An Investigation of Nonprofit Reporting of Significant Diversions of Assets

Scheetz, Andrea M.; Wilson, Aaron B.; Dowis, William Brian

doi:10.2308/jfar-2020-018

Cited by 4 publications

(7 citation statements)

References 39 publications

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“…Similarly, several other authors have described the reporting shortcoming of the IRS Form 990 as either inaccurate or misleading (Archambeault et al, 2015;Gordon et al, 2007;Scheetz et al, 2021;Yetman and Yetman, 2012).…”

Section: Is It Time To Clean Up Tax-exempt Nonprofit Reporting In The...mentioning

confidence: 93%

“…Existing regulatory reporting requirements for tax-4 exempt nonprofits in the US is comprised of the Internal Revenue Service Form 990 or Form 990 EZ. Prior scholarship has identified the accountability, reporting, and comparability deficiencies associated with these forms of reporting (Archambeault et al, 2015;Gordon et al, 2007; McConville and Cordery, 2018;Scheetz et al, 2021). Many nonprofits also develop their own unique (unregulated) annual reports to disclose performance as they see fit.…”

Section: Introductionmentioning

confidence: 99%

“…Gamble and Muñoz (2022) find that policy and regulatory overindulgence, poor governance, as well as detection and prosecution inconsistencies, are damaging the potential value created by US nonprofits. The second issue with US tax-exempt nonprofits is a lack of reliable approaches to assess and compare their organizational impact (Archambeault et al , 2015; Gordon et al , 2007; Kroeger and Weber, 2014; Rawhouser et al , 2019; Scheetz et al , 2021; Willems et al , 2014). Together, these two prevailing issues – organizational accountability boundaries and impact assessment – slow the implementation of sustainable solutions (SDG 17).…”

Section: Introductionmentioning

confidence: 99%

“…First, we present an argument, based on extant evidence, that a drastic shift in the expectations and reporting practices of US tax-exempt nonprofits is needed. Existing reporting requirements of tax-exempt US nonprofits are chronically underdeveloped (Archambeault et al , 2015; Scheetz et al , 2021; Yetman and Yetman, 2012). We find that US tax-exempt nonprofits are largely free from any level of scrutiny, oversight or comparison.…”

Section: Introductionmentioning

confidence: 99%

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Is it time to clean up US tax-exempt nonprofit reporting?

Gamble

Muñoz²,

Fox³

2022

SAMPJ

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Purpose US tax-exempt nonprofits are chronically underdeveloped when it comes to reporting, communicating and comparing the value they create. This paper aims to explore an approach to address these reporting and disclosure issues, for the purpose of sustainability and impact. Design/methodology/approach First, the authors ask and then answer: is it time to clean up US tax-exempt nonprofit reporting? Second, the authors develop a theoretical argument, based on commensuration of impact, for a specific tax-exempt integrated report (IR), to compare the value of tax-exempt nonprofits. Third, this study offers an example of this tax-exempt IR in practice. Findings First, this study evidences the need for a drastic shift in the expectations and reporting practices of US tax-exempt nonprofits. Second, this study offers an IR framework that responds to recent scholarly calls to address organizational accountability boundaries and impact assessment in the nonprofit sector. Third, this contributes to sustainability policy conversation by mapping out an approach that US tax-exempt nonprofits could deploy to speed up the implementation of sustainable solutions (Sustainable Development Goal [SDG] 17). Practical implications This study contributes to sustainability conversation by closing with a discussion of why policymakers, managers and scholars should continue to push for maximum impact from US tax-exempt nonprofits. If addressing the UN SDGs is a desired outcome, then there is an immediate need for change in the way US nonprofits report what they do. This study suggests that learning from the European Union reporting practices and regulations will facilitate a move toward improved reliability, comparability and impact from US nonprofits. Social implications The aim of this paper was to present a disclosure framework that provides reliable and comparable information of the value created by tax-exempt nonprofits. This principle-based framework is rooted in the IR literature and extends into the prosocial world of tax-exempt nonprofits, recognizing that is it goes farther than simply being a framework; it is a social process. Originality/value This paper responds to recent calls for more oversight and comparison disclosure mechanisms of US tax-exempt nonprofits, for the purpose of reducing social or environmental inequality. The framework makes an important contribution to the field of sustainability accounting, in that it promotes a principle-based approach for measuring and regulating tax-exempt nonprofits, in a way that motivates oversight and comparison of sustainability-related practices.

