Peter Skærbæk

The politics of the changing forms of accounting: A field study of strategy translation in a Danish government‐owned company under privatisation

This paper presents an in‐depth study of the processes of constructing a new strategy in a large Danish government‐owned ferry company undergoing privatisation. To explain the emerging characteristics of accounting, the sociology of translation is used. The paper provides a story of a translation of strategy and related management initiatives using Callons four moments of translation. The story illustrates how, during the translation process, accounting changed its characteristics and uses from principles of control to principles of financialisation. Such emergent forms of accounting also reflect the political manoeuvring in the organisation as the result of network relationships. However, networks are open to erosion and undermining by active agents, changing the purposes of accounting. Whereas other authors within accounting, applying the sociology of translation, usually conceptualise accounting as inscriptions, this study explicates accounting as an interessement device. Finally, the study suggests that the sociology of translation may be a promising explication of accounting change.

The uncertainties of risk management: A field study on risk management internal audit practices in a Finnish municipality

Purpose - – The purpose of this paper is to analyse the implementation of risk management as a tool for internal audit activities, focusing on unexpected effects or uncertainties generated during its application. Design/methodology/approach - – Public and confidential documents as well as semi-structured interviews are analysed through the lens of actor-network theory to identify the effects of risk management devices in a Finnish municipality. Findings - – The authors found that risk management, rather than reducing uncertainty, itself created unexpected uncertainties that would otherwise not have emerged. These include uncertainties relating to legal aspects of risk management solutions, in particular the issue concerning which types of document are considered legally valid; uncertainties relating to the definition and operationalisation of risk management; and uncertainties relating to the resources available for expanding risk management. More generally, such uncertainties relate to the professional identities and responsibilities of operational managers as defined by the framing devices. Originality/value - – The paper offers three contributions to the extant literature: first, it shows how risk management itself produces uncertainties. Secondly, it shows how internal auditors can assume a central role in the risk management system. Thirdly, it develops Callons framing/overflowing framework with the notion that multiple frames are linked and create unexpected dynamics, and applies it to the study on the effects of risk management tools in an internal audit context. It shows how, despite recurring attempts to refine risk management, further uncertainties are continuously produced, thus providing an empirical illustration of how reframing and overflowing intertwine in a continual process.

Performance Auditing and the Narrating of a New Auditee Identity

This paper analyzes how performance auditing affects the auditee in different and sometimes unexpected ways. On the basis of a detailed case study of the Danish Ministry of Transports encounter with performance auditing we argue that performance audit is a practice that generates multiple effects and that some of these effects can be characterized as a reconfiguration of the organizational identity of the auditee. In this process, accountabilities are reformulated and reallocated which sometimes lead to ‘blame games’ and strong feelings of discomfort. We draw on actor-network theory and a narrative approach to study how performance audit reports produce narratives that picture new possible identities that the auditee in question must take into consideration. We argue that auditee identities are partly shaped by relations to ‘significant others’, such as the National Audit Office, the politicians and the press who all give accounts of who the Ministry is and ought to be. Furthermore, we argue that accounting and management information systems are enrolled as important ‘nonhuman’ actors that enable the suggested identity positions.

Unit costs in central government annual reports: a critical appraisal of the practices developed

Drawing upon an examination of the annual reports of three Danish government agencies, we offer a critical examination of the calculation practices that have developed within central government. The reports constitute a response to the demand from the Ministry of Finance and National Audit Office of Denmark that government agencies calculate unit costs and disclose these figures to the public. In particular we question whether, in its enthusiasm for bringing unit costs into the public domain, central government risks developing calculation practices that might not be helpful in informing decisions and debate on public spending. Publishing unit costs under the pretence that they can be used for both decision-making and performance measurement is a questionable practice. Within the literature on public sector accounting it has widely been accepted that all the deficiencies of cost accounting that occur in the private sector, such as arbitrary cost allocations, are also to be expected in the figures emanating from the public sector. This paper applies a rationalistic perspective in order to identify the additional problems that appear in the public sector. The findings illustrate that the calculations are not linked to decision alternatives, thus rendering them inappropriate for decision-making. For purposes of performance measurement, the uniformity of services required does not exist. We found that some deficiencies are intrinsic to the very idea of unit costing in the public sector while other deficiencies are producer related. In considering all the deficiencies demonstrated, we argue that the attempt to integrate a financial accounting medium with management accounting practices has failed. Those reading the disclosed figures may be tempted to draw conclusions that are not fully informed. However, we must admit that we cannot preclude that the cost information may be used internally for attention-directing purposes. A large number of the previous annual reports totally fail to consider quality. As an MP, how do you expect me to utilize the information that agency X has sent 12,500 answers to enquiries. Hurrah, have they increased their productivity – or what? Imagine that the 12,500 letters simply said, ‘Thanks for your enquiry. Your letter will be considered in our handling of the case.’ If the enquiries of the past year really did demand intensive attention, then the productivity has actually decreased. Statements expressed in quantitative terms do not always provide information adequate for political assessments or in order to prioritize. (Chairman of the Public Accounts Committee, Peter Duetoft, MP. See Duetoft, 1998; own translation – ed.) Jens Aaris Thisted, Copenhagen Business School, Solbjerg Plads 3, 2000, Frederiksberg, Denmark. E-mail: jat.om@cbs.dk

