Indonesian public sector accounting

reforms: dialogic aspirations a step too

far?
Author(s):
Harun Harun (School of Information Systems and Accounting, The University
of Canberra, Bruce, Australia)

Karen Van-Peursem (Department of Accounting, Victoria University of

Wellington, Wellington, New Zealand)

Ian R.C Eggleton (School of Accounting and Commercial Law, Victoria

University of Wellington, Wellington, New Zealand)

Abstract:
Purpose
– Drawing from an interest in the changing Indonesian political and regulatory
history, the purpose of this paper is to provide an understanding of the role
that accounting reform can play in nurturing, or failing to nurture, a more
dialogic form of accounting in a local Indonesian municipality.

Design/methodology/approach
– To collect the data, the authors undertook a case study of a local
municipality and drew from patterns found in Indonesia’s long colonial history.
Data were acquired from official and publicly available documents and
interviews with 29 key figures, including those involved in formulating and
disseminating laws and also those affected by the accounting reforms from
1998 to 2009. Document collection and interviews were conducted at national
and local levels.

Findings
– This study shows that Indonesia has undertaken significant economic and
political reforms for the intended purposes of fostering democracy,
strengthening accountability, and creating transparency in relation to public
sector practices. As part of these reforms, accrual accounting is now
mandatory, independent audit is conducted, and disclosure is required by
Government offices at central and local levels. Nonetheless, drawing from
dialogic accounting principles, this study demonstrates the limitations of
legislation and regulation in countering patterns that have long been laid
down in history. Essentially, there is limited opportunity to question the
elements of these reforms, and the study has also found that centralizing
forces remain to serve vested interests. The root of the problem may lie in
traditions of central control which have played out in how a dialogic form of
accounting has failed to emerge from these important accounting reforms.
 Research limitations/implications
– The findings of this study should be understood from historical, political,
and cultural backgrounds of the site of the study.

Practical implications
– The implications of the findings should be taken into account by public
sector policy makers, particularly in emerging economies – where political
realities, economic, social, political, and cultural backgrounds set different
historical patterns and result in unique circumstances that may tend to retain
traditions of the past even under rules and regulations of the present.

Originality/value
– A key contribution of this study is to show how the political traditions of a
nation can permeate and divert the intent of, in this case, engaging a broader
public in discourse about accounting reform in the public sector. In addition,
this study also provides an understanding of public sector reform in the
context of a diverse and unsettled nation which has been long subject to
colonial, top-led, and military leadership. The findings demonstrate
complexities and unintended outcomes that can emerge in public sector
accounting reform and how, in this case, they appear to be influenced by
historical traditions of centralized control.

Keywords:
New public management, Public sector accounting, Dialogic
accounting, History

Publisher:
Emerald Group Publishing Limited

Copyright:
© Emerald Group Publishing Limited 2015
Published by Emerald Group Publishing Limited

Citation:
Harun Harun, Karen Van-Peursem, Ian R.C Eggleton, (2015) "Indonesian
public sector accounting reforms: dialogic aspirations a step too
far?", Accounting, Auditing & Accountability Journal, Vol. 28 Issue: 5, pp.706 -
738, https://doi.org/10.1108/AAAJ-12-2012-1182