Financial Accountability & Management, 24(2), May 2008, 0267-4424

GOVERNMENTAL ACCOUNTING IN NORWAY: A DISCUSSION WITH IMPLICATIONS FOR INTERNATIONAL DEVELOPMENT
NORVALD MONSEN∗
INTRODUCTION

The development of governmental accounting is now receiving increasing attention around the world. This fact is evidenced in different ways, including conference publications based on papers presented at CIGAR-conferences as well as other publications having their origin in CIGAR activities (CIGAR = Comparative International Governmental Accounting Research) (see particularly Bac, 2001; Bourmistrov and Mellemvik, 2005; Buschor and Schedler, 1994; Caperchione and Mussari, 2000; Chan and Jones, 1988/1990; Chan et al., 1996a; Lande and Scheid, 2006; and Montesinos and Vela, 1995 and 2002). Moreover, a few years ago, researchers from the CIGAR network cooperated in carrying out an extensive study of the accounting and budgeting reforms of nine European countries (Finland, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland and the United Kingdom) and the European Commission. The study is presented in the book entitled Reforming Governmental Accounting and Budgeting in Europe, edited by L¨der and Jones (2003a). The study reports: u
All of the countries covered by the study have embarked on reforms of the accounting and reporting systems for their core national or local governments towards full accrual accounting. Whereas all local government systems have been or are being reformed, in the national governments of Germany, Italy and the Netherlands the reform process has not yet started (L¨der and Jones, 2003b, p. 19; emphasis added). u

In January 2007, the European Federation of Accountants (FEE – The F´d´ration des Experts Comptables Europ´ens; i.e., the representative orgae e e nization of the accountancy profession in Europe) published a study entitled Accrual Accounting in the Public Sector (FEE, 2007a). Here, a questionnaire was sent to European countries, receiving answers from 22 countries. In a press release based on this study (FEE, 2007b), it appears that ‘European accountants support move to accrual accounting in the public sector’. Furthermore, in order to acquire a more global view than the European evolution, it is of interest to focus on the development of international public sector (governmental) accounting standards
∗ The author is from the Norwegian School of Economics and Business Administration (NHH: Norges Handelshøyskole). He would like to thank two anonymous referees for their comments, which substantially contributed to improve the reasoning in the paper. Address for correspondence: Norvald Monsen, Norges Handelshøyskole Helleveien 30, N-5045 Bergen, Norway. e-mail: norvald.monsen@nhh.no
2008 The Author Journal compilation C 2008 Blackwell Publishing Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
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. adding to our knowledge of governmental accounting developments around the world. regulatory level (accounting laws. 1995). governmental accounting in Norway. Based on the Norwegian experiences. 1998). Although the IPSASB develops governmental accounting standards using both the accrual basis of accounting and the cash basis of accounting.. issued by the International Public Sector Accounting Standards Board (IPSASB).152 MONSEN (IPSASs). Thereafter. 2006). which has been developed by Professor L¨der (L¨der. 1983. Hopwood. focusing on the introduction of accrual accounting. 1996b. In this section. primarily based on the accrual basis of accounting (IPSASB.. the paper will focus on the first two levels. which has not introduced accrual accounting in the governmental sector. including the theoretical level (accounting theories). IPSASs. The paper is structured as follows: the next section discusses accounting in its organizational context. we can conclude that the majority of the CIGAR literature has studied governmental accounting developments. studying the influences of accounting theories (theoretical level) on the evolution of national and local governmental accounting regulations in Norway (regulatory level). it encourages use of the accrual basis. followed by a comparison of commercial accounting and cameral accounting. standards and recommendations) and practical level (accounting practice) (see e. It is therefore also of interest to study a country. before the paper ends with a discussion and some conclusions for the development of governmental accounting both in Norway and internationally. This indicates that the international development of governmental accounting consists of introducing accrual accounting. In order to limit the discussion. Since Norway is such a country. the relationship between Journal compilation C 2008 The Author 2008 Blackwell Publishing Ltd C . defined as accrual accounting. If we take a closer look at the CIGAR literature (see above for references). Monsen and Wallace. and Mellemvik et al. and Monsen and N¨si.g. are presented and compared. In a study presented by the IPSASB. 1988).. in governmental organizations. the paper aims to present some conclusions for the further development of international governmental accounting. Since this model aims at explaining the process of introducing a an accounting innovation. ORGANIZATION AND ACCOUNTING Accounting should be studied in its organizational context (see e. or are in the process of introducing. it appears that 43 countries worldwide in 2006 to varying degrees have introduced. consisting of national governmental accounting and local governmental accounting. the purpose of this paper is to study the evolution of governmental accounting in this country.g. has u u been used as the dominating framework for analysing governmental accounting developments in many countries (see particularly Chan et al. Accounting developments can be studied at different levels. we will learn that the ‘Contingency model of governmental accounting innovations’. 1992 and 1994).

