IDEAS home Printed from https://ideas.repec.org/a/bla/acctfi/v62y2022is1p1851-1886.html
   My bibliography  Save this article

The effect of members on charities’ annual reporting: evidence from companies limited by guarantee in Australia

Author

Listed:
  • Elka Johansson
  • Peter Carey
  • George Tanewski
  • Iliyas Yusoff

Abstract

In contrast to membership organisations that serve the interest of members, members of charities operating as companies limited by guarantee are responsible by law for ensuring the charity serves its broader charitable purpose. This study examines how members of these large charitable companies discharge accountability through annual report disclosure. We analyse data on 630 company‐year observations for a sample of 153 Australian charitable companies limited by guarantee that lodged annual reports with regulators. Results show that members encourage the disclosure of financial and non‐financial information in the annual report and this in turn influences charities’ future donations and grants revenue.

Suggested Citation

  • Elka Johansson & Peter Carey & George Tanewski & Iliyas Yusoff, 2022. "The effect of members on charities’ annual reporting: evidence from companies limited by guarantee in Australia," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(S1), pages 1851-1886, April.
    • Handle: RePEc:bla:acctfi:v:62:y:2022:i:s1:p:1851-1886
    DOI: 10.1111/acfi.12842
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/acfi.12842
    Download Restriction: no
    File URL: https://libkey.io/10.1111/acfi.12842?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Stephen Brammer & Stephen Pavelin, 2006. "Voluntary Environmental Disclosures by Large UK Companies," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 33(7‐8), pages 1168-1188, September.
    2. Roberts, John, 1991. "The possibilities of accountability," Accounting, Organizations and Society, Elsevier, vol. 16(4), pages 355-368.
    3. S. Zainon & R. Atan & Y. Bee Wah, 2014. "An empirical study on the determinants of information disclosure of Malaysian non-profit organizations," Asian Review of Accounting, Emerald Group Publishing Limited, vol. 22(1), pages 35-55, April.
    4. Henderson, Elisa & Lambert, Vicky, 2018. "Negotiating for survival: Balancing mission and money," The British Accounting Review, Elsevier, vol. 50(2), pages 185-198.
    5. Hainmueller, Jens, 2012. "Entropy Balancing for Causal Effects: A Multivariate Reweighting Method to Produce Balanced Samples in Observational Studies," Political Analysis, Cambridge University Press, vol. 20(1), pages 25-46, January.
    6. Brian C. Fitzgerald & Thomas C. Omer & Anne M. Thompson, 2018. "Audit Partner Tenure and Internal Control Reporting Quality: U.S. Evidence from the Not‐For‐Profit Sector," Contemporary Accounting Research, John Wiley & Sons, vol. 35(1), pages 334-364, March.
    7. Gordon, Teresa P. & Knock, Cathryn L. & Neely, Daniel G., 2009. "The role of rating agencies in the market for charitable contributions: An empirical test," Journal of Accounting and Public Policy, Elsevier, vol. 28(6), pages 469-484, November.
    8. Hyndman, Noel & McConville, Danielle, 2018. "Trust and accountability in UK charities: Exploring the virtuous circle," The British Accounting Review, Elsevier, vol. 50(2), pages 227-237.
    9. Annalisa Prencipe, 2004. "Proprietary costs and determinants of voluntary segment disclosure: evidence from Italian listed companies," European Accounting Review, Taylor & Francis Journals, vol. 13(2), pages 319-340.
    10. David J. Gilchrist & Roger Simnett, 2019. "Research horizons for public and private not‐for‐profit sector reporting: moving the bar in the right direction," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 59(1), pages 59-85, March.
    11. Alpa Dhanani & Ciaran Connolly, 2012. "Discharging not‐for‐profit accountability: UK charities and public discourse," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 25(7), pages 1140-1169, September.
    12. Larcker, David F. & Rusticus, Tjomme O., 2010. "On the use of instrumental variables in accounting research," Journal of Accounting and Economics, Elsevier, vol. 49(3), pages 186-205, April.
    13. Connolly, Ciaran & Hyndman, Noel & McConville, Danielle, 2013. "UK charity accounting: An exercise in widening stakeholder engagement," The British Accounting Review, Elsevier, vol. 45(1), pages 58-69.
    14. Qiu Chen, 2016. "Director Monitoring of Expense Misreporting in Nonprofit Organizations: The Effects of Expense Disclosure Transparency, Donor Evaluation Focus and Organization Performance," Contemporary Accounting Research, John Wiley & Sons, vol. 33(4), pages 1601-1624, December.
