IDEAS home Printed from https://ideas.repec.org/a/taf/acctbr/v35y2005i2p111-128.html
   My bibliography  Save this article

Audit and control in the not-for-profit sector: an endowed charity case 1739–1853

Author

Listed:
  • Mae Baker
  • Michael Collins

Abstract

This paper reports on an investigation of an endowed charity, the Lady Elizabeth Hastings Trust, over the period 1739 to 1853. This period pre-dated the establishment of the permanent Board of Charity Commissioners, and was one in which the legal regulatory framework offered the trust's beneficiaries only limited redress against abuse by the managers of the trust. The safeguarding of the beneficiaries' interests depended heavily on the governance and control structures established by the trust's dead benefactress. Examination of the trust's Deed of Settlement, the accounting records and audit statements, show that from its inception this not-for-profit organisation employed a system of separation of powers, internal audit with documentary audit trail, and notably, an independent audit. The paper highlights the ‘progressive’ nature of the auditing mechanism adopted by this not-for- profit organisation, even when compared to the commercial sector of the period. Archival evidence is used to show that the governance system put in place by the foundress of the trust was successful in overcoming agency problems, in detecting abuse by the agents, and in ensuring the compliance of the agents with the wishes of the benefactress for more than a century after the benefactress's death in 1739. It is suggested that examination of the not-for-profit sector, so far largely ignored in the history of audit, can yield valuable insights into the development of auditins in the UK.

Suggested Citation

  • Mae Baker & Michael Collins, 2005. "Audit and control in the not-for-profit sector: an endowed charity case 1739–1853," Accounting and Business Research, Taylor & Francis Journals, vol. 35(2), pages 111-128.
    • Handle: RePEc:taf:acctbr:v:35:y:2005:i:2:p:111-128
    DOI: 10.1080/00014788.2005.9729668
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00014788.2005.9729668
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00014788.2005.9729668?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Matthews, Derek & Anderson, Malcolm & Edwards, John Richard, 1998. "The Priesthood of Industry: The Rise of the Professional Accountant in British Management," OUP Catalogue, Oxford University Press, number 9780198289609.
    2. Bryer, R. A., 2000. "The history of accounting and the transition to capitalism in England. Part one: theory," Accounting, Organizations and Society, Elsevier, vol. 25(2), pages 131-162, February.
    3. Jensen, Michael C. & Ruback, Richard S., 1983. "The market for corporate control : The scientific evidence," Journal of Financial Economics, Elsevier, vol. 11(1-4), pages 5-50, April.
    4. Watts, Ross L & Zimmerman, Jerold L, 1983. "Agency Problems, Auditing, and the Theory of the Firm: Some Evidence," Journal of Law and Economics, University of Chicago Press, vol. 26(3), pages 613-633, October.
    5. Miche 'Le Lacombe-Saboly, 1997. "Hospital accounts and accounting systems: a study in the French region of Toulouse from the seventeenth to the nineteenth century," Accounting History Review, Taylor & Francis Journals, vol. 7(3), pages 259-280.
    6. Fama, Eugene F, 1980. "Agency Problems and the Theory of the Firm," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 288-307, April.
    7. Amanda Berry, 1997. "'Balancing the books': funding provincial hospitals in eighteenth-century England," Accounting History Review, Taylor & Francis Journals, vol. 7(1), pages 1-30.
    8. Lamb, Margaret, 2001. "'Horrid appealing': accounting for taxable profits in mid-nineteenth century England," Accounting, Organizations and Society, Elsevier, vol. 26(3), pages 271-298, April.
    9. Bryer, R. A., 2000. "The history of accounting and the transition to capitalism in England. Part two: evidence," Accounting, Organizations and Society, Elsevier, vol. 25(4-5), pages 327-381, May.
    10. John Richard Edwards & Roy Chandler, 2001. "Contextualizing the Process of Accounting Regulation: A Study of Nineteenth‐Century British Friendly Societies," Abacus, Accounting Foundation, University of Sydney, vol. 37(2), pages 188-216, June.
    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. Weetman, Pauline, 2006. "Discovering the ‘international’ in accounting and finance," The British Accounting Review, Elsevier, vol. 38(4), pages 351-370.
    2. Neil Rollings, 2007. "British business history: A review of the periodical literature for 2005," Business History, Taylor & Francis Journals, vol. 49(3), pages 271-292.

