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The Adoption of Accrual Accounting in Indonesia: A

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The Adoption of Accrual Accounting in Indonesia: A THE ADOPTION OF ACCRUAL ACCOUNTING IN INDONESIA: A STORY OF SEEKING LEGITIMACY, DEVELOPING HEGEMONY AND CONFUSIONS Tri Jatmiko Wahyu Prabowo A thesis submitted to Macquarie University in fulfillment of the requirement for Doctor of Philosophy FACULTY OF BUSINESS AND ECONOMICS MACQUARIE UNIVERSITY 2015 DECLARATION+ ! I!certify!that!the!work!in!this!thesis!entitled!“The+Adoption+of+Accrual+Accounting+ in+ Indonesia:+ A+ Story+ of+ Seeking+ Legitimacy,+ Developing+ Hegemony+ and+ Confusions”! has! not! previously! been! submitted! for! a! degree! nor! has! it! been! submitted!as!part!of!requirements!for!a!degree!to!any!other!university!or!institution! other!than!Macquarie!University.! ! I!also!certify!that!the!thesis!is!an!original!piece!of!research!and!it!has!been!written!by! me.! Any! help! and! assistance! that! I! have! received! in! my! research! work! and! the! preparation!of!the!thesis!itself!have!been!appropriately!acknowledged.! ! In!addition,!I!certify!that!all!information!sources!and!literature!used!are!indicated!in! the!thesis.! ! ! Signature:! ! Full!Name! :! Tri!Jatmiko!Wahyu!Prabowo!! Student!ID! :! 42499801! Date! :! 30!August!2015! ! ! ! ! i ACKNOWLEDGEMENTS+ ! This!PhD!research!has!been!a!long!voyage,!the!destination!unknown!until!this!thesis! is! submitted.! Often! during! this! voyage! I! was! lost,! sometimes! I! felt! alone! and! I! stumbled!many!times.!These!obstacles,!however,!have!only!made!the!reaching!of!my! destination! more! worthwhile,! and! outweighing! the! challenges! was! the! pleasure! of! scholarship!and!the!gaining!of!knowledge,!which!has!given!me!a!different!perspective! of!the!social!and!academic!world.!! ! I!would!like!to!express!my!sincere!appreciation!to!all!those!who!accompanied!and! supported!me!along!the!voyage.!It!would!not!have!been!possible!for!me!to!finish!this! doctoral!thesis!without!the!help!and!support!of!important!people!around!me.!! ! First,!my!gratitude!to!my!principal!supervisor,!Professor!Philomena!Leung,!and!my! associate!supervisor,!Professor!James!Guthrie.!Without!them,!I!would!not!have!the! wonderful!opportunity!to!study!at!Macquarie!University,!to!live!in!Australia,!and!to! take! this! PhD! journey.! They! have! advised,! guided! and! provided! feedback! on! the! methodology! of! my! research! and! the! writing! of! the! thesis.! Their! experiences! and! insights!have!significantly!influenced!every!stage!of!my!research.!Academically,!I!am! inspired!by!their!knowledge!and!wisdom.!At!the!end!of!the!journey,!I!consider!them! not!only!my!supervisors,!but!also!lifetime!friends!and!advisors.!! ! I!also!take!this!opportunity!to!thank!the!members!of!staff!at!the!Faculty!of!Business! and!Economics!who!have!provided!me!with!support!during!my!PhD!study,!such!as! Professor! Lorne! Cummings,! Mr! Eddy! S! Dharmadji,! Ms! Lin! Bai,! Ms! AgniesZka! Baginska,!Ms!Jee!Young!Cang,!and!Ms!Kaleen!Heng.!I!am!also!grateful!to!Macquarie! University!for!providing!a!different!kind!of!support,!in!terms!of!financial,!academic! and!technical!facilities.!! ! Finally,!I!want!to!express!my!appreciation!to!my!parents,!and!my!beloved!wife!Maal! Naylah,! and! my! children! Mimi,! Nayo,! and! Fatih! for! their! love,! understanding,! ii reassurance!and!unqualified!support.!When!I!started!this!PhD!journey,!I!had!never! before! left! my! family! for! more! than! a! month.! At! that! time,! I! dreamed! about! them! every! day.! The! love! and! support! from! my! family! helped! me! to! go! through! this! research!journey!until!I!reached!my!destination.! ! Lastly,!I!would!like!to!thank!my!flat!mates!—Andy,!Jerrico,!Adit,!and!Wisnu!—!and!the! Indonesian!PhD!students!—!Linggar,!Aji,!Agus,!Susan,!Albert,!Twediana,!Erna,!Anita,! and!Yusnita.!Because!of!them!and!their!families,!I!did!not!miss!Indonesia!so!much.!! ! ! ! 30!August!2015! ! ! ! ! ! ! iii ! ! ! ! ! ! ! ! to!Bunda,!Mimi,!Nayo,!and!Fatih! ! iv + LIST OF CONFERENCES ASSOCIATED WITH THE THESIS 1. Seventh Asia Pacific Interdisciplinary Research in Accounting (APIRA) Conference, Kobe 26–28 July, 2013 The paper "New Public Financial Management in Indonesia (1999–2012): Confusions in Implementation" was presented at the conference. The paper is the old version of the third paper (the fifth chapter of this thesis) "Analysis of Alignment between Public sector reforms in Indonesia and NPM". The paper, which was presented at the APIRA conference, contributed more than 70% of the contents of the third paper of this thesis. 2. The 15th CIGAR Biennial Conference, in Valletta (University of Malta), Malta, June 4–5, 2015. The paper “Hegemonic Process in accrual accounting adoption: Evidence from Indonesia” was accepted to be presented at the CIGAR conferences. The paper is the old version of the second paper (the fourth chapter of this thesis) “The Role of International Organisations in Accrual Accounting Adoption in Indonesia: Is it Coercive Influence?”