Bradshaw, John, Hills, Joanne, Hunt, Chris, and Khanna, Baghwan (2007) Can budgetary slack still prevail within New Zealand's new public management? In: Proceedings of the Thirtieth Annual European Accounting Association Conference. From: Thirtieth Annual European Accounting Association Conference, 25 - 27 April, 2007, Lisbon, Portugal.

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Abstract

The New Zealand (NZ) Government began its public sector reforms in 1984, with a central focus of changing the accounting culture. The purposes of the reforms were to build a more open public sector, a plainer and clearer way of reporting, emphasising accountability and transparency (Wallace, 1993). Central to the reforms was the adoption of accrual accounting and a 3-year budgeting and planning management cycle within Government Ministries. By establishing whether or not budgetary slack is used as a risk management strategy in NZ's new public management (NPM) control setting, this study examines how successful the reforms are, more that 20 years after their inception. Budgetary slack is the excess requirements for resources or understatement of productive capability. Slack allows a budget to be easily achieved and gives a false perception of managers' performance, defeating the basic purpose of budgets. As little research has been conducted on this phenomenon in NZ's NPM, this study was undertaken. Using budgetary slack and earnings management literature, an empirical model is developed to examine whether the potential for budgetary slack exists in NZ Government Ministries. The five Ministries of: Health, Education, Transport, Justice, and Housing, were chosen for this study. They provide a mix of sizes and are very topical for some specific reasons within the political arena. Results of this study will be of interest to the Government, public sector managers, taxpayers, other stakeholders, and academics.

Item ID:	10227
Item Type:	Conference Item (Research - E1)
Keywords:	budgetary slack; uncertainty; accrual accounting; accountability; managerial performance; public sector reform; new public management
Date Deposited:	10 May 2010 03:05
FoR Codes:	15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1501 Accounting, Auditing and Accountability > 150105 Management Accounting @ 100%
SEO Codes:	97 EXPANDING KNOWLEDGE > 970115 Expanding Knowledge in Commerce, Management, Tourism and Services @ 100%
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