    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. Napier, Christopher J., 2006. "Accounts of change: 30 years of historical accounting research," Accounting, Organizations and Society, Elsevier, vol. 31(4-5), pages 445-507.
    2. Ezzamel, Mahmoud & Willmott, Hugh & Worthington, Frank, 2008. "Manufacturing shareholder value: The role of accounting in organizational transformation," Accounting, Organizations and Society, Elsevier, vol. 33(2-3), pages 107-140.
    3. Walker, Stephen P., 2016. "Revisiting the roles of accounting in society," Accounting, Organizations and Society, Elsevier, vol. 49(C), pages 41-50.
    4. Toms, J. S., 2002. "The rise of modern accounting and the fall of the public company: the Lancashire cotton mills 1870-1914," Accounting, Organizations and Society, Elsevier, vol. 27(1-2), pages 61-84.
    5. Edwards, John Richard & Coombs, Hugh M. & Greener, Hugh T., 2002. "British central government and "the mercantile system of double entry" bookkeeping: a study of ideological conflict," Accounting, Organizations and Society, Elsevier, vol. 27(7), pages 637-658, October.
    6. Suzuki, Tomo, 2003. "The accounting figuration of business statistics as a foundation for the spread of economic ideas," Accounting, Organizations and Society, Elsevier, vol. 28(1), pages 65-95, January.
    7. Manhwa Wu & Paoyu Huang & Yensen Ni, 2020. "The Impact of Institutional Shareholdings on Price Limits," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 27(3), pages 343-361, September.
    8. Henrik Cronqvist & Fredrik Heyman & Mattias Nilsson & Helena Svaleryd & Jonas Vlachos, 2009. "Do Entrenched Managers Pay Their Workers More?," Journal of Finance, American Finance Association, vol. 64(1), pages 309-339, February.
    9. Agarwal, Vikas & Daniel, Naveen D. & Naik, Narayan Y., 2009. "Role of managerial incentives and discretion in hedge fund performance," CFR Working Papers 04-04, University of Cologne, Centre for Financial Research (CFR).
    10. A. J. ARNOLD & S. McCARTNEY, 2011. "‘Veritable gold mines before the arrival of railway competition’: but did dividends signal rates of return in the English canal industry?," Economic History Review, Economic History Society, vol. 64(1), pages 214-236, February.
    11. Bryer, R. A., 2005. "A Marxist accounting history of the British industrial revolution: a review of evidence and suggestions for research," Accounting, Organizations and Society, Elsevier, vol. 30(1), pages 25-65, January.
    12. Antonios Antoniou & Philippe Arbour & Huainan Zhao, 2008. "How Much Is Too Much: Are Merger Premiums Too High?," European Financial Management, European Financial Management Association, vol. 14(2), pages 268-287, March.
    13. Uddin, Shahzad, 2009. "Rationalities, domination and accounting control: A case study from a traditional society," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 20(6), pages 782-794.
    14. Malcolm Anderson, 2002. "Accounting History publications 2001," Accounting History Review, Taylor & Francis Journals, vol. 12(3), pages 505-512.
    15. Hingorani, Archana & Lehn, Kenneth & Makhija, Anil K., 1997. "Investor behavior in mass privatization: The case of the Czech voucher scheme," Journal of Financial Economics, Elsevier, vol. 44(3), pages 349-396, June.
    16. James S. Ang & Alan L. Tucker, 1988. "The Shareholder Wealth Effects Of Corporate Greenmail," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 11(4), pages 265-280, December.
    17. Premepeh, kwadwo Boateng & Odartei-Mills, Eugene, 2015. "Corporate governance structure and shareholder wealth maximisation," MPRA Paper 68087, University Library of Munich, Germany.
    18. Peter M Clarkson & Shams Pathan & Andrew Tellam, 2016. "Do private equity target firms exhibit less effectual governance structures?," Australian Journal of Management, Australian School of Business, vol. 41(2), pages 244-270, May.
    19. Michael John Jones, 2008. "Internal control, accountability and corporate governance," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 21(7), pages 1052-1075, September.
    20. Elisabeth Dedman, 2003. "Executive turnover in UK firms: the impact of Cadbury," Accounting and Business Research, Taylor & Francis Journals, vol. 33(1), pages 33-50.

    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:taf:acctbr:v:35:y:2005:i:2:p:111-128. 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RABR20 .

    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.