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Section: Is It Time To Clean Up Tax-exempt Nonprofit Reporting In The...mentioning

confidence: 93%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Is it time to clean up US tax-exempt nonprofit reporting?

Gamble

Muñoz²,

Fox³

2022

SAMPJ

View full text Add to dashboard Cite

show abstract

“…Harris et al (2017) identify consistent evidence that good governance reduces asset diversion. Asset diversion is one of the methods used in insurance fraud and involves the theft of an insurance company’s assets (Scheetz et al , 2021). Mohd-Sanusi et al (2015) uncover that corporate governance can reduce insider fraud in the Malaysian banking sector.…”

Section: Impact Of Corporate Governance On Fraudmentioning

confidence: 99%

Elucidating corporate governance’s impact and role in countering fraud

Kassem

2022

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Purpose This paper aims to highlight the role and impact of corporate governance in combating fraud by drawing on insights from the literature, identify gaps in the literature and suggest new directions for future research. Design/methodology/approach The paper is based on a comprehensive general literature review using multiple search engines and databases. Findings This paper finds that effective corporate governance can help reduce fraud risk, prevent fraud and detect fraud, particularly corporate fraud, insider fraud and asset diversion. Some companies use corporate governance mechanisms to bolster their reputation following fraud detection. Ineffective corporate governance increases fraud risk, provides the opportunity for perpetrating fraud and reduces the likelihood of fraud detection. The paper sheds light on several governance mechanisms that could help in mitigating fraud risk, as reported in the literature. The paper categorises these governance mechanisms into four broad governance aspects, including board leadership and the role of ethics; (b) board characteristics, composition and structure; ownership structure; accountability. The paper proposes a guide summarising these broad fundamental governance aspects, including specific anti-fraud controls and examples of how organisations could enhance ethical cultures and the tone at the top. Originality/value To the best of the author’s knowledge, this is the first paper to elucidate the role of corporate governance in countering fraud and develop guidance in this area. The proposed guidance could be helpful to businesses leaders, policymakers, researchers and academics alike.

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Toward Automating Shredding Nonprofit XML Files: The Case of IRS Form 990 Data

Abu-Khadra

Olsen

2023

Journal of Information Systems

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This paper presents and describes data for nonprofit IRS filings in the United States of America. The data contains 831 attributes and 1,102,884 records for the years 2016-2021. Among other items, the data include nonprofits’ comparative financial data, governance disclosures, and hired contractors, as well as management compensation, a detailed statement of revenue, statement of functional expenses, external audit, federal audit election, and reconciliation of net assets. The data is generated using Structured Query Language (SQL) self-developed code to convert the IRS form 990 Extensible Markup Language (XML) tax filing files to a dataset in Excel. This paper is the first to convert these XML files and provide much-needed open access to nonprofit data in a long format that is useful for researchers to conduct cross-sectional analysis. The 2,174 lines of source code that we developed, and a step-by-step guide are included in this paper.

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An Investigation of Nonprofit Reporting of Significant Diversions of Assets

Cited by 4 publications

References 39 publications

Is it time to clean up US tax-exempt nonprofit reporting?

Is it time to clean up US tax-exempt nonprofit reporting?

Elucidating corporate governance’s impact and role in countering fraud

Toward Automating Shredding Nonprofit XML Files: The Case of IRS Form 990 Data

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