Public Sector Reforms: Changing Role of Accounting in New Zealand Public Health Sector

The New Public Management (NPM) reforms have significantly changed the traditional public healthcare system in New Zealand. Particularly, financial accountability has been introduced to the healthcare system as a part of these changes. Consequently, accounting has become an essential tool in improving the financial efficiency of the healthcare system. However, an increasing concern placed on financial accountability has also created some negative outcomes. Public sector service organisations such as healthcare providers have a social responsibility towards the public. In this context, the narrow definition given to the concept of 'accountability' has been identified as a key contributor to existing problems. Thus, these institutions should use accounting not only as a tool of improving the financial efficiency but also as an effective mechanism in delivering the social accountability.