    15. Cherrie Yang & Deryl Northcott, 2019. "How can the public trust charities? The role of performance accountability reporting," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 59(3), pages 1681-1707, September.
    16. Michelle H. Yetman & Robert J. Yetman, 2012. "The Effects of Governance on the Accuracy of Charitable Expenses Reported by Nonprofit Organizations," Contemporary Accounting Research, John Wiley & Sons, vol. 29(3), pages 738-767, September.
    17. Okten, Cagla & Weisbrod, Burton A., 2000. "Determinants of donations in private nonprofit markets," Journal of Public Economics, Elsevier, vol. 75(2), pages 255-272, February.
    18. Carmelo Reverte, 2009. "Determinants of Corporate Social Responsibility Disclosure Ratings by Spanish Listed Firms," Journal of Business Ethics, Springer, vol. 88(2), pages 351-366, August.
    19. Kitching, Karen, 2009. "Audit value and charitable organizations," Journal of Accounting and Public Policy, Elsevier, vol. 28(6), pages 510-524, November.
    20. Buchheit, Steve & Parsons, Linda M., 2006. "An experimental investigation of accounting information's influence on the individual giving process," Journal of Accounting and Public Policy, Elsevier, vol. 25(6), pages 666-686.
    21. Philip D. Palmer, 2013. "Exploring attitudes to financial reporting in the Australian not-for-profit sector," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 53(1), pages 217-241, March.
    22. Chau, Gerald K. & Gray, Sidney J., 2002. "Ownership structure and corporate voluntary disclosure in Hong Kong and Singapore," The International Journal of Accounting, Elsevier, vol. 37(2), pages 247-265.
    23. Carolyn J. Cordery & Dalice Sim & Tony Zijl & Gary Monroe, 2017. "Differentiated regulation: the case of charities," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 57(1), pages 131-164, March.
    24. Denis Cormier & Michel Magnan & Barbara Van Velthoven, 2005. "Environmental disclosure quality in large German companies: Economic incentives, public pressures or institutional conditions?," European Accounting Review, Taylor & Francis Journals, vol. 14(1), pages 3-39.
    25. Stephen Brammer & Stephen Pavelin, 2006. "Voluntary Environmental Disclosures by Large UK Companies," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 33(7-8), pages 1168-1188.
    26. Yang, Cherrie & Northcott, Deryl, 2018. "Unveiling the role of identity accountability in shaping charity outcome measurement practices," The British Accounting Review, Elsevier, vol. 50(2), pages 214-226.
    27. Hofmann, Mary Ann & McSwain, Dwayne, 2013. "Financial disclosure management in the nonprofit sector: A framework for past and future research," Journal of Accounting Literature, Elsevier, vol. 32(1), pages 61-87.
    28. Jing Li & Richard Pike & Roszaini Haniffa, 2008. "Intellectual capital disclosure and corporate governance structure in UK firms," Accounting and Business Research, Taylor & Francis Journals, vol. 38(2), pages 137-159.
    29. Xinshu Zhao & John G. Lynch & Qimei Chen, 2010. "Reconsidering Baron and Kenny: Myths and Truths about Mediation Analysis," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 37(2), pages 197-206, August.
    30. Leuz, Christian, 2006. "Cross listing, bonding and firms' reporting incentives: A discussion of Lang, Raedy and Wilson (2006)," Journal of Accounting and Economics, Elsevier, vol. 42(1-2), pages 285-299, October.
    31. Erica E. Harris & Daniel G. Neely, 2016. "Multiple Information Signals in the Market for Charitable Donations," Contemporary Accounting Research, John Wiley & Sons, vol. 33(3), pages 989-1012, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stasi, Federer & Pierro, Roberto & Shaturaev, Jakhongir, 2024. "The Financial Implications of Mandating Non-Financial Assurance," MPRA Paper 121883, University Library of Munich, Germany, revised 14 Jun 2024.
    2. David J. Gilchrist & Andrew West & Yuyu Zhang, 2023. "Barriers to the Usefulness of Non‐profit Financial Statements: Perspectives From Key Internal Stakeholders," Australian Accounting Review, CPA Australia, vol. 33(2), pages 188-202, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dominic Cyr & Suzanne Landry & Anne Fortin, 2023. "Financial Disclosure Management by Charitable Organisations: A Conceptual and Operational Framework," Australian Accounting Review, CPA Australia, vol. 33(1), pages 46-65, March.
    2. Dominic Cyr & Suzanne Landry & Anne Fortin, 2022. "Management of Charitable Program Expense Ratios in the Charity Sector," Australian Accounting Review, CPA Australia, vol. 32(1), pages 106-123, March.