. The paper, which was to be presented at the CIGAR conference, contributed more than 90% of the content of the second paper of this thesis. 3. Interdisciplinary Perspectives on Accounting (IPA) Conference, Stockholm, 8–10 July 2015 The paper "Accrual Accounting Adoption in Indonesia: Two Stories in Seeking Legitimacy" was presented at the IPA conference. The paper is the old version of the first paper (the third chapter of this thesis) “Two Stimuli in Accrual Accounting Adoption in Indonesia”. The paper, which was presented at the IPA conference, contributed more than 90% of the content of the first paper of this thesis. v + LIST+OF+ABBREVIATIONS+ ! ADB! :! Asian!Development!Bank! AUSAID! :!! Australian!Agency!for!International!Development! CIDA! :! Canadian!International!Development!Agency! CTA! :! Cash!toward!Accrual! DANIDA! :!! Danish!International!Development!Agency!! GATT! :! General!Agreement!on!Tariffs!and!Trade! GICB! :!! Government!Internal!Control!Board! GAS! :! Government!Accounting!Standard! GASB! :!! Government!Accounting!Standard!Board! GOI! :! Government!of!Indonesia! GSP! :!! General!Service!Providers! GFS! :!! Government!Financial!Statistic! IMF!! :!! International!Monetary!Fund! INTOSAI! :!! International!Organisation!of!Supreme!Audit!Institutions! IOPA! :! Institute!of!Public!Accountant! IPSAS! :!! International!Public!Sector!Accounting!Standard! IPSASB! :!! International!Public!Sector!Accounting!Standard!Board! MOF! :! Ministry!of!Finance!the!Government!Internal!Control!Board! MOIA! :!! Ministry!of!Internal!Affairs! NPM! :! New!Public!Management! NPFM! :!! New!Public!Financial!Management! OECD! :! Organisation!for!Economic!Co_operation!and!Development! SAI! :!! Supreme!Audit!Institution!of!the!Republic!of!Indonesia! SDC! :! Swedish!International!Development!Cooperation!Agency! UKAID! :!! United!Kingdom!Aids! UNDP! :!! United!Nations!Development!Programme!! US! :!! United!States! USA! :! United!States!of!America! USAID! :!! US!Agency!for!International!Development! vi TABLE+OF+CONTENTS+ THESIS+ABSTRACT+............................................................................................................+1+ CHAPTER+ONE:+INTRODUCTION+..................................................................................+5+ 1.1! MOTIVATION+.......................................................................................................................+5! 1.2! RESEARCH+DESIGN+.............................................................................................................+8! 1.2.1! Research!Questions!..................................................................................................................!8! 1.2.2! Research!Methodology!.........................................................................................................!15! 1.2.3.!! Data!Collections!....................................................................................................................!188! 1.3! AN+OVERVIEW+OF+INDONESIA+......................................................................................+25! 1.3.1! The!Indonesian!Government!Structure!.........................................................................!26! 1.3.2! A!Brief!History!of!Indonesia!...............................................................................................!28! 1.3.3! Public!Sector!Organisations!in!Indonesia!.....................................................................!31! 1.4! THESIS+OVERVIEW+...........................................................................................................+33! CHAPTER+TWO:+LITERATURE+REVIEW+..................................................................+38+ 2.1! ACCRUAL+ACCOUNTING+IN+PUBLIC+SECTOR+REFORMS+.......................................+38! 2.2! NEW+INSTITUTIONAL+THEORY+....................................................................................+47! 2.2.1! The!Decision!Making!Models!.............................................................................................!48! 2.2.2!! Isomorphism!and!Legitimacy!in!the!New!Institutional!Theory!..........................!51! 2.3+! NEOVLIBERALISM+IDEOLOGY+........................................................................................+54! 2.3.1!! Neo_liberalism!and!Globalisation!....................................................................................!55! 2.3.2! The!History!of!the!IMF!and!the!World!Bank!...............................................................!57! 2.3.3! The!Role!of!the!IMF!and!the!World!Bank!in!Proliferating!Neo_liberalism!.....!59! 2.4+! SUMMARY+...........................................................................................................................+60!
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