Cost information in the new public sector environment : cost accounting change in a state-owned hospital

This paper reports on a case study of the utilisation and users of cost information in a state-owned teaching and research hospital in Australia. The findings indicate that the current utilisation of the cost information resides primarily at higher executive and managerial levels of the organisation. Organisational change, particularly pressure for improved productivity and competitiveness driven by public-sector reforms in Australia, is significantly filtering down throughout the subject hospital. Various productive and unproductive ways that cost information is used, and impediments to the use of costing information in the hospital setting, are identified.

Accounting measurement in the religious perspective : conservatism or optimism

This paper concerns about accounting measurements from the socio cultural values’ perspectives. By applying Hofstede (1980), Gray (1988), and Perera (1989) studies, first of all, the study develops a theory to concern about accounting values in a religious perception. Then Islam, as one of the most debatable religion in the world, is considered as an instance. Islamic compliance accounting measurement has developed in next stage to understand how the accounting value could be different from this viewpoint from the Western conservative historical cost. This study theoretically proves that Islamic compliance accounting measurement conforms to the exit price method which is different from the Western complaisance accounting measurement.

Evaluation of user perceptions of an application of activity-based costing

This study examined the extent to which preparers and end-users of Activity-Based Costing information are satisfied with this technique and the factors forming the basis of that belief.

Grid accounting service infrastructure for service-oriented grid computing systems

In this paper, we propose an architecture of accounting and payment services for service-oriented grid computing systems. The proposed accounting and payment services provide the mechanisms for service providers to be paid for authorized use of their resources. It supports the recording of usage data, secure storage of that data, analysis of that data for purposes of billing and so forth. It allows a variety of payment methods, it is scalable, secure, convenient, and reduce the overall cost of payment processing while taking into account requirements of Grid computing systems.

Secure accounting and payment infrastructure for grid computing

In this paper, we propose an architecture of accounting and payment services for service oriented grid computing systems. The proposed accounting and payment services provide the mechanisms for service providers to be paid for authorized use of their resources. It supports the recording of usage data, secure storage of that data, analysis of that data for purposes of billing and so forth. It allows a variety of payment methods, it is scalable, secure, convenient, and reduce the overall cost of payment processing while taking into account, requirements of Grid computing systems.

Agency theory and accounting research : an overview of some conceptual and empirical issues

This chapter aims to give the reader an overview of agency theory (AT) and its application in accounting research. It delineates the basic assumptions and concepts of AT and identifies the various measures that can be undertaken to minimise agency costs. The chapter also provides a summary of the commonalities and differences across the three major paradigms adopted by accounting researches when using an agency framework: Principal-Agent, Transaction Cost Economics and Positivist (Rochester) model. Further, a review of some recent theoretical and empirical studies on the design of optimal contracts, namely those relating to implicit contracts, multi-agents and multi-period issues is undertaken. Several suggestions are made for future studies adopting an AT-based approach.

Accounting services and SMEs : an Australian study

Background: The observance of regulation has become a fundamental part of life for the conduct of business around the world. Governments and their duly appointed designates, acting in the interest of the collective public, have relied on regulation to moderate economic and social behaviour through the imposition and enforcement of rules. While it can be commonly accepted that such a prescriptive framework may be necessary for the achievement of desired economic and social outcomes, regulation does impose costs on society and on individual firms. These costs, which can include the costs for government departments to administer, the cost for firms to comply, and the multitude of indirect costs such as lost innovation and productivity or their interrelated opportunity costs, have received ample attention.

Accountants are key advisers to all businesses on all aspects of doing business, including regulation. As such, it is appropriate that ACCA has sponsored this study, which explores the regulatory issues facing SMEs and the critical role that accountants and other organisations play in helping SMEs be aware of, comply with and generally manage effectively the regulations that apply to their business.

ACCA has consistently argued for a balanced view to be taken on regulation, recognising that certain rules are necessary for the fair development of business and for employees’ rights. Yet at the same time, ACCA recognises that SMEs are likely to be disproportionately burdened by regulatory requirements and, as a consequence, it actively campaigns for fairness in regulation, recognising the issue as a significant factor in the success, productivity and growth of small businesses.

Overview: This study complements similar research commissioned by ACCA in the United Kingdom and Canada (Blackburn et al. 2006), with the aim of helping to provide a more international picture of the effects of regulation on adviceseeking by SMEs and how accountants can help SMEs meet their regulatory obligations.

The research commenced in November 2006 and was conducted over the Australian summer period 2006/7, among SMEs and accounting practices, as follows:

* telephone survey among 250 SMEs
* postal survey among 130 accounting practitioner firms.

Key findings: The SME section of this study revealed the following points.

