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From go to woe

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  • Helen Irvine

Abstract

Purpose - The aim of this paper is to examine the process of change in an Australian not‐for‐profit organization, from a cash‐based to an accrual‐based accounting system. Its particular focus is the relationship between the image portrayed by accrual accounting adoption and the technical realities of the new system. Design/methodology/approach - Data were gathered from interviews, documents and meetings, and were contextualized and interpreted using institutional theory. Findings - The decision to change to accrual accounting was made at the top of the organizational hierarchy in response to institutional pressure to present a corporate image. The implementation of the new system was poorly conceived, inadequately resourced, and hampered by an authoritarian structure that effectively ignored the technical incompetence and training needs of many accounting staff. This resulted in an accounting system half way between cash and accrual, and very different from the system as it had been promoted. The process caused conflict at all levels of the organizational hierarchy. Research limitations/implications - Accounting in not‐for‐profit organizations is an under‐researched area offering potential for fruitful research in a changing institutional landscape. This institutional approach, while offering just one interpretation of the qualitative data gathered in this project, provides valuable insights about the process of change. Practical implications - Not‐for‐profit organizations play a vital economic and social role, and need carefully to assess their responses to ongoing institutional pressures. In implementing change, they face the challenge of balancing the promotion of an institutionally acceptable image and the need for technical efficiencies. Originality/value - The examination of change in an organization provides a rich context for the exploration of the dynamic, problematic process by which a new accounting practice is embedded and institutionalized.

Suggested Citation

  • Helen Irvine, 2011. "From go to woe," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 24(7), pages 824-847, September.
    • Handle: RePEc:eme:aaajpp:v:24:y:2011:i:7:p:824-847
    DOI: 10.1108/09513571111161611
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    References listed on IDEAS

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    1. Richardson, Alan J. & Kilfoyle, Eksa, 2009. "Accounting in markets, hierarchies and networks: The role of accounting in the transnational governance of postal transactions," Accounting, Organizations and Society, Elsevier, vol. 34(8), pages 939-956, November.
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    4. João A. Ribeiro & Robert W. Scapens, 2006. "Institutional theories in management accounting change: Contributions, issues and paths for development," Qualitative Research in Accounting & Management, Emerald Group Publishing, vol. 3(2), pages 94-111, July.
    5. Hoque, Zahirul, 2005. "Securing institutional legitimacy or organizational effectiveness? A case examining the impact of public sector reform initiatives in an Australian local authority," Working Papers aef_2005_10, Deakin University, Department of Economics.
    6. Fogarty, Timothy J., 1996. "The imagery and reality of peer review in the U.S.: Insights from institutional theory," Accounting, Organizations and Society, Elsevier, vol. 21(2-3), pages 243-267.
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    Cited by:

    1. Adhikari, Pawan & Kuruppu, Chamara & Matilal, Sumohon, 2013. "Dissemination and institutionalization of public sector accounting reforms in less developed countries: A comparative study of the Nepalese and Sri Lankan central governments," Accounting forum, Elsevier, vol. 37(3), pages 213-230.
    2. Michael O. Erdiaw-Kwasie & Khorshed Alam & Md. Shahiduzzaman, 2017. "Towards Understanding Stakeholder Salience Transition and Relational Approach to ‘Better’ Corporate Social Responsibility: A Case for a Proposed Model in Practice," Journal of Business Ethics, Springer, vol. 144(1), pages 85-101, August.
    3. Khoirul Aswar & Siti Zabedah Saidin, 2018. "Accrual Accounting Adoption In Java Municipalities: An Empirical Investigation," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Democritus University of Thrace (DUTH), Kavala Campus, Greece, vol. 11(3), pages 24-30, December.
    4. Daff, Lyn & Parker, Lee D., 2021. "A conceptual model of accountants' communication inside not-for-profit organisations," The British Accounting Review, Elsevier, vol. 53(3).
    5. Khoirul Aswar & Siti Zabedah Saidin, 2018. "The Influencing Factors On The Level Of Accrual Accounting Adoption: A Conceptual Approach," Romanian Economic Business Review, Romanian-American University, vol. 13(2), pages 30-36, June.

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