These resources can be used to pay for production factors (factor market). showing the input-output process and the monetary process of the firm. first by focusing on the organizational context of business enterprises and governmental organizations. p. which the enterprise needs for producing its products. a a C 2008 The Author Journal compilation C 2008 Blackwell Publishing Ltd . Business Enterprises vs Governmental Organizations The interactions of a business enterprise (firm) with its environment is illustrated in Figure 1. Furthermore. however. are illustrated in Figure 2. where production factors are converted into services (and products) and delivered to the receivers. and these borrowings must in turn be repaid in the form of loan instalments. By selling products (and services) to its customers (product market). It describes the input-output process. The interactions of a governmental organization with its environment. The same is true with regard to transactions with financial (capital) markets. Figure 1. respectively. however. 213). The figure illustrates that a business enterprise interacts with three different markets. more complicated than the corresponding process of a business Figure 1 The Capital Circulation Model of the Firm THE INPOUT-OUTPUT PROCESS EXPENDITURES REVENUES real input-output process FA CTOR MARKET production process cash monetary process PAYMENTS funds PAY MENTS repayments profit distribution PRODUCT MARKET CAPITAL MARKET THE MONETARY PROCESS Source: N¨si and N¨si (1997. a business enterprise could also borrow money from banks and other financial institutions (capital market). This input-output process is to a large extent similar in the business and governmental contexts. it receives financial resources.GOVERNMENTAL ACCOUNTING IN NORWAY 153 organization and accounting will therefore be discussed. The monetary process of a governmental organization is. and thereafter by comparing business and governmental accounting. relating the discussion to their organizational contexts.

. 1987). respectively. On the other hand.g. When referring to C 2008 The Author 2008 Blackwell Publishing Ltd Journal compilation C . payments for production factors and fees received for services (and products) delivered. when the later cash effect of the revenues and expenditures.154 MONSEN Figure 2 The Economic Process Model of Government ELECTORATE FINANCIAL MARKET Payments from debts and loans TAX PAY ERS Politicians Planning and control PRODUCTION FACTOR MARKET Budget-accounts Money focus THE MONETARY PROCESS payments fees cash input production process transfers output product/service receivers THE INPUT-OUTPUT PROCESS Source: Monsen and N¨si (1998. When referring to an accounting model reporting only the immediate cash effect of the revenues and expenditures. in the form of revenues earned or deferred and expenses incurred or deferred. it may also be of interest to focus on the accrual effect of the revenues and expenditures. while expenditures are defined as obligations for cash payments. Besides payments based on the input-output process transactions. in the form of accounts receivable and liabilities. 282).e. the term ‘financial (cash) accounts’ will be used. are reported in addition to the immediate cash effect. taxes. state grants and other money transfers play an important role in the governmental monetary process. either in the form of immediate or later cash inflows and immediate or later cash outflows. p. Revenues u are defined as claims on cash receipts. Business Accounting vs Governmental Accounting If we turn our attention to accounting. respectively. The revenues and expenditures will always have a financial (money/cash) effect. Figure 3. we will learn that the main accounting concepts are revenues and expenditures (see e. Furthermore. respectively. M¨lhaupt. a enterprise. the term ‘financial (money) accounts’ will be used. i.

