Accounting Disclosure in the Non-profit Sector: The Role of Stakeholders' Theory
DOI:
https://doi.org/10.56830/IJAMS07202201Keywords:
Accountability, NPOs, CAs, Disclosure, Stockholders' TheoryAbstract
Scientific research especially in social sciences is a result of accumulated experience and expertise from previous studies. this Research aims to examine the development of academic and professional accounting in Non-Profit sector from an international perspective by reviewing the previous literature associated with the comprehensive accounting function in Non-Profit sector, starting from the current accounting framework down to the role of the stakeholders' theory by summarizing and analyzing the accounting academic research findings in this area to identify the main strengths and weaknesses points. This will contribute to developing the comprehensive accounting function in the non-profit sector. Furthermore, in terms of the legislative and regulatory side. there are growing doubts about: is the accounting thought able to improve the financial regulation in NPOs in this way? The main motivation for the researchers to conduct this study was the findings of many academic studies that indicated the inadequacy of the current accounting framework and regulation (traditional) to meet the requirements of the accounting function in NPOs from the stakeholders’ perspective, The Researchers observed by tracking the accounting thought’s development in the financial accounting standards-setting process- in general – that it lies between two main perspectives. The first perspective considered the accounting standards’ development came to provide more information for decision-making, especially with the growing groups and requirements of stakeholders meanwhile the second perspective considered the accounting standards’ Development was a natural result of the business environment’s development and the need for new methods and tools by accounting function to give credibility and legitimacy to the organizations’ activities
References
Albaz, M., & Albaz, M. (2019). Core perspectives of performance measurement in NPOs: In search of accountability and legitimacy. Economic Archive, September.
Aldoseri, M.M., Albaz, M.M. and Ghali, A.A., 2022. The Managerial Determinants of Accounting Conservatism during COVID-19 Era: Evidence from Saudi Arabia. science information letters, 11, No. 3, 951- 957 DOI: https://doi.org/10.18576/isl/110326
Aldoseri, M. M., Albaz, M. M., & Ghali, A. A. (2022). The Impact of Organizational Characteristics on Corporate Cash Holdings: Evidence from Saudi Arabia During COVID-19 Period. science information letters. 11, No. 4, 1131-1136 DOI: https://doi.org/10.18576/isl/110415
Andreaus, M., & Costa, E. (2014). Toward an integrated accountability model for nonprofit organizations. Advances in Public Interest Accounting, 17. https://doi.org/10.1108/S1041706020140000017006 DOI: https://doi.org/10.1108/S1041-706020140000017006
Boomsma, R. (2021). On Jeffrey Unerman and the Future of NGO Accountability. Social and Environmental Accountability Journal, 41(3). https://doi.org/10.1080/0969160X.2021.2003215 DOI: https://doi.org/10.1080/0969160X.2021.2003215
Breen, O. B. (2013). The Disclosure Panacea: A Comparative Perspective on Charity Financial Reporting. Voluntas, 24(3). https://doi.org/10.1007/s11266-013-9377-2 DOI: https://doi.org/10.1007/s11266-013-9377-2
Chikoto, G. L., & Neely, D. G. (2014). Building Nonprofit Financial Capacity: The Impact of Revenue Concentration and Overhead Costs. Nonprofit and Voluntary Sector Quarterly, 43(3). https://doi.org/10.1177/0899764012474120 DOI: https://doi.org/10.1177/0899764012474120
Clarkson, M. E. (1995). A Stakeholder Framework for Analyzing and Evaluating Corporate Social Performance. Academy of Management Review, 20(1). https://doi.org/10.5465/amr.1995.9503271994 DOI: https://doi.org/10.2307/258888
Clerkin, B., & Quinn, M. (2021). Institutional agents missing in action?: Management accounting at non-governmental organisations. Critical Perspectives on Accounting, 80. https://doi.org/10.1016/j.cpa.2020.102276 DOI: https://doi.org/10.1016/j.cpa.2020.102276
Connolly, C., & Hyndman, N. (2013). Charity accountability in the UK: Through the eyes of the donor. Qualitative Research in Accounting and Management, 10(3–4). https://doi.org/10.1108/QRAM-02-2013-0006 DOI: https://doi.org/10.1108/QRAM-02-2013-0006
Cordery, C. J., & Baskerville, R. F. (2007). Charity financial reporting regulation: A comparative study of the UK and New Zealand. Accounting History, 12(1).
https://doi.org/10.1177/1032373207072806 DOI: https://doi.org/10.1177/1032373207072806
Costa, E. (2014). Voluntary disclosure in a regulated context: The case of italian social enterprises. Advances in Public Interest Accounting, 17. https://doi.org/10.1108/S1041706020140000017009 DOI: https://doi.org/10.1108/S1041-706020140000017009
Epstein, M. J., & McFarlan, F. W. (2011). Measuring the efficiency and effectiveness of a nonprofit’s performance. Strategic Finance, 10(October).
