This paper provides empirical evidence which informs contemporary debates on developing international financial reporting standards for not‐for‐profit organisations (NPOs). Drawing on a global survey with respondents showing experience of NPO reporting in 179 countries, we explore: practice and beliefs about NPO financial reporting internationally; perceptions of accountability between NPOs and stakeholders; and implications for developing international financial reporting standards. Interpreting our research in the context of accountability, we find considerable support for developing international financial reporting standards for NPOs, recognising broad stewardship accountability to all stakeholders as important, but prioritising accountability upwards to external funders and regulators.

Charitable status is inherently linked in many jurisdictions with the requirement that an entity must be established for public benefit. But, until recently the public benefit principle had relatively little impact on the operations of most established charities. However, in England and Wales, reforms linked to the Charities Act 2006 led to a new requirement for public benefit reporting in the trustees' annual report (TAR) of every registered charity. This new narrative reporting requirement had the potential to affect the understanding of accountability by charities. The paper investigates the impact of that requirement through a study of over 1400 sets of charity reports and accounts and subsequent qualitative work with trustees and others involved in preparing TARs.

No abstract

No abstract

Financial reporting is an important aspect of not-for-profit organisations' (NPOs') accountability. Globally, numerous and varying regimes exist by which jurisdictions regulate NPO financial reporting. This article focuses on the normative question of whether international financial reporting practice should be developed for the NPO sector, with a view to reducing reporting complexities. We explore stakeholder perceived preferences on the nature and scope of any such standards, interpreting our findings through the lens of consequential and procedural dimensions of moral legitimacy. Using an international online survey of accountants, practitioners and users of NPO accounts with 600 responses from 179 countries, we found that 72% of survey respondents considered that international standards for financial reporting by NPOs would be useful. Others, however, were strongly opposed and there were differing views on the NPO size for which such standards should be required. Many respondents, especially those operating in developing countries, indicated moral legitimacy would be given to a standard if it could contribute to resolving the diverse and inconsistent demands for accounting and accountability information.