Frode Mellemvik

Functions of accounting — a discussion

From the many accounting objectives which have been suggested, it seems that the intended function of accounting is to reduce uncertainty in control and decision-making processes. However, after conducting a literature search of empirical studies of accounting in action we came to three conclusions about the functions assigned to accounting. First, we suggest that a number of functions are assigned to accounting in action. Second, there is a reciprocal relationship between accounting and the functions assigned to it. Third, there is a complex relationship between accounting and its context. The main function of accounting in a strong organizational context with interdependent organizations is to support legitimization processes, while the main function of accounting in a strong organization with a dependent environment is to support the organization in its exercise of power.

Institutionalization of municipal accounting -- a comparative study between Sweden and Norway

This paper focuses on the way in which accounting is becoming institutionalized. A comparative and historical study of municipal accounting in Sweden and Norway is presented. Accounting is regarded as consisting of two systems -- the norm system and the action system. The relations between norms, and action and their environment are discussed in light of ideas derived from institutional theory and organizational learning. Two modes of learning are revealed, one ideological and one hierarchic. Irrespective of the mode of learning, the norms are closely associated with the environment of accounting. In the ideological mode this link-up occurs via the action system and in the hierarchic mode via the norm system. Depending on how strongly the norm system forces the action system to respond, the learning processes in which accounting as a whole is involved will reveal a greater or lesser degree of variation.

The rise and fall of accruals: a case of Nepalese central government

Purpose – The purpose of this paper is to trace the rise and fall of accruals in the Nepalese central government, contributing to the literature on accrual accounting by looking at the developments in developing countries.Design/methodology/approach – The ideas of institutional theory have provided a theoretical setting through which to trace the countrys journey toward the accrual basis of accounting. Document search and informal interviews represent the major methods of collecting data for this paper.Findings – The paper demonstrates that Nepal has been acquainted with the notion of accrual accounting since the late 1980s. The interest of international organizations and the involvement of professional accountants have been the two main factors driving this accrual accounting journey. The study also shows that the implementation of accrual accounting in the Nepalese central government has been an unsuccessful mission. This is why the notion of accrual accounting has been replaced by the improved version...

The adoption of ipsass in south asia: A comparative study of seven countries

Purpose – This empirical article aims at studying whether, how, and to what extent the South Asian countries have or are planning to move in the International Public Sector Accounting Standards (IPSASs) direction. Design/methodology/approach – By applying the institutional perspectives, the article seeks to explore the roles and contributions of international financial institutions in the dissemination of public sector accounting reform ideas, particularly IPSASs ideas in South Asia. Document search represents the major method of collecting data for this study. Findings – The present article demonstrates that the majority of the South Asian countries have envisaged the adoption of the cash basis IPSAS as a way forward in order to implement accrual accounting. International financial institutions have seemingly created a myth in the region that accrual accounting cannot be introduced without first complying with the cash basis IPSAS. However, the countries’ efforts are to a large extent directed at adapting rather than adopting IPSASs in all material respects. In relation to this, the article suggests that the acceptance of IPSASs in South Asia is better understood in terms of legitimacy. Research limitations/implications – It is beyond the scope of this article to cover the ongoing public sector accounting reforms in South Asia other than IPSASs reforms as well as to reveal accounting changes at other levels than central government level. Practical implications – The article raises doubts as to whether and to what extent the cash basis IPSAS will help public sector management reforms in South Asia. Originality/value – Given the paucity of consistent research efforts on the topic in Western English language literature, the present article strives to bring ongoing IPSASs reforms in South Asia into the international arena. The article also contributes to the growing body of the comparative public sector accounting research by presenting the similarities and differences in government accounting reforms, particularly IPSASs reforms, in South Asia.

