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This article explains the structures and rules built into the New Zealand government’s financial management system which encourage entry into commitments such as public private partnerships. That the system provides a means of escape from the tight constraints imposed by fiscal targets, and escapes public and parliamentary scrutiny in the process, seems at odds with espoused objectives of fiscal responsibility, debt reduction and transparency. In terms of furthering a privatization agenda, however, it is highly logical.

The purpose of this paper is to examine the role of public sector accounting in implementing neoliberal reforms.

The proposition that the adoption and development of accrual accounting in the public sector is a technical development intended to improve transparency and accountability is investigated. The paper compares the development and use of accrual accounting in public sector financial management reforms in the UK and New Zealand.

The findings in this paper suggest that in both countries, accrual accounting, as developed, also provides a means to reduce the government's role to that of procurer of services and enforcer of rules set by others, thus advancing a controversial privatisation and trade liberalisation agenda which is consistent with neo‐liberal principles.

The paper shows that in contrast to more usual claims about the need for accrual accounting to provide a “read across between the sectors” or that public interest motives assure the neutrality of accounting, seemingly technical accrual accounting developments seem to function as a political tool to aid a controversial political agenda. There is a need to look at the overall effect of public sector financial management reforms and the role of, and implications for, accounting standard‐setters.

The information in the paper applies to accounting the new political economics literature on agenda control and information based structures where control is achieved through information asymmetries.

New Zealand is widely recognised as extreme in its New Public Financial Management reforms. Scrutiny of the reformed financial management system reveals its consistency with a controversial political agenda: trade liberalisation of even core social services such as social welfare, health and education. Further, the detailed requirements are systematically biased towards withdrawing from government services (by running them down) and/or privatising them (by artificially inflating reported costs, thus projecting an appearance of inefficiency). The legislation underpinning the New Zealand model was shepherded through parliament by a Minister of Finance who publicly opposed exposing social services to market forces. Drawing on archival records, this article provides a historical account of how this legislation came into being. The legislation handed key levers of power to extend the reforms to the Treasury. Particular attention is paid to the friction within the government of the time over extending the reforms to social policy, and the role of the Treasury. Possibly, some ministers who drove the reforms through did not appreciate their nature. Alternatively, the handover of the levers of power could be perceived as an attempt to avoid blame.

To provide comment on June Pallot's contribution to public policy debate in New Zealand.

A review of June's CV, interview and discussions with former colleagues from Wellington, and personal recollections of discussions.

Provides information about the manner in which public policy development and debate occurs in New Zealand, June's sustained efforts to contribute, and the contrast with her efforts at international level.

This paper points out that although this prominent international academic was marginalised and ignored in her own country, she continued trying to contribute to public policy development in her own country as well as internationally.

Purpose – Corporate governance requirements imposed internationally as part of the New International Financial Architecture (NIFA) include compliance with International Financial Reporting Standards (IFRS). The appropriateness of applying IFRS in developing countries has long been controversial. Recently, the International Accounting Standards Board (IASB) extended its project on IFRS for Small and Medium Entities (SMEs) to include developing countries. This paper provides a history of the controversy over IFRS in developing countries and examines the SMEs project as it affects developing countries.

Design/methodology/approach – This paper uses an agenda-setting theoretical framework and document analysis to analyse IASB's published documents as part of its formal due process.

Findings – The controversies surrounding the application of IFRS in developing countries seem likely to continue. The public submission process may be ineffective and too late for those seeking to influence IFRS developments. The findings suggest that those seeking IFRS for developing countries may need to both devise an acceptable solution and obtain inside access to the standard-setting process to achieve this aim.

Research limitations – The research is limited to literature review and documentary analysis and therefore subject to the known limitations of published project documentation in accounting standard-setting.

Originality/value – Contributes to understanding of international accounting standard-setting, including why developing country issues seem likely to continue.

My first scheduled meeting with June ended up with my not meeting her at all! But the circumstances of this occasion do provide the opportunity to give a flavour of this extraordinarily talented woman that we have sadly lost. It was August 1993 and I was an Erskine Fellow at the University of Canterbury in Christchurch, New Zealand, where she spent the last seven years of her busy and highly successful life. She was at this time on the staff of Victoria University in Wellington. I was invited to present a paper to the Department and gladly accepted since this would have given me an opportunity to meet June who had first come to my attention through her work on developing a theoretical framework for public sector accounting. On my arrival in Wellington I received a note from June to say that sadly, and with immense regret, she couldn't be at the seminar since she had to attend an important meeting with the Auditor General of New Zealand, which, despite her wish to meet me, was a commitment she just couldn't avoid. In fact, as I discovered, she had just started a two‐year secondment to the New Zealand Audit Office reporting directly to the Auditor General with a major policy brief that transpired to be highly influential to New Zealand Government thinking.