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Interpreting management accounting rules: an initial study of public bodies

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Abstract

Much has been written on the potentially institutionalized nature of management accounting practices in the past decade or so. In particular, the interactions of rules and routines, over time, provide explanations for the stable or changing nature of management accounting. Recent work has focused more on the conceptual nature of routines in particular. This paper will focus on an organizational environment where rules are more prevalent and explore the role of rules in rules/routines interactions. Such studies focusing on rules are lacking in the extant literature. This paper provides some evidence from initial interviews at two Irish local authorities which have recently changed internal costing systems at the behest of central government. Management accounting rules were forced upon the local authority by an external party (central government), and we explore how these rules were interpreted by actors, and thus can become routinized. This interpretation led us to examine the notions of formal versus informal rules. Based on the empirical evidence we propose a more detailed interaction of rules and routines which bring about potentially institutionalized management accounting practices than that proposed in extant literature.

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Notes

  1. See Kingston and Caballero (2009).

  2. This dictionary is available at http://oxforddictionaries.com/.

  3. It is generally accepted that repetition is a necessary constituent of routines (see Becker 2004, 2008 for a useful summary).

  4. In most cultural contexts, internal management accounting practices of private organizations are not regulated in the same way as financial accounting practices.

  5. This definition is from the most recent manual, as no copies of the original manual were available at BLA.

  6. The Department of Environment is the central government body responsible for all local authorities in Ireland.

  7. Although the Better Local Government initiative began in 1996, it was 2006 before a new version of the costing manual materialized.

  8. While Burns and Scapens (2000) use the terms “formal” and “informal” they do not apply these to rules in their framework.

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Author information

Authors and Affiliations

  1. Dublin City University Business School, Glasnevin, Dublin 9, Ireland

    Julie Bertz & Martin Quinn

Authors
  1. Julie Bertz
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  2. Martin Quinn
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Corresponding author

Correspondence to Martin Quinn.

Appendices

Appendix 1

Interviewee details

Organization

Role

Length of interview

CLA

Senior management accountant

65 mins

CLA

Junior management accountant

72 mins

BLA

Head of finance

85 mins, 61 mins

BLA

Management accountant

92 mins, 65 mins

Appendix 2

Programme group

Programme

1. Housing and building

1.1 Local authority housing

1.2 Assistance to persons housing themselves

1.3 Assistance to persons improving houses

1.8 Administration and miscellaneous

2. Road transportation and safety

2.1 Road upkeep

2.2 Road improvement

2.3 Road traffic

2.8 Administration and miscellaneous

3. Water supply and sewerage

3.1 Public water supply schemes

3.2 Public sewerage schemes

3.8 Administration and miscellaneous

4. Development incentives and controls

4.1 Land use planning

4.2 Industrial development

4.3 Other development and promotion

4.5 Director of community and enterprise

4.6 Twinning of local authority areas

4.8 Administration and miscellaneous

5. Environmental protection

5.1 Waste disposal

5.2 Burial grounds

5.3 Safety of structures and places

5.4 Fire protection

5.5 Pollution control

5.8 Administration and miscellaneous

6. Recreation and amenity

6.1 Swimming pools

6.2 Libraries

6.3 Parks, open spaces, etc

6.4 Other recreation and amenity

6.8 Administration and miscellaneous

7. Education, health and welfare

7.2 Education

7.3 Health and welfare

7.8 Administration and miscellaneous

8. Miscellaneous services

8.3 Financial management

8.4 Elections

8.5 Justice and consumer protection

8.6 Property damage

8.7 Markets and abattoir

8.8 Administration and miscellaneous

8.9 Lord Mayor’s allowance

8.10 Lord Mayor’s entertainment and travel allowance etc

8.11 Expenses of members of local authority & Representation at Conferences

8.12 Expenses of members attending conferences.

Appendix 3

figure a

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Bertz, J., Quinn, M. Interpreting management accounting rules: an initial study of public bodies. J Manag Control 24, 319–342 (2014). https://doi.org/10.1007/s00187-014-0185-7

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  • DOI: https://doi.org/10.1007/s00187-014-0185-7

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