Masayoshi Noguchi

The development of budgets and their use for purposes of control in Japanese aviation, 1928-1945: the role of the state

Purpose - This paper aims to examine the role of the Japanese state in the development of budgets within “special companies” in the transportation sector between 1928 and 1945. Design/methodology/approach - Using evidence contained in the archives of “closedown institutions” this paper examines the role of the state in determining the use of budgets within Japan Air Transport (1928-1938) and Japan Airways (1938-1945). The paper adopts the lens of new institutional sociology to examine the changes in the use of budgets effected when Japan Airways succeeded Japan Air Transport. Findings - Prior to 1938, although subject to the need to provide budget statements to the government, the budget systems operated by special companies within the Japanese transportation sector were largely utilised for the purpose of legitimising receipt of government subsidies. Following the establishment of Japan Airways in 1938, however, an increasing use of the budget system as a control mechanism is observed. It is found that a key role in this coercive process was played by the Aviation Bureau of the Ministry of Communications, reflecting changes not only in its own status but also the financial pressures exerted on the Japanese government during the Second Sino-Japanese War from 1937 and the Pacific War from 1941. Originality/value - This paper examines the development of the use of budgets at a time, the interwar period, which is considered critical to the development of budgets for purposes of control. By doing this within a context (special companies) and within a geographical space (Japan) which has not previously been analyzed by accounting historians, this study helps to add to the material available for conducting comparative international accounting research. Furthermore, by using the lens of new institutional sociology, this study provides an in-depth insight into how, and under what conditions, the degree of decoupling between formal policies and actual practices can vary over time depending on the extent of coercive pressures.

Auditors and the supervision of retail finance: Evidence from two small-sized building societies, 1976–1978

This study examines features of delegated monitoring in the context of major defalcations in two small-sized building societies (namely the Wakefield and the Grays). The factors causing the defalcations were the dominance of an individual over a building society’s systems, and poor systems of internal control and supervision. The auditors of both societies were criticised for failing to discharge their duties as expected under the Building Societies Act 1960, and the Wakefield and Grays cases constituted a turning point in the supervision of retail financial intermediaries. Previously, the Chief Registrar of Friendly Societies had adopted a reactive approach to supervision, which effectively delegated the monitoring of the societies to external auditors. The defalcations revealed that there was a lack of productive communication between the Registry and external auditors. As a result, it was felt that there was a need to reform and adopt a proactive approach to supervision under which the Registry was to examine directly the quality of the auditors’ work.

Different scenarios for accounting reform in non-Anglophone contexts: The case of Japanese local governments since the 1990s

On the basis of an analytical framework of New Institutional Sociology (NIS), this study examines the transformation from cash-based to accrual-based accounting systems among Japanese local governments since the 1990s. The analysis indicates that their accounting reforms stem from socio-political interactions among related actors. These actors were Japan’s local governments and the national government as represented by ministries involved in the administration of local governments, such as the Ministry of Internal Affairs and Communications (MIC) and the Ministry of Finance. This analysis shows that NIS in general, and the concept of coercive isomorphism in particular, provide capable explanations for local governments’ widespread adoption of a modified model recommended by the MIC. In addition, the concept of decoupling explains well the lower perceived utility of accrual accounting information in managing the finances of local governments.