Esteban, S. A., Urquía-Grande, E., de Silva, A. M., & Pérez-Estébanez, R. (2022). Big Data, Accounting and International Development: Trends and challenges. Cuadernos de Gestion, 22(1). https://doi.org/10.5295/CDG.211513SA DOI: https://doi.org/10.5295/cdg.211513sa
Freeman, R. E. (2015). Strategic management: A stakeholder approach. In Strategic Management: A Stakeholder Approach. https://doi.org/10.1017/CBO9781139192675 DOI: https://doi.org/10.1017/CBO9781139192675
Gazzola, P., Amelio, S., Papagiannis, F., & Michaelides, Z. (2021). Critical Perspectives on Accounting Sustainability reporting practices and their social impact to NGO funding in Italy. DOI: https://doi.org/10.1016/j.cpa.2019.04.006
Critical Perspectives on Accounting, 79.
Goncharenko, G. (2021). In the spotlight: Rethinking NGO accountability in the #MeToo era. Critical Perspectives on Accounting. https://doi.org/10.1016/j.cpa.2021.102308 DOI: https://doi.org/10.1016/j.cpa.2021.102308
Harrison, J. S., & van der Laan Smith, J. (2015). Responsible Accounting for Stakeholders. Journal of Management Studies, 52(7). https://doi.org/10.1111/joms.12141 DOI: https://doi.org/10.1111/joms.12141
Hooper, K., Sinclair, R., Hui, D., & Mataira, K. (2008). Financial reporting by New Zealand charities: Finding a way forward. Managerial Auditing Journal, 23(1). https://doi.org/10.1108/02686900810838173 DOI: https://doi.org/10.1108/02686900810838173
Hyndman, N., & McMahon, D. (2010). The evolution of the UK charity Statement of Recommended Practice: The influence of key stakeholders. European Management Journal, 28(6). https://doi.org/10.1016/j.emj.2010.06.004 DOI: https://doi.org/10.1016/j.emj.2010.06.004
Kaba, M. (2021). NGO accountability: A conceptual review across the engaged disciplines. In International Studies Review (Vol. 23, Issue 3). https://doi.org/10.1093/isr/viaa094 DOI: https://doi.org/10.1093/isr/viaa094
Kingston, K. L., Furneaux, C., de Zwaan, L., & Alderman, L. (2020). From monologic to dialogic:
Accountability of nonprofit organisations on beneficiaries’ terms. Accounting, Auditing and
Accountability Journal, 33(2). https://doi.org/10.1108/AAAJ-01-2019-3847 DOI: https://doi.org/10.1108/AAAJ-01-2019-3847
Kober, R., & Thambar, P. J. (2021). Coping with COVID-19: the role of accounting in shaping charities’ financial resilience. Accounting, Auditing and Accountability Journal, 34(6).
https://doi.org/10.1108/AAAJ-09-2020-4919 DOI: https://doi.org/10.1108/AAAJ-09-2020-4919
Kuruppu, S. C., Dissanayake, D., & de Villiers, C. (2022). How can NGO accountability practices be improved with technologies such as blockchain and triple-entry accounting? Accounting,
Auditing and Accountability Journal. https://doi.org/10.1108/AAAJ-10-2020-4972 DOI: https://doi.org/10.1108/AAAJ-10-2020-4972
Kuruppu, S. C., & Lodhia, S. (2020). Shaping accountability at an NGO: a Bourdieusian perspective. Accounting, Auditing and Accountability Journal, 33(1). https://doi.org/10.1108/AAAJ-092016-2696 DOI: https://doi.org/10.1108/AAAJ-09-2016-2696
Ledgerwood, J. R., & Morgan, S. N. (2012). Problems of maintaining adequate accounting records for a non-profit organization in Sub-Saharan Africa. Review of Business and Finance Studies, 3(2).
Lopez-Arceiz, F. J., Bellostas, A. J., & Moneva, J. M. (2021). Accounting Standards for European Non-profits. Reasons and Barriers for a Harmonisation Process. Accounting in Europe, 18(1). https://doi.org/10.1080/17449480.2020.1795215 DOI: https://doi.org/10.1080/17449480.2020.1795215
Mack, J., Morgan, G. G., Breen, O. B., & Cordery, C. J. (2017). Financial reporting by charities: a matched case study analysis from four countries. Public Money and Management, 37(3). https://doi.org/10.1080/09540962.2017.1281638 DOI: https://doi.org/10.1080/09540962.2017.1281638
Mitchell, R. K., Van Buren, H. J., Greenwood, M., & Freeman, R. E. (2015). Stakeholder Inclusion and Accounting for Stakeholders. Journal of Management Studies, 52(7).
