The uncertainties of risk management - A field study on risk management internal audit practices in a Finnish municipality

Purpose: The paper analyses the implementation of risk management as a tool for internal audit activities, focusing on unexpected effects or uncertainties generated during its application. &nbsp;Design/methodology/approach: Public and confidential documents as well as semi-structured interviews are analysed through the lens of Actor-Network Theory to identify the effects of risk management devices in a Finnish municipality. &nbsp;Findings: We found that risk management, rather than reducing uncertainty, itself created unexpected uncertainties that would otherwise not have emerged. These include uncertainties relating to legal aspects of risk management solutions, in particular the issue concerning which types of document are considered legally valid; uncertainties relating to the definition and operationalisation of risk management; and uncertainties relating to the resources available for expanding risk management. More generally, such uncertainties relate to the professional identities and responsibilities of operational managers as defined by the framing devices. &nbsp;Research limitations/implications: Risks do not &ldquo;exist&rdquo; before they are a fact that can be clearly witnessed and agreed upon by most parties; until then they are just a construction, a set of beliefs, which might or might not ever become a fact. Risk management is supposed to reduce uncertainty by following procedures dictated by the framing. However, that very framing generates overflowing and thus emphasises the debated and more or less controversial nature of the manner in which we calculate risks. &nbsp;Practical implications: Based on the study, we encourage COSO spokespersons, auditors and others involved to engage more thoroughly in the debate concerning whether risk management is, for instance, too bureaucratic and time consuming for operational managers and other organisational actors. &nbsp;Originality/value: The paper offers three contributions to the extant literature: first, it shows how risk management itself produces uncertainties. Secondly, it shows how internal auditors can assume a central role in the risk management system. Thirdly, it develops Callon&rsquo;s framing/overflowing framework with the notion that multiple frames are linked and create unexpected dynamics, and applies it to the study on the effects of risk management tools in an internal audit context. It shows how, despite recurring attempts to refine risk management, further uncertainties are continuously produced, thus providing an empirical illustration of how reframing and overflowing intertwine in a continual process.</p

Accounting and the emergence of care pathways in the National Health Service

This paper examines the effects of New Public Management reforms on the information infrastructure underpinning the work of public service professionals. Focussing on the case of the British National Health Service (NHS), the paper argues that hospital accounting reforms played a significant role in the emergence of standardised models of clinical practice. The paper moreover argues that, under the label “care pathways”, such standardised models of clinical practice became embedded in the information infrastructure of the NHS and concludes by discussing their implications for the work of doctors and hospital accountants

Exploring how the balanced scorecard engages and unfolds:Articulating the visual power of accounting inscriptions

Research on the Balanced Scorecard (BSC) has questioned whether its adoption generates greater integration between financial and nonfinancial performance measures, supports strategy implementation, increases performance and improves strategic decision making. This research has also highlighted how the BSC often generates effects other than these. Building on studies that portray Performance Measurement Systems as intrinsically incomplete practices of representation, the purpose of this article is to investigate how the BSC engages users because of the organizing work that it stimulates around this incompleteness. Our findings allow us to further articulate the power of specific visual elements of the BSC, such as hierarchical trees, wheels, causal and strategy maps. The article provides material that contributes to a better understanding of how the BSC performs multiple roles within organizations beyond a simple representational functionality and unfolds continuously. It contributes to the growing literature on accounting inscriptions, that is, signs producing incomplete representations, by developing an analytical theoretical framework that defines the BSC as a rhetorical machine composed of four key features: (i) a visual performable space (i.e., a schema generating creative engagement); (ii) a method of ordering and innovation; (iii) a means of interrogation and mediation; and (iv) a motivating ritual

The politics of accounting technology in Danish central government

The social and political aspects of a governmental computer-based accounting system (SCR) in Denmark will be examined. It is generally accepted that the SCR system has fulfilled a number of useful purposes. However, it has also been subjected to adverse criticism, as extensive, political implications have been detected in its application. In the study I have analysed the application of accounting technology from a political perspective. One of the main findings of this study indicates that the centralized management accounting system has implications for the balance between autonomy and control. It is suggested that centralized accounting technology creates a management view that symbolizes dependency and bureaucracy. If such an understanding of accounting technology is integrated with theories of management control, we may find that the SCR system will have an impact on the evolution of local management control in government agencies.

Auditing and blame games: a field study of the purification of blame avoidance in the Danish parliamentary system

Auditing and auditors have for long been involved with processes of blame allocation in terms of special audit cases and performance auditing. Despite this fact very few studies (with the exception for example of Radcliffe, 1997) have provided detailed empirical accounts on how auditing participate in blame allocation. This study sets out to study one case of blame allocation in terms of describing and characterizing the origins of failure and accidents leading to the need for blame allocation, the institutional entities and arrangements that participate in the blame game, and how these entities, including the supreme audit institution, are mobilized in the processes of blame allocation. The case is taken from the Danish National Police where a centralized accounting and budgetary function was reformed so as to facilitate a process of amalgamating 74 police districts into 12 larger districts. This decentralized management accounting and control reform misfired into a major public scandal and blame game that resulted in the dismissal of senior Police managers. Within that blaming, the National Audit Office of Denmark acted to purify the government and press choices to pinpoint a single actor as being responsible for the scandal. Our study extends Hood’s (2002 and 2007) research on blame and blame avoidance strategies by showing how a blame-frame (i.e. the various legal and non-legal frameworks that are related to blame allocation) is mobilized to evaluate and allocate blame. Further, it is noted that an audit institution (with its legal frameworks) became part of a scapegoating strategy to achieve blame avoidance. In this way the audit office, in its role of an expert, provided purity to blame avoidance and allocation, thus leading to the result that Parliament, the Minister of Justice, consultants, the Ministry of Finance, and others avoided being blamed – despite those actors being more or less involved with the failure or accident. The contribution of the paper is that it shows the mechanisms causing scapegoating of particular people and the role of auditors as experts in such mechanisms. It finally shows how a scapegoating process ‘re-boots’ a reform by erasing the reform’s problems and in so doing it protects not only the involved actors but also the economic and accounting ideals and rationalities drawn upon in the reform efforts. This can be seen as a means of the reform process maintaining, for the time-being, some of its relevance – even in controversial and hot situations