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Making an accounting entity: the case of the hospital in Finnish health care reforms


  • Liisa Kurunmaki


This paper is about the making of an accounting entity. The entity is the hospital, and the context is the Finnish health care reforms of the early 1990s. These reforms, which sought to make private sector accounting principles central to this core field of the New Public Sector, had significant implications for the varied actors involved in the financing, production and consumption of health care. For the defining of the hospital as an accounting entity entailed a narrowing of the basis of accountability, and to this extent it came into conflict with the broader societal conceptions of accountability held by medical professionals. This narrowing of the basis of accountability, and the attempt to ensure that decisions concerning resource allocation and equipment purchase are similarly focused, is examined in this paper along with the reaction of medical professionals. Accounting is possible only when there is an area of economic interest that can be defined. Indeed, this is the essence of the entity concept in accounting. When a definable area of economic interest exists, it is possible to identify, accumulate, and report financial information about that entity as distinct from all other information. Without such an entity, accounting is impossible. (American Accounting Association, 1965)

Suggested Citation

  • Liisa Kurunmaki, 1999. "Making an accounting entity: the case of the hospital in Finnish health care reforms," European Accounting Review, Taylor & Francis Journals, vol. 8(2), pages 219-237.
  • Handle: RePEc:taf:euract:v:8:y:1999:i:2:p:219-237
    DOI: 10.1080/096381899336005

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    References listed on IDEAS

    1. K. Kesteloot & F. Penninckx, 1993. "The costs and effects of open versus laparoscopic cholecystectomies," Health Economics, John Wiley & Sons, Ltd., vol. 2(4), pages 303-312, December.
    2. William G. Ouchi, 1979. "A Conceptual Framework for the Design of Organizational Control Mechanisms," Management Science, INFORMS, vol. 25(9), pages 833-848, September.
    3. Arnold, Patricia J., 1991. "Accounting and the state: Consequences of merger and acquisition accounting in the U.S. hospital industry," Accounting, Organizations and Society, Elsevier, vol. 16(2), pages 121-140.
    4. Birnberg, Jacob G. & Turopolec, Lawrence & Young, S. Mark, 1983. "The organizational context of accounting," Accounting, Organizations and Society, Elsevier, vol. 8(2-3), pages 111-129, May.
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    1. repec:eee:crpeac:v:22:y:2011:i:1:p:1-19 is not listed on IDEAS
    2. Macinati, Manuela S. & Anessi-Pessina, E., 2014. "Management accounting use and financial performance in public health-care organisations: Evidence from the Italian National Health Service," Health Policy, Elsevier, vol. 117(1), pages 98-111.
    3. repec:eee:aosoci:v:59:y:2017:i:c:p:27-30 is not listed on IDEAS
    4. Malcolm Anderson, 2000. "Accounting History Publications 1999," Accounting History Review, Taylor & Francis Journals, vol. 10(3), pages 385-393.
    5. repec:eee:crpeac:v:22:y:2011:i:4:p:396-414 is not listed on IDEAS

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