Description:
The not-for-profit sector is made up of approximately 700,000 entities employing around 600,000 people and controlling assets up to $70 billion, with the largest charities comparing favourably in size and value to big business. While it is expected that many charitable organisations are well-managed and make a significant contribution to society, a lack of good governance and/or accountability could have devastating affects on the community. Official inquiries into the not-for-profit sector have questioned the lack of transparency and accountability created by a complex legal and regulatory regime. Critics of the existing regime have called for reforms including mandatory financial reporting requirements and an independent regulator to enhance public accountability and organizational efficiency and performance. This study provides an insight into the financial reporting activities of Australia’s largest charities so as to provide a measure of the extent to which charities meet public expectations of accountability. This involved the examination of over 100 publicly available reports for charitable organizations and the administration of a questionnaire. The majority of charities examined in this study provide community, welfare or health services, employ over 100 employees, and rely on a similar number of volunteers to assist with their activities. We have attempted to shed light on a significant failure of the not-for-profit sector to date, in that although our research highlights inconsistencies in reporting formats, ambiguus financial information and a high proportion of qualified audit reports there is a strong belief from charity organisations that the public is entitled to receive quality information on financial performance, suggesting that increased financial disclosures would be beneficial to the charitable sector. Respondents supported ‘programme accountability’ (89.1%), ‘fiscal accountability’ (78.2%) and ‘profit’ (76.6%) as suitable measures of performance with the circumstances of not-for-profit organisations sufficiently different to require a specific and dedicated accounting standard for the sector.
Description:
Purpose - The purpose of this paper is to explore the perceptions of senior accounting officers on governance, performance and accountability issues in the charity sector. Design/methodology/approach - The empirical data presented in this paper were collected via a mail-out survey to Chief Financial Officers (CFO) of large charity organisations in Australia. Findings - The executives surveyed agreed that the public is entitled to receive high quality financial disclosures from charities, favouring "programme accountability", "fiscal accountability" and "profit" as relevant performance indicators rather than cash surplus/deficit. The respondents also considered that charities warrant a dedicated accounting standard but were less enthusiastic about an independent regulator with stronger control functions. Research limitations/implications - The data in this study report the opinions of financial executives which may not represent the view of all managing executives. Originality/value - While governance in charities has been examined previously from an organisational or management perspective, this is one of the few papers that emphasises how members of the accounting profession view this important topic.
Description:
In 2003, the International Federation of Accountants (IFAC) issued a set of International Education Standards (IES). IES 4 Professional Values, Ethics and Attitudes aims to equip candidates for membership of an IFAC member body with the appropriate professional values, ethics and attitudes to function as professional accountants. This paper explores the implications of IES 4 and analyses some of the challenges arising from an international professional accounting body prescribing ethics education. It concludes with an overview of considerations to be addressed to ensure that the implementation of IES 4 is successful.
Description:
Purpose - Given the calls for increased ethics education following recent corporate collapses, this paper aims to examine the significance of ethical issues that challenge the profession and, more specifically, professional accounting bodies. Design/methodology/approach - The study assesses the perceptions via an online survey of 66 professional accounting bodies worldwide in respect of ethical issues, potential causes of ethical failure and the need for ethics education. Findings - Respondents identified a number of important challenges including conflicts of interest, earnings management and whistle-blowing. The findings also demonstrate strong support for participation in prescribing the nature of ethics education by members of professional accounting bodies. Research limitations/implications - The results of this study are based on feedback from 41 per cent of member bodies of the International Federation of Accountants (IFAC). Despite a number of follow-up reminder notices, some regions are under-represented in the responses to the survey distributed to the (then) 160 member bodies of IFAC. Geographic isolation and language limitations contributed to the failure to gain a higher response rate. Practical implications - The findings demonstrate that professional bodies support ethics education at the pre- and post-qualifying levels of education and a willingness to take an active role in promoting ethics education to their members. Originality/value - By addressing member bodies' attitudes to ethics education, this paper fills a gap in prior literature that has been restricted to addressing the attitudes of academics, students and business organisations.
Description:
Purpose - Given the calls for increased ethics education following recent corporate collapses, this paper aims to examine the significance of ethical issues that challenge the profession and, more specifically, professional accounting bodies. Design/methodology/approach - The study assesses the perceptions via an online survey of 66 professional accounting bodies worldwide in respect of ethical issues, potential causes of ethical failure and the need for ethics education. Findings - Respondents identified a number of important challenges including conflicts of interest, earnings management and whistle-blowing. The findings also demonstrate strong support for participation in prescribing the nature of ethics education by members of professional accounting bodies. Research limitations/implications - The results of this study are based on feedback from 41 per cent of member bodies of the International Federation of Accountants (IFAC). Despite a number of follow-up reminder notices, some regions are under-represented in the responses to the survey distributed to the (then) 160 member bodies of IFAC. Geographic isolation and language limitations contributed to the failure to gain a higher response rate. Practical implications - The findings demonstrate that professional bodies support ethics education at the pre- and post-qualifying levels of education and a willingness to take an active role in promoting ethics education to their members. Originality/value - By addressing member bodies' attitudes to ethics education, this paper fills a gap in prior literature that has been restricted to addressing the attitudes of academics, students and business organisations.
Description:
The extent of fraud in large organistations is an increasing phenomenon. The implications of fraud are well known, in addition to the moneys lost from the fraudulent act, fraud has adverse effects arising from the negative publicity relating to the fraud. Responding to fraud represents a major challenge for business and the professions with considerable resources being devoted annually to fraud risk management and prevention.