Power dynamics in Australian public sector accounting reform: A Machiavellian interpretation.

During the era of New Public Management from the 1970s to the 1990s, government accountability in Australia underwent a significant transformation from compliance to performance evaluation. This change underscores a Machiavellian interpretation presented in this paper, emphasizing the politicized and power‐driven nature of public sector accounting reforms. The Australian Government employed a commercial accounting model to legitimize these reforms, leveraging Machiavellian principles to strengthen political power. Despite the accounting profession's role in legitimizing public sector financial reporting, its control over Australian accounting standard setting diminished. The new public sector accountability framework allowed the shifting of blame to the profession when problems arose. An analysis of the New South Wales Government's journey through the reform, from embracing accrual accounting to rejecting heritage assets measurement and applauding fair value, illustrates the complex interplay between self‐interest and the protection of public interest. The Australian Government strategically enlisted the support of the outer fringe accounting profession and successfully instituted reforms premised on the principle of public accountability and liberty for Australian society. Once the reformer's goals were achieved, the facilitating elites found themselves marginalized from the bureaucratic group and power reclaimed deftly to the Government with CLERP reforms paving the way for the adoption of International Financial Reporting Standards. This shift exemplifies Machiavelli's perspective, where liberty is used as a means to garner public support and ultimately attain power, a strategy that continues to hold validity in contemporary political contexts. [ABSTRACT FROM AUTHOR]