Max Aiken

Accounting for Infrastructure Service Delivery by Government: Generational Issues

Infrastructure service provision by government creates huge distributional issues about service availability and performance over time and the relative funding burdens borne by successive generations of consumers across time. But providing financial disclosure on these issues through inter-generational accounting pre-supposes that accounting measurement is both generationally neutral (temporal neutrality) and does not legitimate any particular pattern of distribution. At the very least, accounting measurements of service provision costs should possess the attribute of distributional fairness. They should not bias the inter-generational allocation of cost or funding burdens. We argue that the forced application of inappropriate commercial accounting concepts of asset valuation, depreciation and capital maintenance does produce significant generational bias. More flexibility is required to produce the necessary accounting measurement attributes for financial disclosure on whether government has discharged its continuing accountability for inter-generational equity in burden sharing. We discuss three conceptual issues and illustrate the need for flexibility by proposing an alternative ‘flow of obligations’ approach which does not require reference to valuations of community service resources or arbitrary cost allocations under depreciation.

Governmental influences in the development of Chinese accounting during the modern era

This paper reviews the historical development of accounting in China during the modern era since 1911, dividing the period into three phases: the pre-revolution period (1911–49); the pre-reform period (1949–79); and the current period (1979–to date). Attention is focused on the development of accounting during the current period. This paper critically evaluates an important phenomenon in Chinese accounting history – governmental dominance. It reveals that there have been two forces at work during the modern era, governmental control and outside influence. In China, the state has dominated the evolutionary process of accounting despite strong external influences, e.g. from Japan in the early part of the twentieth century, from the Soviets in the 1950s, and from the West more recently. The article examines accounting developments in their social, political and cultural environment, and concludes that with the Western influence increasingly strong, particularly given the world-wide trend towards the adoption of International Financial Reporting Standards, the Chinese government can maintain its controlling power over accounting affairs for the foreseeable future.

Origins and evolution of Chinese writing systems and preliminary counting relationships

The history of Chinese writing extends back more than 6000 years and the Chinese writing system remains unique among all writing systems. In this paper, the origin and evolution of Chinese writing systems will be discussed. It will be shown that in the Shang dynasty (about 1200 BC) the principles of Chinese writing had been formulated and that over the following 3000 years the structure and key elements of the system have remained, although the style of writing has changed (Li, 1969; Keightly, 1989). Explanations of the possible motivation behind the invention of Chinese writing will also be discussed. It can be shown that numerals had the highest frequency of occurrence in the earliest writing system - pottery inscriptions - and this finding indicates that one of the purposes of innovation of a writing system was for counting. This paper concludes that evidence of early Chinese writing confirms there is a significant relationship between the invention of a writing system and abstract counting and accounting requirements.

Management accounting as a social control for privatisation

During the past 50 years micro-economists have argued with practicing accountants about the need for uniformity and uses of current market values in balance sheets. This article argues against this economic authoritarianism, seeking instead to follow the evolution of accounting reporting practice over 350 years. This has much in common with the nature of democratically induced business accountability in the modern era. The article discusses the effects of 1990s privatisation in Australia and challenges whether the benefits of achieving fiscal and political goals in economics outweigh the social costs of a redistribution of wealth away from citizens. Should public sector accounting standards and financial reports be used to justify disclosure in terms of government policies for the re-distribution of wealth? The recent economic turmoil that has focused on ailing economies, company collapses and falling markets brings economic policies into question and this socio-economic phenomenon is addressed here together with traditional foundations of financial accounting for recognition of bargained rights and associated equities among participants.

How do the Chinese management accountants cope with changes from a planned economy to a market economy

Purpose - Since the Chinese government implemented its reform and open-up policies in 1978 many western management accounting concepts and techniques have been introduced into China. The purpose of this paper is to investigate how Chinese management accountants have coped with the changes in the new economic environment and absorbed new ideas into their own practices. This paper also discusses the differences between the current Chinese management accounting system and the management accounting systems used in the western countries, and the obstacles in implementing western management accounting systems in China. Design/methodology/approach - Both field study and survey approaches were used in this project. Six selected Chinese enterprises were visited. A questionnaire was distributed to all accountants in these companies. Findings - This paper has found that the main obstacle for implementation of western methods is not political sensitivity, but the extent of technical constraints. The management information system (MIS) is under development in most Chinese enterprises, while the essential data for using western techniques, such as activity-based costing, cannot be collected easily in the current situation. Nevertheless, changes in management accounting can be seen in some areas, such as the quality of products being promoted; the use of the responsibility accounting; and profitability as the key criterion for selecting investment projects. Originality/value - This paper provides a comprehensive study about Chinese management accounting systems. The findings in the study will help western investors to be better prepared if they have set up a business in China or are going to enter the Chinese market.