This paper is extracted from a paper entitled "Employees' Cognition of Change, Internal Control and the Implementation Effect of Government Accounting Standards System" by Professor Li Jianfa from the Accounting Development Research Center/School of Management of Xiamen University, Dr Bao Lulu from the Accounting Department of School of Management of Xiamen University, Dr Chen Wenchuan (the correspondent) and Dr Yuan Lu, and published in Accounting Research.
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introduction
Under the background of comprehensively deepening the reform of the fiscal system, the Fourth Session of the 13th National People's Congress voted to pass the 14th Five-Year Plan for National Economic and Social Development in People's Republic of China (PRC) and the Outline of Long-term Goals in 2035, proposing to establish a modern fiscal and taxation financial system and enhance the government's economic governance capacity. As an important means of government governance and a basic technical tool of modern financial system, government accounting provides a basic support and an important pillar of state governance for optimizing government governance and perfecting modern financial system. The government accounting standards system, which has been fully implemented since January 1, 2019, requires all kinds of administrative institutions at all levels in the country to adopt the accounting model of double objectives, double systems, double elements, double foundations and double reports. However, China's administrative institutions have many unique features, such as a wide range of industries, many fields covered, great business differences, different implementation foundations, etc. (Lu Junwei et al., 2019). In the context of a huge number of subjects and complex administrative structure, government accounting reform is facing unprecedented difficulties and challenges. At the same time, the effectiveness of organizational reform will also have a broader and far-reaching impact on public services and resources. Therefore, it is of great significance to investigate the decisive factors of organizational change, examine the implementation of the system and the results of the change, and build a national governance system and theoretical framework with China characteristics, and guide the practice of government accounting reform. Based on this background, this paper takes administrative institutions in Guangdong Province as the research object, and discusses the influence of the informal system of employees' awareness of change on the reform of government accounting standards system through interviews and questionnaires.
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Employees' cognition of change and the implementation of government accounting standards system
In organizational change, when employees don't understand the goal of change, or lack effective communication, psychological preparation and ability expectation with the organization, the change process will be full of uncertainties (such as employees' worries about status loss, role conflict, job insecurity, and concerns about new job tasks and competence), so as to take a boycott attitude and choose acquiescence, compromise, avoidance, resistance, manipulation and other ways to hinder the implementation of the new system, which may eventually lead to the failure of the change. Studies have confirmed that employees' cognitive ability to change and psychological state affect the results of institutional change (Kim and Mauborgne, 2003; Yu，2009； Zhou Wencheng et al., 2020). According to Frederic Herzberg's two-factor theory, this paper holds that the cognitive level of organizational members' change will have two main influences on the implementation of the government accounting standards system: (1) The cognitive level of employees' change communication belongs to the "health factor" in the two-factor theory, and employees' change cognition is counterproductive to their feelings of change most of the time, especially in the initial stage, most employees will subconsciously have negative emotions such as worry and panic, and the cognitive level of change communication can improve employees' adaptability to change (Petrou, etc. Zhou Wencheng et al., 2020), which urges employees to clarify the purpose and significance of change, enhance their willingness to work and dedication, and then improve their support for change. (2) Employees' cognitive level of change benefits belongs to the "incentive factor" in the two-factor theory, and the existence of optimistic expectations will stimulate employees' subjective initiative. When employees expect that the implementation of the government accounting standards system will be conducive to the realization of organizational performance and subjective aspirations, they will reduce their resistance to change, thus promoting the smooth implementation of government accounting standards.
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The Mediating Role of Organizational Identity
Organizational identity has a profound impact on employees' perception and behavior of their functional procedures (Kim and Mauborgne, 2003; Chen Hao, 2012; Liu Xuefei, 2019; Zhou Wencheng et al., 2020). The transformation of government accounting standards system has higher requirements for personnel's skills and energy, execution and decision-making power, and the top-down policy implementation method is likely to produce a similar "policy discontinuity" effect in the organization; At this time, in the context of policy change, the cognitive difference of change will affect the attention distribution decision of members, and then affect the organizational identity level of members. Accordingly, in order to ensure the efficient and high-quality implementation of the government accounting standards system, financial personnel must have a correct and positive understanding of the change. A high level of cognition will improve employees' organizational identity, which in turn will affect the implementation of the system and the effectiveness of the reform. Therefore, this paper holds that the internalization process of change cognition will affect employees' recognition of the organization, and then act on the change process, which determines the implementation effect of the government accounting standards system.
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Adjustment function of internal control
Internal control is the basis for the government to fulfill its public fiduciary responsibility. High-quality government accounting information is conducive to enhancing the government's credibility, and the internal control system can provide an effective way for government accounting information to improve the government's credibility. Theoretically, internal control may have two effects on change cognition. On the one hand, internal control and change cognition complement each other. By reorganizing the existing business processes and formulating financial control measures that meet the requirements of financial management, administrative institutions have improved the work efficiency and management level of government departments and reduced the probability of fraud and mistakes; Internal control provides a more efficient information communication mechanism, and also effectively improves employees' cognitive ability and channels for change. Because the improvement of internal control can promote the information disclosure of the implementation of the accounting standards system by the government and relevant units, and thus play a positive role in employees' cognitive level, from the perspective of complementarity, high-quality internal control can strengthen the positive effect of employees' change cognition on the implementation effect of the government accounting standards system.
On the other hand, there may be substitution between internal control and change cognition. According to the theory of new institutional economics, informal institutions are contagious and often more binding than formal institutions. When the governance effects of formal institutions such as legal environment, regulatory system and internal control of units fail, more attention should be paid to the role of informal institutions. Therefore, in government units with imperfect internal control system, the role of informal system will be brought into play to a greater extent, and good change cognition as an informal system can make up for the negative impact of weak internal control on policy reform; On the contrary, in units with perfect internal control system, this promotion effect may not be obvious. Based on this, this paper holds that internal control will significantly affect the promotion of employees' change cognition to the implementation effect of government accounting standards system, but its adjustment direction depends on whether internal control and employees' change cognition are directly complementary or substitute.
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Main conclusions, research contributions and policy suggestions
This paper mainly discusses the influence of employees' change cognition on the implementation effect of the reform of government accounting standards system, as well as the intermediary role played by organizational identity and the regulatory role played by internal control. Based on the interview survey and questionnaire data of 1418 administrative institutions in Guangdong Province, the results of this paper show that: (1) employees' cognition of change positively affects the implementation effect of government accounting standards system; Organizational identity is a channel of this relationship; However, internal control weakens the positive relationship between employees' cognition of change and the implementation effect of government accounting standards system, indicating that employees' cognition of change, as an informal system, and formal systems such as internal control have a substitution relationship when they jointly play a role in organizational change. In addition, the expanding research of this paper also finds that the promotion of employees' change cognition to the implementation effect of government accounting standards system mainly exists in economically underdeveloped areas and county-level administrative institutions.
This study enriches the relevant literature on organizational change cognition, and examines the influencing factors of government accounting reform at the employee level, which provides useful thinking for strengthening the internal control construction of administrative institutions and provides practical guidance for legislative and law enforcement departments.
This paper puts forward some policy suggestions to the relevant parties in academic research and policy implementation: First, we should speed up the accounting reform of China government and give full play to the role of internal control system; Second, we should strengthen organizational communication and improve the cognitive level of financial personnel; Finally, we should promote the reform in various ways, improve the competence of financial personnel, open up practical consultation and answer channels, and promote the information communication and efficient implementation of government accounting reform.
