Nama : Nurul Huda Purbaya

NPM : 1806278945
SUMMARY
1. Accounting, Budgeting, and Control Systems in Their Organizational Context:
Theoritical and Empirical Perspectives by Eric G. Flamholtz

This paper suggests the idea that control system is actually more complex than what it
is defined in conventional managerial accounting theory. It argues that accounting and
budgeting are a part of organizational control system that is core control elements. They
cannot be seen as a control system itself. It also argues that if an organization does not have
an adequate essential prerequisites of a control system, the system may not work as it is
intended to be. The paper then examines the relationship between accounting and budgeting
in the context of overall organizational control system from both theoretical and empirical
perspective in three organizations.
The result reveals that the idea mentioned above is proven to be true. Control system
in an organization is practically more complex than what conventional managerial
accounting theory has proclaimed. Budgeting as well as accounting system are merely a part
of a broader concept of control system. The control system will not work well if some
essential prerequisites are not sufficiently presented. Furthermore, the result also indicates
that an organization’s culture plays an important role in a control system. A firm’s culture
must be synchronized with its core control system to influence the behavior in its intended
ways. In the end of the paper, the writer suggests more empirical studies of accounting,
budgeting, and control in actual organization settings to enrich the understanding of the role
of control in complex organizational situation.

2. Political Relationships, Global Financing, and Corporate Transparency: Evidence

from Indonesia by Christian Leuz and Felix Oberholzer-Gee

This paper analyzes the relation between political connection, firm’s strategic choices,
and their long-run performance using Indonesian data. It first examines the link between
political ties and firm’s global financing strategies. Secondly, it examines the long-run
consequences of investments in political relationships.
The result of this study shows that well connected companies tend to have less global
financing because the already have the access to preferential domestic financing. Moreover,
foreign financing obstructs those companies to get private control benefit. They also dislike
the transparancy and scrutiny of publicly traded securities.
From the second examination, this paper finds out that investments in political
relationship are less likely to be a source of long-term value in such instable
macroeconomic dan political environment. When the political connection is no longer
valuable, foreign financing becomes more attractive. This paper also concludes that in
emerging markets where political connections are still important, financial liberalization
will be difficult to happen. Well connected companies are expected to resist the changes in
domestic institution because they want to have less competitors and avoid corporate
transparancy which are required by global financing.