Accounting, the hidden collage? Accounting in the dialogues between a city and its financial institutions

The aim of this article is to promote an understanding of accounting not only as a harmoniously organized painting but also as a collage, since accounting -- like a collage -- can be seen as a jumble riddled with discontinuities. With this in mind, the ways in which accounting is applied in dialogues on the subject of finance between a Norwegian local government and its financial supporters are described. In all dialogues accounting is understood in several, sometimes conflicting ways. The article argues that each understanding reflects harmony in that it represents the perception of reality of the individuals involved. Consequently, a dialogue involving many individuals and different contexts portrays a complex of understandings of reality, resulting in the disappearance of harmony. Because any one accounting report is read not only by different individuals but also in different dialogues, many associations become attached to it. An accounting report thus comes to represent a collage, releasing a complex of associations and understandings. The collage of an accounting report is not on display, however. None of its readers will normally have in mind all the different ways in which all the other readers are understanding it. The accounting report can thus be said to be a hidden collage, in the sense that each reader only sees a fragment of it.

The Construction of Materiality in Government Accounting: A Case of Constraining Factors and the Difficulties of Hybridization

This paper illuminates materiality features during experimentation with central government accounting in Norway. Data was collected using observations, interviews, informal conversations and documents. We found that materiality was constrained by numerous factors, including: time, disagreement, coordination and communication difficulties, actors’ background, standardizing and thinking ahead. Moreover, a mixture of theoretical accounting approaches and construction forms was found, indicating a hybridization‐based experimentation and materiality construction. Therefore, construction came about as an effect; materiality was often constructed implicitly, and not aligned with its defined elements. Finally, we comment on associated implications for accounting complexity and endeavors to make accounting changes.

Nepalese Governmental Accounting Development in the 1950s and Early 1960s: An Attempt to Institutionalize Expenditure Accounting

This paper aims at disseminating knowledge about the evolution of expenditure accounting in the government of Nepal. In doing so, the paper examines emerging ideas in the aftermath of the political change of 1951 in Nepal, and traces the processes of development and institutionalization of expenditure accounting during the course of two decades, the 1950s and early 1960s, with particular reference to the institutional forces at work. An interesting feature of Nepalese accounting reforms before and after the political change was the active participation of India, the United Nations, and the U.S. Agency for International Development (USAID). At the outset of the post-Rana period, Indian advisors dominated the reform process and helped Nepal introduce and incorporate a range of modern administrative measures, including a new budgeting structure called line-item budgeting. The external influence on Nepals reforms and the ways of installing new values in the administration altered in the second half of the 19...

Exploring Accounting and Democratic Governance: A Study Comparing a Norwegian and a Russian County

Interpretations and explanations of experience that make consequences interpretable and actions imaginable are said to be given by accounts. Formal accounting systems used in economic, social and political institutions are seen as portraying their political realities. The purpose of this study is to explore connections and tensions between the realities portrayed in the accounting systems and the governance structures of local governments in two counties, one in Norway and one in Russia. The formal accounting and governmental systems of these two counties are described, analyzed and compared using accounting and democratic governance perspectives. The article ends with a discussion of interrelationships and tensions between accounting and democratic governance. Through comparing the democratic governing structures of these two counties with the accounting systems employed, three main conclusions are presented. Firstly, it is shown that principal-agent relations influence accounting procedures that symbolize democratic governance. Secondly, the accounting language applied does not portray local politicians. Thirdly, accounting norms do not reflect democracy and democratic governance. In summary, the study shows that even very formalized accounting offers flexibility by way of giving meaning to processes and structures in organizations characterized by strictly formalized structures.

Accounting and Democratic Governance: A Comparative Study of One Norwegian and One Russian County

Accounting is a social construction which can be found in all types of organizations, e.g. private and public. It cannot be isolated from its context, e.g. the social processes operating in and around organizations (Mellemvik et al., 1988; Hoopwood, 1983). In this sense, accounting is context influenced and vice versa (see e.g. Gronhaug et al., 1997; Garrod & McLeay, 1996). Through the process of interaction with its context accounting becomes institutionalized (Bergevam, 1995).

Russian Local Government Accounting: New Norms and New Problems

Since perestroika began in the mid 80s, the Russian society and economy entered a reform process. The idea was that the old system which was mainly built on ideological enthusiasm and strict bureaucratic control by the state, should be changed. Gorbachev was the first to take the responsibility of starting up the reform process by introducing his perestroika.