Balancing Books

<p>This research is inspired by the complexities of the adoption of accrual accounting which</p><p>have been widely explored in public sector accounting literature. This research intends to</p><p>explore the adoption of accrual accounting in the Indonesian public sector.</p><p>Using case-based research the research is underpinned by theory to interpret the process of</p><p>accrual accounting adoption in Indonesia and adopts qualitative research methods</p><p>including in-depth interviews with senior regulators of public sector reform in Indonesia</p><p>and extensive reviews of documents and archives to construct a historical analysis of</p><p>public sector accounting in Indonesia.</p><p>Paper one identifies events that stimulated the adoption of accrual accounting in</p><p>Indonesia. In-depth interviews were conducted with senior accountants involved in setting</p><p>the regulations of these public sector reforms in order to gain insight into the motivations</p><p>for adoption and the decision-making process of implementation. These interviews reveal</p><p>two milestones in the process of public sector accounting reform in Indonesia. The first</p><p>was the ratification of the Law of State Finance No. 17/2003 in which there was a</p><p>stipulation that governments (both central and local governments) should implement</p><p>accrual accounting in 2008. Interviewees stated that this implementation of accrual</p><p>accounting was motivated by a desire to avoid sanctions from the International Monetary</p><p>Fund (IMF). The Government of Indonesia expected the IMF to provide bailout funds to</p><p>restore the Indonesian economy which had been devastated by the 1997 Asian Financial</p><p>Crisis.</p>