Agencification and Accounting: How Dual Standards Work in the Indonesian Higher Education

The adoption and the importance of accrual accounting for government have expanded over in almost all countries. Following the global trend, the Indonesian administration has implemented the Government Accounting Standards... [ view full abstract ]

The adoption and the importance of accrual accounting for government have expanded over in almost all countries. Following the global trend, the Indonesian administration has implemented the Government Accounting Standards since 2005. This paper examines accounting practices in the higher education from the agencification perspective, by exploring the distinctive topics consisting of background of standard formulation, process of standard setting, design of accounting standard, and single standard dilemma. It focuses on examining the use of dual accounting standard in supporting agencification by employing case study, which is supported by descriptive statistical analysis, through an exploration in four different higher educations in Indonesia. The result shows that the central feature of accounting in the selected public service agency is unnecessary dual standards. Furthermore, there are serious constraints that could hinder the higher education to improve their reporting as some existing mechanisms make the accounting system unable to be maximally implemented. The weaknesses and the hindrances are particularly in the accounting system design.