https://doi.org/10.1111/joms.12151 DOI: https://doi.org/10.1111/joms.12151
Mizutani, F. (2016). Issues Related to Accounting Education for NFPs in the U.S. Open Journal of
Accounting, 05(01). https://doi.org/10.4236/ojacct.2016.51001 DOI: https://doi.org/10.4236/ojacct.2016.51001
Pianezzi, D. (2021). We are what we tell: an enquiry into NGOs’ organizational identity and accountability. Accounting, Auditing and Accountability Journal, 34(8).
https://doi.org/10.1108/AAAJ-06-2020-4647 DOI: https://doi.org/10.1108/AAAJ-06-2020-4647
Preite, D., & De Matteis, F. (2014). Non Profit Entities and Multi-Stakeholder Relations: Some Highlights on Accountability Management from the Italian “Pro-Loco” Organizations1.
Procedia Economics and Finance, 15. https://doi.org/10.1016/s2212-5671(14)00474-2 DOI: https://doi.org/10.1016/S2212-5671(14)00474-2
Roberts, R. W. (1992). Determinants of corporate social responsibility disclosure: An application of stakeholder theory. Accounting, Organizations and Society, 17(6). https://doi.org/10.1016/03613682(92)90015-K DOI: https://doi.org/10.1016/0361-3682(92)90015-K
Saxton, G. D., Kuo, J. S., & Ho, Y. C. (2012). The Determinants of Voluntary Financial Disclosure by Nonprofit Organizations. Nonprofit and Voluntary Sector Quarterly, 41(6). https://doi.org/10.1177/0899764011427597 DOI: https://doi.org/10.1177/0899764011427597
Seddon, J. (2010). Debate: The moral of morale. In Public Money and Management (Vol. 30, Issue 6). https://doi.org/10.1080/09540962.2010.524999 DOI: https://doi.org/10.1080/09540962.2010.524999
Sreedhar, K. R. (2021). Companies (CSR) Amended Rules 2021 – Imperative of Management Accounting for Partner NGOs and Best Practices for Successful Corporate NGO Partnership.
The Management Accountant Journal, 56(7). https://doi.org/10.33516/maj.v56i7.84-88p DOI: https://doi.org/10.33516/maj.v56i7.84-88p
Stănciulescu, E. (2021). LLC vs. NGO, Similarities and Differences in the Accounting Treatment of Intangible and Tangible Assets. CECCAR Business Review, 2(6). https://doi.org/10.37945/cbr.2021.06.02 DOI: https://doi.org/10.37945/cbr.2021.06.02
Thomas, C. (2020). Legitimacy & Accountability in Government-NGO Relationships. Political Science Undergraduate Review, 5(1). https://doi.org/10.29173/psur132 DOI: https://doi.org/10.29173/psur132
Torres, L., & Pina, V. (2003). Accounting for Accountability and Management in NPOs. A Comparative Study of Four Countries: Canada, the United Kingdom, the USA and Spain.
Financial Accountability and Management, 19(3). https://doi.org/10.1111/1468-0408.00174 DOI: https://doi.org/10.1111/1468-0408.00174
Travaglini, C. (2011). Improving NPOs’ Accountability in the Enlarged EU: Towards a Common Framework for Financial Reporting in European NPOs. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1247143 DOI: https://doi.org/10.2139/ssrn.1247143
Ullmann, A. A. (1985). Data in Search of a Theory: A Critical Examination of the Relationships among Social Performance, Social Disclosure, and Economic Performance of U. S. Firms. The
Academy of Management Review, 10(3). https://doi.org/10.2307/258135 DOI: https://doi.org/10.2307/258135
Urquía-Grande, E., Lorain, M. A., Rautiainen, A. I., & Cano-Montero, E. I. (2021). Balance with logic-measuring the performance and sustainable development efforts of an NPO in rural Ethiopia. Evaluation and Program Planning, 87.
https://doi.org/10.1016/j.evalprogplan.2021.101944 DOI: https://doi.org/10.1016/j.evalprogplan.2021.101944
van Puyvelde, S., Caers, R., du Bois, C., & Jegers, M. (2012). The Governance of Nonprofit
Organizations: Integrating Agency Theory With Stakeholder and Stewardship Theories.
Nonprofit and Voluntary Sector Quarterly, 41(3). https://doi.org/10.1177/0899764011409757 DOI: https://doi.org/10.1177/0899764011409757
Yekini, K. C., Yekini, L. S., & Ohalehi, P. (2020). Review of environmentalism and ngo accountability. In Advances in Environmental Accounting and Management. DOI: https://doi.org/10.1108/S1479-3598202109
https://doi.org/10.1108/S1479-359820200000009001 DOI: https://doi.org/10.1108/S1479-359820200000009001
