The Issue of Accounting Entity Definition in Regards to Noms in the Area of a Public Company in the Uk

1368 Words Feb 29th, 2012 6 Pages
The UK public sector has been transformed over the past few decades. In an increasingly global economy, the main lever by which central governments can influence the success of the domestic economy is by ensuring its public sector operates efficiently. The central governments of the developed economies have adopted similar change agendas to transform their public sectors. These change agendas entail the introduction of new structures, new kinds of organizations and a ‘reinvention’ of many parts of the public sector. The intention of successive governments has been the creation of a ‘New Public Sector’, which is more strategic and corporate in its thinking. This ‘New Public Sector’ is intended to replace a public sector characterized by …show more content…
Despite of that definition, the creation of an accounting entity is also a political process with potentially huge implications. Kurunmäki states that the boundaries which describe an organization as an economic unit separate from other units are not as clear-cut, natural or fixed as the accounting entity assumption implies . To which extent does NOMS now fulfill the above described requirements? What are the issues involved in the representation of NOMS as an accounting entity? By defining NOMS as an accounting entity, the financial controls involved seek to limit accountability to the very institution which is fair to say and in line with the so-called market-based New Public Sector reforms (Arnold, 1991). As a consequence, NOMS has to face the challenge to act within a managerial, instead of an administrative culture. When looking for example at healthcare reforms throughout Western Europe during the late 1970s and 1980, we find out that before introducing those reforms and seeing hospitals as accounting entities, several problems occurred: Poor management followed by arm’s length management, with organizational actions guided by practices rooted in a rationality that privileged “professional” or “clan” over “bureaucratic” or “managerial” forms of control (Kurunmäki, 1999). These associated problems could be