* Most SMEs (between 70% and 80%), agreed that the regulations under review were reasonable, however there were significantly high levels of concern regarding:
* the number of regulations affecting their business (80%)
* staying up to date with changing regulations (80%)
* complexity of regulation or the ease of understanding regulations (77%)
* inequity, or the cost of regulation in proportion to the business (66%)
* duplication, or being required to provide the same information to more than one government department (55%).
* External accountants were the most common source of advice, being used by 72% of SMEs; this was followed by federal government agencies,    62%; trade or industry bodies, 61%; and a lawyer or solicitor, 53%.
* Highest levels of satisfaction with the advice provided were recorded for lawyers/solicitors (94%), banks (91%) and external accountants (90%).
* Overall, 80% of SMEs who had used accountants rated their service as excellent or good. Thirty per cent gave accountants an excellent rating.
* Accountants rated particularly well on the following attributes:
* the potential for a long-term relationship with the business (81% excellent/good)
* technical understanding of the regulatory requirements that apply to the business (79%)
* ability to meet the needs of the business (77%)
* understanding of the business of the SME and its operations (73%).

The survey of accounting practitioners produced the following information.
* The results indicate that SME firms with fewer than 10 employees are the main source of revenue for the respondent accounting practitioners.
* Virtually all accountants provide regulatory advice, primarily in the areas of taxation (particularly Goods and Services Tax, GST), and Do-It-      Yourself (DIY) superannuation requirements. These services provided the accountants with their largest business growth in the two years before the time of the survey.

Seventy-nine per cent of accountants referred their SME clients to external professional advisers. Their comments indicate (see Appendix 4) that some accountants consider their role to be as convenors or advisers for their SME clients. Importantly, according to the accountants, SME firms with fewer than 10 employees did not update their knowledge of regulatory requirements; they relied on their accountant for the right advice. The main types of external adviser to whom accountants referred their SME clients were lawyers and financial planners.

* Accountants expressed their concern regarding the complexity and amount of regulations affecting their SME clients.
* The accountants also stated that they would like to provide additional advice to their SME clients.
 
Confidence intervals – SME survey:  The survey sample size was 250 SMEs from the total of 1.2 million Australian SMEs. Any estimate of proportions agreeing or disagreeing with particular statements must be considered with respect to the margin of possible statistical error. Owing to the small sample size, generalising the results from this study to a wider population of SMEs may be constrained.

A 95% confidence interval of the sample mean for the following estimates based on a percentage agreement of 75% to a proposition with a sample size of 250 would be from 69.5% to 80.5%. The 95% confidence interval for estimates of any other value will diverge slightly in magnitude from the numbers given.

In general then we can be highly confident that the actual sample mean will be within approximately ± 5% of the figure given, with a survey of this size. Confidence intervals – acounting practitioner survey IBISWorld estimates reveal a figure of 9,222 accounting practices in Australia as at June 2006 (IBISWorld 2007). The sample size of 133 accounting practitioners gives a 95% confidence limit that the results reported from the mail-out survey are within the ± 5% confidence interval of the reported values.

Conclusions:  This report describes the results of two parallel surveys undertaken on the impact of business regulation on small and medium-sized enterprises in Australia and on the perceptions of accounting firms about the ways in which the regulatory impact on the SME sector drove their business.

The survey of SMEs provides empirical support for many of the concerns raised with the Regulation Taskforce, which reported to the Australian government in 2006. Many businesses are concerned about the volume and complexity of government legislation as it applies to their business. They are concerned that they are unable to keep up with new legislation and that there is apparent duplication of reporting requirements across the various tiers of government.

The survey of accountants revealed that accounting firms derive a significant proportion of their revenue from SMEs. While the SMEs are concerned with regulatory changes, the accountants surveyed reported that the major growth areas in their businesses were in what could be seen as traditional accounting areas of tax and superannuation. Some SMEs sought advice on areas such as employment law, environmental regulation and health and safety but it appears that many accountants refer their clients to specialists in these areas. Recent changes to the laws regarding financial planning in Australia may lead to changes in the market for financial advice in Australia, with many accountants apparently regarding this as a key driver of future business opportunities.

The surveys were conducted using a similar instrument to similar surveys conducted in the UK and Canada and reported in Blackburn et al. (2006). Comparisons of the Australian survey results with those from the UK and Canada seem to support the perception that Australian business is not over-regulated, but the SME sector is concerned with the volume and complexity of regulation. This suggests that the SME sector wants to see improvements to Australia’s regulatory regime as a result of the work of the Regulation Taskforce undertaken in 2005/6. In its response to the work of the Taskforce the government agreed with 158 of the 178 specific recommendations of the Taskforce. This now needs to be followed through at all levels of government.

