Purposes, activities and beneficiaries: Assessing the use of accounting narratives as indicators of third sector performance
Qualitative Research in Accounting & Management
ISSN: 1176-6093
Article publication date: 18 November 2013
Abstract
Purpose
The purpose of this paper is to outline a method developed for analysis of narrative reporting by charities concerning the carrying out of their aims for public benefit (as required by charity law). It seeks to assess the effectiveness of the method as a means of measuring performance of third sector organisations (TSOs).
Design/methodology/approach
The method presented was used for qualitative reviewing and scoring of 1,400 sets of charity reports and accounts from England and Wales on 22 variables, with most variables involving an assessment of narratives on a five-point quality score. Various methods of standardising the scoring between different reviewers and different types of charities are considered.
Findings
The method was found to be largely effective in discriminating between charities which had a clear focus on the public benefit requirement and those which did not. However, other factors, such as lack of awareness of the requirements and levels of concern regarding charitable status, appear to have had a substantial impact on reporting practice.
Research limitations/implications
The limitations and uncertainties in converting a qualitative assessment of a narrative into a numerical score are discussed.
Practical implications
The method is likely to be of value for other studies of narrative reporting in financial statements, especially in relation to fulfilment by TSOs of the purposes for which they were established.
Originality/value
The paper contributes both to the understanding of narrative reporting by TSOs and to the development of methodological approaches for such analysis.
Keywords
Acknowledgements
The development of the fieldwork reported in this paper was supported by the Charity Commission for England and Wales. However, all opinions expressed on the findings are the author's own. The author acknowledges assistance from Neil Fletcher and three other colleagues and research associates in this work. He is also grateful for comments on the approach from delegates at the NCVO/VSSN Researching the Voluntary Sector Conference 2011, the Edinburgh Accounting and Risk Workshop 2011, the British Accounting Association Conference 2012, and the International Society for Third Sector Research Conference 2012. The paper has also benefited from the suggestions of QRAM referees.
Citation
G. Morgan, G. (2013), "Purposes, activities and beneficiaries: Assessing the use of accounting narratives as indicators of third sector performance", Qualitative Research in Accounting & Management, Vol. 10 No. 3/4, pp. 295-315. https://doi.org/10.1108/QRAM-04-2013-0016
Publisher
:Emerald Group Publishing Limited
Copyright © 2013, Emerald Group Publishing Limited