Understandability and Transparency of the Financial Statements of ...

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process. This was facilitated by all participants being assigned a number to ensure their identities remain confidential. These numbers were allocated in an „ad hoc‟ manner so that nothing could link to any interviewees‟ details. Interviewees were also assured that no identifying information would be included in the study. This was of particular concern to some interviewees, especially from umbrella organisations, that were very aware that, given the close nature of the charities sector, they could easily be recognised if any details were given. 4.9 Summary The current research is an investigation into the complexities of transparency and understandability of the financial statements of charities. This chapter discusses why the naturalistic paradigm which was used to frame the current research was chosen. It then considered the implications of each of the five axioms of naturalistic inquiry with regards to the current research. Then the two methods of data collection, document review and interview, were analysed. How this data was metamorphosed into information was then discussed before consideration was given as to how the data was evaluated and then finally a review was made of the ethical implications of this research. This chapter determines that accountability is the „best fit‟ for the study and this will be analysed in the next chapter. 96
CHAPTER 5: ACCOUNTABILITY 5.1 Introduction Accountability is the theoretical lens through which the results of this research will be viewed. But the theoretical concept of accountability adopted here needs to be explicated first, since accountability is a wide and loosely used term found in all aspects of society. The structure of this chapter is set out as follows. First, the chapter theorises the general view of accountability before focusing on charitable accountability. Then the chapter assesses Fishman‟s (2007) two key questions to be resolved regarding accountability: to whom are charities accountable, and how can accountability be discharged? Second, the chapter will examine the relationships between the accountability concept and both transparency and governance. Third, the chapter will consider different concepts of accountability before finally analysing some of the limitations of accountability. 5.2 Theorisation of Accountability Ebrahim (2003) considers that accountability is a term that often evades clear definition. This is seen even in the dictionary where the Penguin English Dictionary (2000) gives eleven different definitions for accountability. Hyndman and McDonnell (2009) also highlight that accountability may have more than one meaning. Hence, authors have been grappling with the definition of accountability for many years. The seminal work by Stewart (1984) gave an overview of several older definitions and identified that there were two parts to accountability prevalent in these definitions - the need for information, i.e. „the account‟, and the judgement or „the holding to account‟. Roberts and Scapens (1985, p. 447) incorporated these two strands in their definition of accountability as the: “Giving and demanding of reasons for conduct”. The last ten years has seen an increasing body of literature on accountability. Some authors have not attempted to enter into the quagmire of definitions in their particular article but have stated accountability as a term that assumes understanding before focusing on a particular aspect of accountability such as the discharge mechanisms (Adams, 2004; Association of Chartered Certified Accountants, 2006; Brennan & Solomon, 2008; Dicke, 2002; Lee & Fisher, 2007; Lindkvist & Llewellyn, 2003; Watts, 97
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Understandability and Transparency
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CHAPTER 2: REGULATORY & CONCEPTUAL
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4.3.3 Axiom 3 - The possibility of
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6.6 Summary .......................
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Appendix One - Statement of Financi
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Abbreviations AASB Australian Accou
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Related Research Outputs The follow
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Acknowledgements My journey through
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Abstract Access to charities‟ fin
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CHAPTER 1: INTRODUCTION 1.1 Introdu
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More importantly the study will loo
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Unerman and O‟Dwyer (2008, p. 801
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adopted here is clarified, as the l
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March 1999. Further, a study by the
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those by: Vatter (1947); Anthony (1
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CHAPTER 2: REGULATORY & CONCEPTUAL
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(k) The erection, laying out, maint
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Before looking at the legal structu
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2.3.4 Problems As with charity nome
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yet to be determined. This ensures
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per annum (Charities Commission, 20
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certain cases there will be concept
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The focus of the Charities Commissi
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Unlike incorporated societies, the
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2.4.4.4 Future conceptual framework
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problems with New Zealand‟s regul
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This research seeks to identify if
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charities” (Charity Commission, 2
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statements in different documents t
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seek to identify whether a lack of
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In the international arena transpar
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Page 65 and 66: 3.2 Complexities in Charities’ Fi
Page 67 and 68: 3.2.1 Accounting basis The „Accou
Page 69 and 70: application of the appropriate GAAP
Page 71 and 72: length transaction”. This definit
Page 73 and 74: There are four arguments against de
Page 75 and 76: Financial Accounting Standards Boar
Page 77 and 78: al., 2008; Newberry, 1992; Rees & D
Page 79 and 80: However, the notion of control is a
Page 81 and 82: Kilcullen et al., 2007b). Charities
Page 83 and 84: the amount of money spent on admini
Page 85 and 86: This research seeks to identify wha
Page 87 and 88: As a result of the literature revie
Page 89 and 90: the elements of the world, or rathe
Page 91 and 92: come about through the mutually sim
Page 93 and 94: Research reports from other organis
Page 95 and 96: clearer picture of the interviewee
Page 97 and 98: In England, Palmer and Randall (200
Page 99 and 100: APPROACHING PARTICIPANTS Within the
Page 101 and 102: availability of charities‟ financ
Page 103 and 104: As credibility was usually achieved
Page 105 and 106: clarifications. This approach was u
Page 107 and 108: to understand the meaning behind an
Page 109 and 110: analysis is both complete and impar
Page 111 and 112: subjective realities (Chua, 1986).