allowing for reporting the performance (accrual) effect of the revenues and expenditures via the payment side (balance accounts) (see the lower part of Figure 1. traditional governmental accounting has focused on the money effect of the revenues and expenditures. Furthermore. namely the development of a control instrument. p. the double-entry bookkeeping method emerged in response to the needs of businessmen in Italy in the thirteenth century (Kam. Walb (1926) argues that the development of cameral accounting parallels that of business accounting. In particular. C 2008 The Author Journal compilation C 2008 Blackwell Publishing Ltd . showing the performance (accrual) result (see Monsen. the comparison of accounting figures with financial (money/cash) budgetary figures has also determined the financial (money/cash) focus of traditional governmental accounting.. the current versions of commercial (business) accounting and cameral (governmental) accounting will be presented and compared in more detail. for further details). The former method refers to the procedure of entering one amount on one side of a particular account. Over time. also see Kosiol. In the following section. Over the ages. governmental accounting has historically been different from business accounting. however. single-entry bookkeeping was developed to systematic single-entry bookkeeping. Since the governmental context (see Figure 2) has been different from the business context (see Figure 1). for an English summary of the historical development of cameral accounting). Hence. As reported by Lee (1986). which was developed in the German speaking countries (Austria. however. Moreover. the term ‘performance (accrual) accounts’ will be used. namely single-entry bookkeeping and double-entry bookkeeping. 1990. Kam. Basically. 19). For example. the preparation of accounting information for statistical purposes and the preparation of profit and loss accounts. p. Geometry and Proportions) in 1494 was the first book on double-entry bookkeeping to be published (see e. 1967. Germany and Switzerland. separating it from the performance (accrual) focus of business accounting. The latter method. This particular bookkeeping method will be revisited below. there are two main groups of bookkeeping methods to use in financial accounting.g. bookkeeping in the business sector has developed further. managing and controlling the money transfers have been specifically important in governmental organizations. and Luca Pacioli’s book Summa de Arithmetica Geometrica Proportioni et Proportionalita (Review of Arithmetic. either representing financial (cash) accounts or financial (money) accounts.GOVERNMENTAL ACCOUNTING IN NORWAY 155 such an accounting model.. since there are several money transfers (e. tax revenues and social security payments) without a service in return. Therefore. originally single-entry bookkeeping of cash transactions was the bookkeeping method used in the business sector. cameral accounting in its original version is such a traditional governmental accounting model. 1994) from about 1500. however. 2002. see Buschor. 29). 1990. In particular.g. refers to the procedure of entering two similar amounts on the opposite sides of two different accounts (debit = credit). business accounting could historically be characterized as representing financial (cash) accounts.

1967). and Kosiol. 1926..156 MONSEN COMMERCIAL ACCOUNTING VS CAMERAL ACCOUNTING Today. Monsen and Wallace. the net equity change C 2008 The Author 2008 Blackwell Publishing Ltd Journal compilation C ... Use of the merchant’s double-entry bookkeeping method allows reporting of the performance (accrual) result via both the payment side (cp. since other variants of double-entry bookkeeping will also be discussed in this paper.. 315) is used for this direct link between the profit and loss accounts and the balance accounts. 1990). 1995). This duality implies that there is a direct link between the balance accounts and the profit and loss accounts. I have chosen the adjective ‘merchant’ (English translation of the German adjective kaufm¨nnisch). thus using the term the ‘merchant’s double-entry bookkeeping a method’.g. implying that the balance accounts report total assets. In fact. receipt of new external loans) are reported on the debit and credit sides of the balance accounts only (and not in the profit and loss accounts). particularly by Germany (see e. 1965.g. Furthermore. which historically have been strongly influenced by continental Europe. p. see e. p.. see e. In the German literature one says that the profit and loss accounts and the balance accounts are prepared in verbundener Form (English translation: in a directly-linked way. Furthermore. cash transactions without an effect on the performance result (e. Inspired by Walb (1926).g. accrual accounting is prepared in the business sector. the term ‘commercial accrual accounting’ will therefore be used when referring to this particular accounting model. and in Norway the term kongruensprinsippet (English translation: congruence principle. This dual result presentation is made possible by adding profit and loss accounts (representing the activity side) to the balance accounts (representing the payment side) (Walb. Inspired by Perrin (1984) and Chan (2003).g. accrual accounting information can alternatively be prepared within cameral accounting. use of the merchant’s double-entry bookkeeping method allows for reporting the performance (accrual) result via both the payment side of the transactions (see the lower part of Figure 1) and the activity side of the transactions (see the upper part of Figure 1). 1998. as well as in the Nordic countries. using systematic singleentry bookkeeping. This is a likely reason why the term ‘accrual accounting’ is generally used. liabilities and equity as of the balance accounts date. Kam. In this paper. this particular variant is generally referred to simply as ‘double-entry bookkeeping’ or the ‘double-entry bookkeeping method’ (see e.g. However. The merchant’s double-entry bookkeeping method represents the original and dominating variant of double-entry bookkeeping. it is important to apply a more precise term than ‘accrual accounting’ when referring to the accounting model prepared by using the former method. Wysocki. However. Kinserdal. referring to accrual accounting prepared by using both double-entry bookkeeping and systematic single-entry bookkeeping. without any further specification. using double-entry bookkeeping. 43). This direct link has always played an important role in continental European countries. it is beneficial to add an adjective when referring to the particular double-entry bookkeeping method used in commercial accounting.

