may tend to retain traditions of the past even under rules and regulations of the present.

Originality/value –

A key contribution of this study is to show how the political traditions of a nation can permeate and divert the intent of, in this case, engaging a broader public in discourse about accounting reform in the public sector. In addition, this study also provides an understanding of public sector reform in the context of a diverse and unsettled nation which has been long subject to colonial, top-led, and military leadership. The findings demonstrate complexities and unintended outcomes that can emerge in public sector accounting reform and how, in this case, they appear to be influenced by historical traditions of centralized control.

Keywords

New public management, Public sector accounting, Dialogic accounting, History

Paper type  Research paper

8,  The interactionamongst reform drivers in governmental accounting changes

The  case of Indonesian local  government

Marwata

Abstract

Purpose –

 The purpose of this paper is to understand the process of accounting change in Indonesian local government. It sets to explore how various reform drivers with different interests and preferences compete and cooperate in the process of governmental accounting reform policy formulation in a developing country context.

Design/methodology/approach –

The paper adopts a qualitative case study research involving semi-structured interviews with the key informants within the institutional environment under which the local government organizations operate. This paper looks at the introduction of new accounting systems as a result of public sector reform in Indonesia local government by focusing on how the policy of reform was formulated. A review of related documents and regulations, as well as interviews with key informants, was conducted to gather information on accounting change.

Findings –

The  process  of governmental  accounting  reform  is  characterized  by  rivalries  and alliances amongst reform drivers. This confirms the political nature of the process of accounting policy formulation found in the extant literature of accounting policy setting.

Research  limitations/implications – This  is  a  case  study  research  within  the  institutional settings of Indonesian government bureaucracy. Any generalization of the conclusions from this study should  undertaken  with  care  even though  there  are  similarities  between Indonesian  and  other developing countries as institutions operate differently in different countries.

Originality/value –

As the vast majority of studies in the extant literature have focused, mainly, on accounting reform in the context of developed countries, this paper makes important contribution by highlighting accounting changes in Indonesian local government.

Keywords Public sector reform, Indonesia, Accounting, Local government

Paper type Research paper

9,  Public Sector Accounting  Reform at Local Government Level in Indonesia

ROSS H. MCLEOD AND HARUN HARUN∗

Abstract:    

This  paper  describes   and  analyses the  challenges encountered in attempting to reform  public  sector  accounting in Indonesia,  the  main  objective  of which is to combat corruption  and thus help improve governance. Our observations suggest that  this reform has been seriously  hindered by a lack of staff  with adequate accounting skills  a problem exacerbated by the decision  to continue  to prepare old style   cash-based  reports alongside the  new  accrual-based  reports. Our key contribution is to demonstrate the danger  of rushing to copy public sector  financial management techniques from quite different country contexts, especially when there are significant differences of opinion as to the appropriate design  of these reforms among the influential policy-making agencies.

Keywords: public sector, corruption,  accrual  accounting, New Public Management

10,  Public Sector Financial Management Reform: A Case Study of Local Government Agencies in Indonesia

Monir Mir

University of Canberra, Monir.Mir@canberra.edu.au

Wahyu Sutiyono

University of Canberra

Public Sector Financial Management Reform: A Case Study of Local

Government Agencies in Indonesia

Abstract

Indonesia has taken initiatives to reform its public sector financial management. One of the reform agendas was to introduce ‘cash to accrual’ accounting for improved financial reporting. It is expected that improved financial reporting will enhance financial accountabilities of the governmental agencies and will assist both internal and external decision makers whose decisions will be based on the financial reports. However, it has been observed that there is a significant increase in the number of qualified audit reports when these financial reports were audited. This also means that these financial reports are lacking in providing true and fair views

on the financial activities of the governmental agencies, thereby not assisting in discharging their accountabilities. This study seeks to answer the question as to why the numbers of qualified audit reports have increased despite the existence of various governmental accounting reform agendas. Based on the in-depth case studies of three Indonesian local governments, it is found that the demand, the supply and the quality assurance of the accounting information outputs in these local governments are not in parity, and this lacking in parties actually has impacted in producing unqualified and usable accounting reports.

Keywords

Public sector reform, New public management, Financial management, Local government, Indonesia