Accounting and Public Policy

• Accounting records provide a way of freezing the decisions of the past (Bahmueller, 1981)

• ‘Facts’ can thereby be created out of dissent and disagreement

• Accounting is already centrally implicated in the institutional frameworks, language and patterns of power and influence that characterize the public sector

Pressures for Public Sector Accounting to Change

Changing Conceptions of the State

• The legitimacy and value of at least some State actions and prerogatives are now being questioned from the perspective of a very different ideological stance

• A new way of examining and managing the State is emerging

  • And accounting is being implicated in that process

• Agencies of the State are now being asked to account for their, aims, actions and achievements

• ‘Value for money’ has now entered the vocabulary of government

• New economic visibility

• Economic calculations are now being seen as a way not only of reforming the management of the State but also of influencing the priorities which are given in policy determination and decision making

Accounting and Economic Restraint

• Organisations tend to increase their investment in economic calculation and visibility during periods of restraint

  • ‘newly poor behavour’ (Olofsson and Svalander, 1975)

• Financial standards, budgets and plans become both more detailed and more subject to change

• Accounting in the United Kingdom has tended to flourish during just such periods of economic difficulty

• Auditing profession – emerged in the latter part of the 19^th century as a product of attempts to reform the practice of bankruptcy administration

• Cost accounting and the elementary practices of financial control started to play a more important role in manufacturing organisations faced with a rising real cost of labour at a time of general deflation and recession

• The slump of the 1930s saw a dramatic rise in the role and status of accountants in industry as members of the auditing profession started to enter the upper echelons of manufacturing industry

The Search for Greater Efficiency

• Continued economic restraint has given a new urgency to demands to improve the efficiency of management in the public sector

• Traditionalism and sluggishness of decision processes in the public sector is noted repeatedly

• Efficiency remains a very real and persuasive dream

• Appeals are made to the potential offered by improved costing procedures, more specific criteria for resource allocation, improved management information systems, investments of administrative efficiency and better audits

Accounting and the Demand for Accountability

• In the public sector, accounting has been implicated with the development of notions of stewardship and accountability

• Accounting information has flowed from agencies of the State to Parliament and the public at large in recognition of the emerging constitutional requirement for the former to provide an account to the latter

• 1960s and early 1970s – notions of social, environmental and energy accounting and auditing were discussed and experimented upon

• Concepts such as ‘freedom of information’ and ‘the right to information’ started to enter the language of political negotiation and debate

• Accounting maintained its emphasis on the economic, and disclosure, rather than access, remained the vehicle by which...

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