which is the advantage of using the merchant’s double-entry bookkeeping method compared to using the merchant’s single-entry bookkeeping method. p. the merchant’s double-entry bookkeeping method forms the basis of performance (accrual) accounts (see Figure 3. Thus. and the capital accounts. revenues earned minus expenses incurred as reported in the profit and loss accounts) (Walb. 367) in Monsen (2006a).GOVERNMENTAL ACCOUNTING IN NORWAY 157 as reported in the balance accounts) and the activity side (cp. where the performance result is reported via the payment side only.. the assets and liabilities describe the present position of an enterprise. 2006a). according to Kam (1990. As of a given date. also see Monsen. 37). In single-entry bookkeeping the present status is represented by a list of assets and liabilities. can be seen as a summary of past events. According to Walb (1926) it is precisely this dual and more informative presentation of the performance result (via both the payment and activity sides). then the cumulative past should equal the present. p. and the significant contribution of double-entry over single-entry is that the present financial status of a firm is fully accounted for by past events (Ijiri. If past events have been properly accounted for. but double-entry compels an accounting of the present by an appropriate set of capital accounts that captures the past events that led to the present position. the performance result). 362) and Figure 2 (p. including income (i. 9). accountability is the essence of double-entry.e. Hence. Ijiri (1967) focuses on two other dimensions of the double-entry bookkeeping method instead of the dual performance result presentation (via both the payment and activity sides): the essence of double-entry is that every increment is causally related to a decrement. 1982. we will learn that today there exist two main groups. namely administrative cameralistics and enterprise Figure 3 Cameral Accounting and Commercial Accounting Single-entry bookkeeping Systematic single-entry bookkeeping Double-entry bookkeeping COMMERCIAL ACCOUNTING CAMERAL ACCOUNTING The single-entry bookkeeping method of administrative cameralistics The systematic single-entry bookkeeping method of enterprise cameralistics The merchant´s double-entry bookkeeping method Financial (money) accounts Modified financial (money) accounts/ performance (accrual) accounts Performance (accrual) accounts Source: Developed Version of Figure 1 (p. C 2008 The Author Journal compilation C 2008 Blackwell Publishing Ltd . If we turn our attention to cameral accounting. 1926).

which allows the preparation of the performance result via the payment side only (see the lower part of Figure 1). Administrative cameralistics is therefore also developed for fulfilling the objective of payment control. use of the systematic single-entry bookkeeping method of enterprise cameralistics allows the preparation of the performance result via both the payment side (see the lower part of Figure 1) and the activity side (see the upper part of Figure 1). electricity companies). administrative cameralistics should help to control that public (tax) revenues are managed (money management) within the boundaries of a politically adopted budget (budgetary control). the net equity change during the accounting year) and in the profit and loss accounts (as the difference between revenues earned and expenses incurred). namely in the balance accounts (cp. Moreover. 2002). there are many money transfers without a service in return in governmental organizations. as pointed out above. and Monsen. 1990. immediate cash inflows and outflows as well as later cash inflows (accounts receivable) and later cash outflows (liabilities)). C 2008 The Author 2008 Blackwell Publishing Ltd Journal compilation C .e.g. While the merchant’s single-entry bookkeeping method forms the basis of financial (cash) accounts. an increasing number of governmental organizations established their own enterprises (e. Therefore. Administrative cameralistics use a developed version of single-entry bookkeeping.. the single-entry bookkeeping method of administrative cameralistics forms the basis of financial (money) accounts. which were more similar to business enterprises (being market-financed. 2006a.158 MONSEN cameralistics (Oettle. Hence. Administrative cameralistics were developed for use by the core part of a governmental organization. As a result. there is a general rule in the governmental sector saying that no cash can be received or paid by a person without receiving a previous or simultaneous payment instruction from another person having this competence. Over time. see Figure 2). budgetary control and payment control. The main objectives of this original version of cameral accounting are money management. the performance (accrual) result is reported in precisely the same two informative ways as it is reported when using the merchant’s double-entry bookkeeping method. with the objective of providing precisely the same type of information for the governmental enterprises as that which could have been prepared by using the merchant’s double-entry bookkeeping method. which can be referred to as the single-entry bookkeeping method of administrative cameralistics (Monsen. see Figure 3). showing immediate cash inflows and outflows. Enterprise cameralistics is the term used when referring to this particular version of cameral accounting. see Figure 3). a developed version of cameral accounting was worked out. In other words. however. which can be referred to as the systematic single-entry bookkeeping method of enterprise cameralistics (Monsen. which is primarily financed by tax revenues (see Figure 2). namely accrual accounting information. see Figure 1) than to the core governmental organization (being budget-financed. Enterprise cameralistics use a developed version of systematic single-entry bookkeeping. 2006a.. As distinct from the merchant’s systematic single-entry bookkeeping method. showing total revenues and expenditures (i.

