Not-for-profit Accounting and Accountability Research Group

Overview

This group's overriding objective is to develop an accountability-based reporting framework for the Australian not-for-profit sector that will enhance accounting's contribution to operational vitality, performance measurement and transparent stakeholder communication.

In developing this framework we will capture the unique dynamics of not-for-profit performance by:

  • identifying financial and non-financial performance information to assist internal and external NFP stakeholders to assess and ensure organisations' operational vitality
  • proposing a model of integrated communication to address the needs of not-for-profits and their stakeholders.

The framework's practical relevance will be demonstrated through a series of organisational case studies, integral to the project.

Research team
QUT
Organisational unit
Lead unit QUT Business School
Research area
Governance, Accountability and Regulation
 

Publications and output

Ryan, Christine; Irvine, Helen (2012) Not-for-profit ratios for financial resilience and  internal accountability: a study of Australian international aid organisations. Australian Accounting Review, 22 (2), pp. 177-194
Not-for-profit (NFP) financial ratio research has focused primarily on organisational efficiency measurements for external stakeholders. Ratios that also capture information about stability, capacity (liquidity), gearing and sustainability, enable an assessment of financial resilience. They are thus valuable tools that  can provide a framework of internal accountability between boards and management. The establishment of an Australian NFP regulator highlights the importance of  NFP sustainability, and affirms the timeliness of this paper. We propose a suite of key financial ratios for use by NFP boards and management, and demonstrate its practical usefulness by applying the ratios to financial data from the 2009 reports of ACFID (Australian Council for International Development)-affiliated international aid organisations.
Ryan, Christine; Irvine, Helen (2012) Accountability Beyond the Headlines: Why Not-for-profit Organisations Need to Communicate Their Own Expenditure Stories. Australian Accounting Review, 22 (4), pp. 353-370
This paper analyses the expenditure patterns of 97 Australian international aid and development organisations, and examines the extent to which they disclose information about their expenditure in order to discharge their accountability. Not-for-profit (NFP) expenditure attracts media attention, with perceptions of excessive costs potentially damaging stakeholder trust in NFP organisations. This makes it important for organisations to be proactive in communicating their expenditure stories to stakeholders, rather than being judged on their performance by standardised expenditure metrics. By highlighting what it costs to ensure longer-term operational capability, NFP organisations will contribute to the discharge of their financial accountability and play a part in educating all stakeholders about the dangers of relying on a single metric.
Irvine, Helen (2011) From go to woe: how a not-for-profit managed to change to accrual accounting. Accounting, Auditing & Accountability Journal, 24(7), pp. 824-847
The paper examines the process of change in an Australian not-for-profit organization, from a cash-based to an accrual-based accounting system.  Its particular focus is the relationship between the image portrayed by accrual accounting adoption and the technical realities of the new system. Data was gathered from interviews, documents and meetings, and was contextualized and interpreted using institutional theory.
Irvine, Helen; Lazarevski, Katie; Dolnicar, Sara (2009) Strings  attached: new public management, competitive grant funding and social capital. Financial Accountability and Management, 25 (2), pp. 225-252
This paper first investigates the impact of new public management (NPM) practices, particularly  competitive grant funding, on Bushcare New South Wales (NSW), an Australian  environmental volunteering organisation.  Secondly, identifying such local volunteering organisations as repositories of valuable  social capital, it explores the link between volunteering and social capital.
Irvine, Helen; Lazarevski, Katie; Dolnicar, Sara (2008) Mission or money? Competitive  challenges facing public sector nonprofit organisations in an institutionalised  environment. International Journal of Nonprofit and Voluntary  Sector Marketing, 13 (2), pp. 107-117
This paper exposes the impact of competitive grant funding on public sector nonprofit volunteer organisations, using institutional theory to explain developments within this sector. A conceptual model is developed, from which five propositions are derived.
Lazarevski, Katie; Irvine, Helen; Dolnicar, Sara (2008) The effect of funding changes on public sector nonprofit organizations: the case of Bushcare NSW. Journal of Nonprofit and Public Sector Marketing, 20 (2), pp. 213-227
Research into nonprofit organizations abounds, but not much is known about public sector nonprofit organizations. Recent funding incentives in Australia have led to significant changes in the market environment for such organizations.
Hooks, Jill; Tooley, Stuart (2007) Exercising  professional judgement in an era of sector neutrality: A study of choices made by New Zealand reporting entities. Financial Reporting Regulation and Governance, 6 (1)
Since 1992, New Zealand has engaged in a sector-neutral approach to accounting standard setting – where a transaction  is accounted for based on its underlying economic nature rather than on the  type of entity undertaking it. Underpinned by the premise that GAAP can be  generalised across the public/private divide, we examine whether systematic differences exist between accounting policies adopted by reporting entities with different ownership and/or operating objectives. We find evidence of sector preference in the choice of useful life for comparable depreciable assets, and differences in policies for the amortisation of goodwill. We also find evidence of sector convergence in the choice of methods for accounting for valuation of  non-current assets, deferred taxation and inventory. It is observed that the two accounting policies indicating sector preference have a more direct impact on the Statement of Financial Performance than the other policies examined.
Irvine, Helen (2007) Corporate "creep": an institutional view of consultancies in a nonprofit organisation. Australian Accounting Review, 17(1), pp. 13-25
Professional consultants play a role in mobilising the “creep” of corporate practices from the for-profit sector, through the public sector and into the nonprofit sector. As well as legitimising these practices, consultancies illustrate the power of professional groups to institute change across sectors. In spite of this, the proliferation of consultancies is under-researched, particularly in the increasingly sophisticated nonprofit sector.
Irvine, Helen (2005) Balancing money and mission in a local church budget. Accounting, Auditing and Accountability Journal, 18(2), pp. 211-237
This study of budgeting practices and attitudes to budgeting in a local church uses Booth's (1993) framework to consider the potential conflict between the "sacred" agenda of the church and the "secular" nature of accounting.