Accountants in all three countries understand their SME clients’ concerns with the burden of regulation and they are prepared to advise their clients where appropriate or refer them to specialist advisers. Most business growth for accountants has come from the taxation area. Very few accountants in the UK or Australia specialise in providing advice in the areas of environmental regulation or health and safety regulation.

International comparisons show that in all three countries accountants are generally highly regarded by SMEs for their professionalism and competence. The major area of client concern is the value for money offered by the accountant’s service. In an era of rapidly shifting professional and technical boundaries, accountants need to be more strongly attuned to levels of client satisfaction. Lawyers, financial planners and a plethora of specialist advisers operate in the business services market and if they have an opportunity to take business from accountants by competing on price they may well do so. This suggests a stronger role for professional accounting bodies in monitoring the broader business services market for opportunities and threats on behalf of their membership.

Prevalence and cost of musculoskeletal disorders: a population-based, public hospital system healthcare consumption approach.

Objective: To use a population-level, public-hospital approach to compare the prevalence and cost of musculoskeletal diseases (MSD) with other clinical specialties.

Methods: A healthcare utilization survey of 4 million individual records over 4 years, from all major public hospitals in the state of Victoria (estimated population 4.8 million residents in 2000/01) from 1997/98 to 2000/01. Main outcome measures were inpatient episodes of care, bed-days, and outpatient clinic encounters. MSD was defined as the combination of orthopedics and rheumatology.

Results: After obstetrics, MSD was the most frequent outpatient service, with orthopedics accounting for 9.9% of all visits in 2000/01. The proportion of MSD outpatient encounters (on average 11.6% of the total) was constant over the study period. Among 26 medical specialties, MSD had the sixth highest number of inpatient episodes (6.2% in 2000/01), following renal dialysis (14.6%), general surgery (8.2%), obstetrics (7.6%), gastroenterology (7.1%), and general medicine (6.7%). MSD was the fifth highest consumer of bed-days, occupying on average 7.7% of all beds per annum in the period 1997/98 to 2000/01, behind psychiatry (10.1%), respiratory medicine (8.5%), rehabilitation (8.3%), and general medicine (7.8%). MSD was the third most-costly discipline in 2000/01, with total costs of over A dollars 169 million (9.7% of total inpatient costs that year), behind respiratory medicine (11.6%) and general surgery (11.5%).

Conclusion: Compared to other diseases, MSD consumes a substantial proportion of healthcare resources in Victorian public hospitals. These data have important implications for allocation of healthcare resources, clinical care pathways, and prevention strategies.

Cost-efficacy of surgically induced weight loss for the management of type 2 diabetes : a randomized controlled trial

OBJECTIVE -- To determine the within-trial cost-efficacy of surgical therapy relative to conventional therapy for achieving remission of recently diagnosed type 2 diabetes in class I and II obese patients.

RESEARCH DESIGN AND METHODS -- Efficacy results were derived from a 2-year randomized controlled trial. A health sector perspective was adopted, and within-trial intervention costs included gastric banding surgery, mitigation of complications, outpatient medical consultations, medical investigations, pathology, weight loss therapies, and medication. Resource use was measured based on data drawn from a trial database and patient medical records and valued based on private hospital costs and government schedules in 2006 Australian dollars (AUD). An incremental cost-effectiveness analysis was undertaken.

RESULTS -- Mean 2-year intervention costs per patient were 13,400 AUD for surgical therapy and 3,400 AUD for conventional therapy, with laparoscopic adjustable gastric band (LAGB) surgery accounting for 85% of the difference. Outpatient medical consultation costs were three times higher for surgical patients, whereas medication costs were 1.5 times higher for conventional patients. The cost differences were primarily in the first 6 months of the trial. Relative to conventional therapy, the incremental cost-effectiveness ratio for surgical therapy was 16,600 AUD per case of diabetes remitted (currency exchange: 1 AUD = 0.74 USD).

CONCLUSIONS -- Surgical therapy appears to be a cost-effective option for managing type 2 diabetes in class I and II obese patients.

Recognition of idle resources in time-driven activity-based costing and resource consumption accounting models

Despite its theoretical superiority over traditional volume-based costing models, the Activity-Based Costing (ABC) model has failed to replace traditional volume-based costing models in most organisations. In response to the problems of the model, Time-Driven Activity-Based Costing (TDABC) and Resource Consumption Accounting (RCA) models have been developed as costing models for next generation cost management systems. A key feature that distinguishes TDABC and RCA models from traditional volume-based costing models and the ABC model is the recognition of idle resources in resource pools.

This paper presents a discussion on implications of recognising idle resources in TDABC and RCA models on developments, maintenance and uses of cost management systems. A hypothetical case is presented to illustrate conversions of an ABC-based costing model to ones that are based on the TDABC and RCA models, and the resulting new allocation of resource costs.