2002. and Wysocki. 1998. 2002 and 2007). the regional governments and the municipalities). contributing to payment control. has an important significance. 2006a). 1926. arguing for the introduction of double-entry bookkeeping in national governmental accounting: This characteristic. translated from Norwegian)..GOVERNMENTAL ACCOUNTING IN NORWAY 159 The systematic single-entry bookkeeping method of enterprise cameralistics thus forms the basis of modified financial (money) accounts/performance (accrual) accounts (see Figure 3. use of the principle of double-entry bookkeeping was introduced in national governmental accounting from 1879. that bookkeeping according to the double-entry bookkeeping method is self. Monsen. and that this bookkeeping thus gives a strong guarantee for the accuracy of the closed accounts. Regarding the accounting (and budgeting) regulations. contributing to budgetary control. 2001. when preparing the accounts of the Ministry of Finance and the other departments. 1965 and M¨lhaupt. 1951.. including numerical examples (see Monsen. however. on which the utmost stress must be laid (STR1876. The literature about cameral accounting is basically published in German (see particularly Walb. for a a historical review of the appropriation guidelines). in 1876 Statsrevisonen (STR – Office of the Auditor General) prepared a document. Later versions have largely prolonged the principles introduced in the first version of these guidelines (see Tr˚lim et al. 1990. the budget and accounts should be prepared annually). the gross C 2008 The Author Journal compilation C 2008 Blackwell Publishing Ltd . Therefore. Moreover. GOVERNMENTAL ACCOUNTING IN NORWAY In Norway there are three levels of government.e. namely national. different regulations have been issued for the national government and for the local governments (i. as well as cash accounts.e. 2006a and 2007). u 1987). regulation how to prepare the budget and accounts of the national government. The main principles specified in the appropriation guidelines are the principle of annuality (i. are referred to these English language references. Historically. the cash principle (i. Johns. single-entry bookkeeping of revenues and expenditures were carried out. However.e. the Parliament adopted the bevilgningsreglement (appropriation guidelines). In later years. some English language articles referring to German cameral accounting have been published (see particularly.. non-German speaking readers interested in further derails about administrative and enterprise cameralistics.controllable. also see Monsen.. it was underlined that the national accounts should represent budgetary accounts. Based on this document. National Governmental Accounting National governmental accounting (and budgeting) in Norway is rooted in the Constitution of 1814. Oettle. In 1928. bookkeeping of immediate cash inflows and outflows). regional and municipal levels.

