THE
TRANSFORMATION OF AN ACCOUNTING SYSTEM DURING ORGANISATIONAL CHANGE – A
LONGITUDINAL STUDY
DrBruce Gurd
Lecturer in Management,
International Graduate School of
Management
University of South Australia
ph 08 83020288
Abstract
Accounting
can both shape and be shaped by organisational reality (Nahapiet, 1988). This
paper focuses on the shaping of an ABC (activity based costing) system in a
public sector authority during a period of rapid change from 1994 to 1998. The
reasons why management invested substantially in such a system are first
outlined, and are compared and contrasted with the views of the employees. Over
time the ABC system became locked in as the transfer pricing system to meet the
needs of a new style of business unit accountability where quasi-profit centres
were set up within a traditional public sector authority. A new CEO eliminated
the profit-centre concept and returned to budgetary control as the primary form
of financial accountability. At this stage ABC became side-lined but was still
useful for strategic decisions relating to out-sourcing and improving lines of
business, more in line with its initial objectives. Finally, the paper explores
why ABC ceased to exist. It is a rare case of a longitudinal study of an
accounting technology in a public sector organisation and provides insights
into the moulding of accounting by organisational change.