The politics of accounting technology in Danish central government

The social and political aspects of a governmental computer-based accounting system (SCR) in Denmark will be examined. It is generally accepted that the SCR system has fulfilled a number of useful purposes. However, it has also been subjected to adverse criticism, as extensive, political implications have been detected in its application. In the study I have analysed the application of accounting technology from a political perspective. One of the main findings of this study indicates that the centralized management accounting system has implications for the balance between autonomy and control. It is suggested that centralized accounting technology creates a management view that symbolizes dependency and bureaucracy. If such an understanding of accounting technology is integrated with theories of management control, we may find that the SCR system will have an impact on the evolution of local management control in government agencies.

Auditing and the Purification of Blame

Although public sector special audit and performance audit are frequently involved in blame, very few studies (save for Radcliffe 1997) provide detailed empirical accounts on how auditing participates in blame allocation. This study sets out to study one case of blame allocation by describing and characterizing the origins of failure and antecedents leading to the need for blame allocation, the institutional entities and arrangements that participate in the blame game, and how these entities, including the supreme audit institution, are mobilized in the processes of blame allocation. Applying a case methodology with Actor–Network Theory principles, the study extends Hoods (2002, 2007) research on blame and blame avoidance strategies by showing how a blame†frame evaluates and allocates blame. The contribution of the paper is in four parts: first, it reveals the mechanisms that cause scapegoating of particular people and the role of auditors as experts in such mechanisms; second, it assists to develop an understanding of some factors at the core of the “accountability paradox†noted by Roberts (2009); third, it contributes to explanations as to why failing public sector reforms survive controversy and scandal since a scapegoating process can “reboot†reforms by erasing the reforms problems; and fourth, it demonstrates that an understanding of blame can be a useful addition to Actor–Network Theory.

New Public Management in a Scandinavian context

This chapter gives an overview of the main NPM reforms and trends in the Nordic countries. The idea of a uniform Scandinavian model of NPM is discussed – the chapter presents the different countries as members of a shared public administration tradition, albeit with different traits and particular reforms. The Swedish constitution and the organization of the public sector in a centralized and a two-part local government structure are presented, both as a backdrop to the subsequent chapters and for a reflection about whether there is a uniqueness to be found in the Swedish NPM initiatives. The long history of decentralized public decision-making and its ramifications on the structure of the Swedish public-sector organization is given special attention. From a Scandinavian perspective, the public-sector structures and characteristics in Norway, Denmark and Finland are presented, by which the idea of a single Scandinavian model for all is discussed and contested. (Less)Looking at the Swedish public sector from a Scandinavian perspective, this chapter argues for a challenged but resilient (although not uniform) Scandi- navian public sector. Sweden is a nation with a long tradition of decentral- ized decision-making, semi-autonomous government agencies and independent local governments. This is considered a receptive context for continuous and incremental modernization. It has fostered a high degree of experimentation in terms of modes of production and distribution, albeit without the risks associated with purely market-driven social reforms based on privatization of both production and financing. The variations on the Swedish modernization theme are many, involving various forms of mar- ketization initiatives, boundary-spanning cooperative efforts and an open attitude and willingness towards trying and sharing experiences. High levels of transparency and trust are two initial traits signifying the Scandinavian public sector, which have been both amplified and challenged by the NPM agenda. The inherent strive of NPM for compartmentalization, quantifica- tion and performance measurement challenges some of the institutional glue of the welfare state, which has kept the parts together in a solid unity. Simultaneously, many NPM reforms – with their emphasis on performance measurement and reporting for increasing transparency and improving the outcomes of public polices and services – contribute both to sustained trust and welfare. The chapter concludes that Sweden keeps defending the Scan- dinavian model and values of universalism, solidarity and market independ- ence, a defence in which developments in society and future public management reforms may prove wanting. (Less)