Page 113: To assure the study was dependable
Page 117 and 118: emphasis on the definition of accou
Page 119 and 120: supposition was that a lack of resp
Page 121 and 122: general public (Charity Commission,
Page 123 and 124: assumes the other is monitoring the
Page 125 and 126: performance reporting rather than f
Page 127 and 128: appropriate performance information
Page 129 and 130: examiners and the Charities‟ Boar
Page 131 and 132: which was set up in 2003. Charity a
Page 133 and 134: Western Australia, all financial st
Page 135 and 136: The fourth level of independent exa
Page 137 and 138: What are the major areas of concern
Page 139 and 140: subset of good accountability pract
Page 141 and 142: Programme refers to a meeting of ob
Page 143 and 144: ecording property, plant and equipm
Page 145 and 146: Figure 6-2 Dimensions of Financial
Page 147 and 148: Because the [charity‟s] finances
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Page 151 and 152: that you can use it [the stove] for
Page 153 and 154: the organisation pay to have those
Page 155 and 156: contributors twice - first to fund
Page 157 and 158: There is a need to record restricte
Page 159 and 160: charity will have control of a seco
Page 161 and 162: of accountants involved in Charitie
Page 163 and 164: their decision making. One auditor
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Whilst the sample in this thesis is
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Another problem my study found was
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framework funders would not be able
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The lack of professionalism must be
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New Zealand‟s charitable purpose
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We have since February of last year
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analysis was done of the first comp
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Also the idea of members „taking
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The transparency of their organisat
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7.3 Monitoring As discussed in Chap
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Zealand] Statistics Department poin
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There was a sub-committee running [
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useful for smaller organisation and
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change and they‟re doing a good j
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problem that you‟ve [pause] we‟
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legislation and monitoring. Of part
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CHAPTER 8: PERFORMANCE ACCOUNTABILI
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In New Zealand both the Controller
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what proportion of their charitable
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None of the above reasons includes
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Charities Commission publication
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achieve an appropriate level of per
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more effectively in order to increa
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eneficiaries‟ needs are met is an
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As well as setting aside reserves,
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The important aspect of the propose
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Mostly they [the funders] are worki
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eyond financial health to include
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8.4.4 Prescribed performance report
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impact they have on their beneficia
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statements, but also other mechanis
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compare different charitable organi
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shock when their accounts are eithe
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9.4 Academic Contribution This rese
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Outcomes (Effectiveness) Figure 9-1
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Charities Register, of which thirty
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success in their activities. For as
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Ahrens, T., & Chapman, C. S. (2006)
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Australian Accounting Standards Boa
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Bradbury, M. E., & Baskerville, R.
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Charities Commission. (2009f). A sn
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commission.gov.uk/Our_regulatory_ac
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Cordery, C. J., & Baskerville, R. (
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Eisenberg, P. (Ed.). (2005). Challe
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Fremont-Smith, M. R. (2004). Pillag
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Hui, D. (2006). Financial Reporting
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http://www.ifac.org/Members/DownLoa
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Maxwell, J. A. (1992). Understandin
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http://www.nzica.com/AM/Template.cf
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O'Sullivan, N., & O'Dwyer, B. (2009
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Robson, C. (1993). Real World Resea
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Television New Zealand (Writer) (27
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Appendix One - Statement of Financi
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Appendix Three - Semi-structured in
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Appendix Five - Participant informa
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Appendix Six - Transcriber’s Conf
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Heading 1 Heading 2 Heading 3 Prope
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