Executive Summary

1. Introduction
Currently, Federal Government of Malaysia is recognising financial
transactions base on modified cash accounting basis.
According to New Economic Model for Malaysia: Concluding Part -
Strategic Policy Measures, it is insufficient to show a true picture of financial
health of the government, to enhance fiscal transparency as well as
accountability to the people.
Therefore adoption of accrual accounting is seem a must to facilitate
asset-liability management, and hence, comprehensive and prudent fiscal
management. esides, international good practice calls for e!panding
government financial information to include accrual accounting statements.
"n ## May $%##, &ato' (eri Mohd )a*ib bin Tun Abdul +a,a-, Malaysian
.rime Minister had announced that adoption of accrual accounting basis with
effective from # /anuary $%#0.
2. Objective
This paper e!amined how Federal Government of Malaysia generally and
Accountant-General's &epartment specifically manage change during the
transition period to accrual accounting basis from modified cash accounting
basis, based on Kotters Eight-Step Model for Change.
3. Methodology
1e have done the study mainly by des-top searching besides interviewing.
4. Kotter! Eight"Ste# Model $or %hange
The Kotters Eight-Step Model for Change may be group into three ma*or
phases2 3#4 creating a climate for change, 3$4 engaging and enabling the
whole organi,ation, and 354 implementing and sustaining the change. (ee
&igure 1.
&igure 1 Kotter! Eight"Ste# Model $or %hange
#
'. Ste# 1 Increa!e (rgency
67n this first step, change leaders must build a sense of urgency about the
needed change by heightening energy and motivation. To do this, they will
need to reduce fear, anger, and complacency that may have built up in their
organi,ations.8
"n 5% March $%#%, )ational 9conomic Advisory Council had issue New
Economic Model for Malaysia: Part 1 - Strategic Policy irections, discussing
current socioeconomic situation in Malaysia as compare to the developed
countries, goal and enablers. The goal of the )ew 9conomic Model 3)9M4 is
for Malaysia to be a developed and competitive economy whose people en*oy
a high :uality of life and a high level of income 3;(<#0,%%% = $%,%%% per
capita by $%$%4 resulting from growth that is both inclusive and sustainable.
"ne of the enablers is to strengthen the public sector.
This reiterated by New Economic Model for Malaysia: Concluding Part -
Strategic Policy Measures on 5% March $%#%, which detailed out strategic
policy measures to be ta-en in order to achieve the goal. "ne of the
measures is adopting accrual accounting under .ublic (ector Transformation.
$
As we may see that the government had created urgency and shown
seriousness to adopting accrual accounting from modified cash accounting in
order to achieve the national goal.
). (tep $ uild Guiding Teams
6>uotation8
9!amples
*. (tep 5 Get the ?ision +ight
6>uotation8
9!amples
+. Ste# 4 %ommunicate $or ,uy"In
6&uring this step, change leaders must deliver candid, concise, and heartfelt
messages about the change in order to create the trust, support, and
commitment necessary to achieve the vision.8
-. (tep 0 9nable Action
6>uotation8
9!amples
1.. (tep @ Create (hort-Term 1ins
11. (tep A &on't Bet ;p
12. (tep C Ma-e 7t (tic-
13. Conclusion
5
/c0no1ledgment
#. Accountant-General's &epartment
2e$erence!
#. D, New Economic Model for Malaysia: Part 1 - Strategic Policy irections,
)ational 9conomic Advisory Council, 5% March $%#%, .utra*aya.
$. D, New Economic Model for Malaysia: Concluding Part - Strategic Policy
Measures, )ational 9conomic Advisory Council, 5 &ecember $%#%,
.utra*aya.
5. Cohen, &an (., !he "earth of Change #ield $uide: !ools and !actics for
%eading Change in &our 'rgani(ation, Earvard usiness (chool .ress, $%%0,
oston.
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