However. a special variant of double-entry bookkeeping.. see Figure 4). some exceptions to the cash a principle have been introduced. 3)..e. implying that the appropriation guidelines today contain a modified cash principle. however. 1998. 2005). even though they relate to the same activity) and the principle of comprehensiveness (i. referred to as ‘pilot units’. the principle of double-entry bookkeeping has been used in national governmental accounting since 1879. which uses the principle of single-entry bookkeeping. Another objective is Figure 4 Governmental Accounting in Norway. It can be observed that the objectives of Norwegian national governmental accounting are in accordance with the cameral financial objectives of money management. unlike cameral accounting. attempting to introduce the merchant’s double-entry bookkeeping method in ten selected government departments. It is of special interest to observe that the cash principle has always been a key principle in the appropriation guidelines. thus reducing the need for later budget adjustments).160 MONSEN principle (i. one should incorporate all expected cash flows in the budget. The main motivation for these attempts is a desire for reporting better cost information in general as well as a wish to establish a better platform on which to base cost analyses of different activities. budgetary control and payment control (Monsen. p. In order to prepare financial (cash) accounts by using double-entry bookkeeping. there has never been any doubt that the budget should also be prepared using the cash principle (Tr˚lin et al. Hence. Double-entry bookkeeping GOVERNMENTAL ACCOUNTING IN NORWAY The double-entry bookkeeping The double-entry bookkeeping method of national governmental method of local governmental accounting in Norway accounting in Norway Financial (cash) accounts Financial (money) accounts Journal compilation C C 2008 The Author 2008 Blackwell Publishing Ltd . this bookkeeping method cannot be used identically with the way the merchant uses it when preparing his performance (accrual) accounts. Even though this principle formally applies only to the accounts.e. referred to as the merchant’s double-entry bookkeeping method. the cash inflows and outflows should be reported separately.. Gradually. a pilot project is undertaken. 2006b. Today. which can be referred to as the double-entry bookkeeping method of national governmental accounting in Norway has been developed (Monsen.

pure cash accounts (Mellemvik. Thus.. there are extensive and detailed rules regulating local governmental accounting (and budgeting). something which has resulted in the fact that the cameral account has been specifically developed for contributing to such control (M¨lhaupt. Therefore. p. In Norwegian. Moreover. Moreover. Also. FR2000. having its origin in the term Anordnungsprinzip. it is of interest to observe that F1924 requires the bookkeeping of total revenues (i. F1957. the following subsequent regulations have been issued: F1941. translated from Norwegian). 60. several payments without a service in return are undertaken in governmental organizations. this principle of entering revenues and expenditures on the accounts is referred to by the term anordningsprinsipp. including the pilot units. such as F1883 required. namely controlling public (tax) money within the financial boundaries of a politically adopted budget. Hence. MF2000. 66) corresponds to the main objective of administrative cameralistics. in 1924 the principle of double-entry bookkeeping was introduced in local governmental accounting (F1924).GOVERNMENTAL ACCOUNTING IN NORWAY 161 to prepare a comprehensive overview of the assets and liabilities belonging to the national government (NOU 2003:06). the first local governmental accounting regulation (Forskrift = F) was issued in 1883. which are stated in the appropriation guidelines. As pointed out above. F1942. immediate and later cash inflows) and total expenditures (i.. F1993. the first local governmental accounting regulation was strongly influenced by cameral accounting. 1987. It is of special interest to observe that the pilot project of introducing the merchant’s double-entry bookkeeping method for preparing accrual accounting information (i. immediate and later cash outflows). among other things. FB2000. as opposed only to bookkeeping of immediate cash inflows and outflows.. F1990. Local Governmental Accounting As opposed to the few and general rules regulating national governmental accounting (and budgeting). F1971.e.e. It is therefore especially important with payment control in these organizations. performance (accrual accounts)) should not result in a new management procedure. 1987).e. and all government departments. The budgetary appropriations of the Parliament should continue to be based on the cash principle. it seems as if the cameral accounting system has made a hit. In particular. which is used in the German cameral accounting terminology. The accounts according to this regulation represent. should still use the cash principle in their official accounts. since 1924 we find a strong link between budgeting and accounting within local governmental accounting. the main objective of local governmental accounting (see F1936. In fact. Even though Norway C 2008 The Author Journal compilation C 2008 Blackwell Publishing Ltd . p. and required the local governments to prepare financial (cash) accounts: In the first Norwegian regulation (F1883). the cameral account has separate u columns for payment instructions and actual payments.