    3. Hichem Khlif & Kamran Ahmed & Mohsen Souissi, 2017. "Ownership structure and voluntary disclosure: A synthesis of empirical studies," Australian Journal of Management, Australian School of Business, vol. 42(3), pages 376-403, August.
    4. Abdalla Shwairef & Azlan Amran & Mohammad Iranmanesh & Noor Hazlina Ahmad, 2021. "The mediating effect of strategic posture on corporate governance and environmental reporting," Review of Managerial Science, Springer, vol. 15(2), pages 349-378, February.
    5. Emerald Edem Welbeck & Godfred Matthew Yaw Owusu & Rita Amoah Bekoe & John Amoah Kusi, 2017. "Determinants of environmental disclosures of listed firms in Ghana," International Journal of Corporate Social Responsibility, Springer, vol. 2(1), pages 1-12, December.
    6. María Consuelo Pucheta‐Martínez & Isabel Gallego‐Álvarez, 2018. "Environmental reporting policy and corporate structures: An international analysis," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 25(5), pages 788-798, September.
    7. José Miguel Tirado-Beltrán & Iluminada Fuertes-Fuertes & J. David Cabedo, 2020. "Donor Reaction to Non-Financial Information Covering Social Projects in Nonprofits: A Spanish Case," Sustainability, MDPI, vol. 12(23), pages 1-17, December.
    8. X. Meng & S. Zeng & C. Tam, 2013. "From Voluntarism to Regulation: A Study on Ownership, Economic Performance and Corporate Environmental Information Disclosure in China," Journal of Business Ethics, Springer, vol. 116(1), pages 217-232, August.
    9. Cristina Ortega-Rodríguez & Ana Licerán-Gutiérrez & Antonio Luis Moreno-Albarracín, 2020. "Transparency as a Key Element in Accountability in Non-Profit Organizations: A Systematic Literature Review," Sustainability, MDPI, vol. 12(14), pages 1-22, July.
    10. Carolyn J. Cordery & Dalice Sim & Tony Zijl & Gary Monroe, 2017. "Differentiated regulation: the case of charities," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 57(1), pages 131-164, March.
    11. Raphael Duguay, 2022. "The Economic Consequences of Financial Audit Regulation in the Charitable Sector," Journal of Accounting Research, Wiley Blackwell, vol. 60(4), pages 1463-1498, September.
    12. Chenxi Wang & Xincai Deng & Susana Álvarez-Otero & Muhammad Safdar Sial & Ubaldo Comite & Jacob Cherian & Judit Oláh, 2021. "Impact of Women and Independent Directors on Corporate Social Responsibility and Financial Performance: Empirical Evidence from an Emerging Economy," Sustainability, MDPI, vol. 13(11), pages 1-16, May.
    13. Khaleed Omair Alotaibi & Khaled Hussainey, 2016. "Determinants of CSR disclosure quantity and quality: Evidence from non-financial listed firms in Saudi Arabia," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 13(4), pages 364-393, November.
    14. Fatemi, Ali & Glaum, Martin & Kaiser, Stefanie, 2018. "ESG performance and firm value: The moderating role of disclosure," Global Finance Journal, Elsevier, vol. 38(C), pages 45-64.
    15. Ellie Norris & Shawgat Kutubi & Steven Greenland, 2023. "Cultural accountability in the annual report: The case of First Nations entities in Australia," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(4), pages 4453-4478, December.
    16. Gregory D. Saxton & Daniel G. Neely, 2019. "The Relationship Between Sarbanes–Oxley Policies and Donor Advisories in Nonprofit Organizations," Journal of Business Ethics, Springer, vol. 158(2), pages 333-351, August.
    17. Alicia Girón & Amirreza Kazemikhasragh & Antonella Francesca Cicchiello & Eva Panetti, 2021. "Sustainability Reporting and Firms’ Economic Performance: Evidence from Asia and Africa," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 12(4), pages 1741-1759, December.
    18. Hofmann, Mary Ann & McSwain, Dwayne, 2013. "Financial disclosure management in the nonprofit sector: A framework for past and future research," Journal of Accounting Literature, Elsevier, vol. 32(1), pages 61-87.
    19. David J. Gilchrist & Roger Simnett, 2019. "Research horizons for public and private not‐for‐profit sector reporting: moving the bar in the right direction," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 59(1), pages 59-85, March.
    20. María Luisa Pajuelo Moreno & Teresa Duarte-Atoche, 2019. "Relationship between Sustainable Disclosure and Performance—An Extension of Ullmann’s Model," Sustainability, MDPI, vol. 11(16), pages 1-33, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:acctfi:v:62:y:2022:i:s1:p:1851-1886. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/aaanzea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.