Understandability and Transparency of the Financial Statements of ...

This view is supported by Fishman (2007, p. 15):
The resources required to put in place an effective system of accountability
would be immense, and with few exceptions it has never been thought efficient
or worthwhile.
Whilst several people consider that this is justification against charitable accountability,
this does not hold true given the various frauds and other misdemeanours taking place
within charities. As Eisenberg (2008, p. 1) further states:
Inappropriate behaviour and excessive compensation are still a regrettable part
of our world. Non-profits are fighting hard against more regulation and
scrutiny, but self-reform, however attractive to a self-indulgent charity
community, is not an adequate substitute for tougher regulations and
enforcement.
Ken Berger of Charity Navigator puts it succinctly by saying:
We must get past the notion of doing the „good work‟ with no accountability. We
must get past the idea that nonprofits are too complex or unique to be measured.
The nonprofit sector must get its act together and make sure it is really helping
provide meaningful change in communities and people‟s lives. It is life or death
for many of those we serve whether we are effective or not (Berger, 2009, 1
December, p. 3).
Accountability is seen as important for the charities sector in maintaining the confidence
and financial support of the public by giving an account of charities‟ activities. As the
charities sector plays such a rich and varied role in modern society, the sector‟s
continued success is dependent upon the public‟s trust and confidence in their work.
Thus a recognised definition of accountability, with all it entails, is an important aspect
to the sector‟s continued success.
5.3 To whom - Stakeholders
The concept of accountability seems inextricably linked with the view that accounting
should provide information to satisfy the information needs of users, i.e. stakeholders.
The user-needs model is now well established as a useful basis for a conceptual
framework for charity reporting (Connolly & Hyndman, 2004). Gray et al. (2006)
support this view by considering that the essence of accountability lies in the
relationships between charities and the stakeholder groups to whom charities are
accountable.
Stakeholders are an individual, or group of individuals, who are affected by an
organisation (Adams, 2004; Collier, 2008; Hung, 1998). England and Wales‟ Charity
Commission identifies three main types of stakeholders: donors; beneficiaries and the
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