Although the results of these studies vary. Olson et al. using anordningsprinsippet (i. 2004). As a result of these requirements. bookkeeping of revenues and expenditures). In summary. having its origin in commercial accounting. F1942 requires the preparation of a payment instructions book in addition to the bookkeeping carried out by using the local governmental bookkeeping method (F1942. 2006a). p. there is a direct link between the balance accounts and the profit and loss accounts).e. also see Monsen. Paulson (2006. Hence. and using the merchant’s accounts (with debit and credit sides). neither can it be used identically with the way the principle of double-entry bookkeeping is used within national governmental accounting in Norway.. that one should be careful with introducing corporate (accruals-based) accounting systems in public sector (governmental) organizations.. 462) argue. pp. having its origin in cameral accounting. Bromwich and Lapsley. namely the introduction of New Public Management (NPM) in governmental organizations (see Hood. 2000. Guthrie. and Newberry and Pallot. the merchant’s double-entry bookkeeping method in their governmental organizations in order to prepare accrual accounting information. the principle of double-entry bookkeeping cannot be used identically within local governmental accounting in Norway as it is used within commercial accrual accounting. without first having received a payment instruction from another person. ter Bogt and van Helden. Pallot. Therefore. Furthermore. 1997. which is based on the bookkeeping of revenues earned and expenses incurred as well as the congruence principle (i.e.g. however.. an increasing number of countries have introduced. instead of using the cameral single-sided account (with such columns both on the revenue and expenditure sides). 1998..162 MONSEN has introduced the merchant’s double-sided account (with debit and credit sides without separate columns for payment instructions and actual payments). or are in the process of introducing. one wants to continue controlling that no cash is received or paid by a person. which can be referred to as the double-entry bookkeeping method of local governmental accounting in Norway (see Figure 4. 47–48) Journal compilation C 2008 The Author 2008 Blackwell Publishing Ltd C . 1998. o Robinson. p. 2002).g. the local governmental accounting regulations require the local governments to prepare financial (money) accounts. This development is strongly related to another international trend. 2001. Others have carried out empirical studies in public sector organizations in which accrual accounting has been introduced (e. who has the authority to issue such a payment instruction (payment control). 1997. (1998b. the double-entry bookkeeping method used within local governmental accounting in Norway represents a special variant of double-entry bookkeeping. Several other scholars have also questioned the usefulness of business-like accounting techniques in these organizations (e. DISCUSSION AND CONCLUSIONS Internationally. Brorstr¨m. and Monsen. 1985). 1998. where the focus is on immediate cash inflows and outflows. Falkman. 165).

which were more similar to commercial enterprises. Here it should be underlined that enterprise cameralistics was added to administrative cameralistics. And even though the international development towards the introduction of businesslike accounting techniques in the public (governmental) sector seems to have started in the latter 1970s and early 1980s (see Olson et al. being budget-financed. cameral accounting is offered for use in further developments of governmental accounting around the world. In fact.. Historically. which presents a summary of this German development in English). It is true. 1998a. also today. studies of older German literature reveal that such attempts took place in the German speaking countries much earlier (see particularly. being marked-financed.e. 1951. On the other hand. p. money management. Johns. due to the different organizational contexts of business (commercial) and public sector (governmental) organizations (compare Figures 1 and 2).. In order to satisfy this demand. Walb. 1965. Wysocki. that the current international governmental accounting context is different from the context of governmental accounting as it was earlier in Germany. however. 2002. the cameral financial objectives) are important objectives of governmental accounting in many countries. budgetary control and payment control. along with the objective of C 2008 The Author Journal compilation C 2008 Blackwell Publishing Ltd . that this particular accounting theory has much to offer researchers and practitioners engaged in developing governmental accounting. including Norway. Therefore. and also see Monsen. commercial accrual accounting) in governmental organizations. 1926. were used. including Norway. where the introduction of accrual accounting in the form of commercial accounting is replacing traditional governmental accounting in the form of financial (cash) accounts or financial (money) accounts. 17). It appears from the presentation of cameral accounting earlier in the paper. This was thus a development deviating from the current international development. commercial accrual accounting should not be the only accounting theory used as a framework for developing governmental accounting internationally. allowing the preparation of accrual accounting information (for governmental enterprises) as a supplement to the preparation of financial (money) information (for the core part of the governmental organization).GOVERNMENTAL ACCOUNTING IN NORWAY 163 underlines that most of them lead to a questioning of the accrual accounting movement (i. however.. namely accrual accounting information. Given these German experiences. aiming at fulfilling the objectives of money management. these attempts failed every time. a developed version of cameral accounting (enterprise cameralistics) was worked out with the purpose of preparing precisely the same type of information as the one prepared within commercial accounting. in which commercial and governmental accounting. something that may lead to more successful introductions of commercial accrual accounting in the public (governmental) sector. At the same time. than they were to the core governmental organization.e. a demand for accrual accounting information appeared in governmental enterprises. respectively. budgetary control and payment control (i. cameral accounting in the form of administrative cameralistics was developed for the core part of a governmental organization.

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