The Value of Financial and Non-Financial Information  towards Non-profit Organisations

Hasnatulsyakhira Abdullah Hadi; Ahmad Naqiyuddin Bakar; Nurul Hidayana Mohd Noor; Afief El Ashfahany

doi:10.21834/ebpj.v7i21.3693

Authors

Hasnatulsyakhira Abdullah Hadi Faculty of Administrative Science and Policy Studies, Universiti Teknologi MARA, Shah Alam, Malaysia
Ahmad Naqiyuddin Bakar Faculty of Administrative Science and Policy Studies, Universiti Teknologi MARA, Shah Alam, Malaysia
Nurul Hidayana Mohd Noor Faculty of Administrative Science and Policy Studies, Universiti Teknologi MARA, Shah Alam, Malaysia
Afief El Ashfahany Islamic Economics and Law Departement, Universitas Muhammadiyah Surakarta, Indonesia

DOI:

https://doi.org/10.21834/ebpj.v7i21.3693

Keywords:

Information Disclosure, Financial Information, Non-financial Information, Nonprofit Organization

Abstract

The role of nonprofit organizations has been acknowledged. They are the providers of services that the government cannot handle alone. Accountability is an obligation to conduct and account for the company's performance. Information disclosure is one of the mechanisms used to be accountable to their stakeholders, which are financial and non-financial information. This study explored the importance of financial and non-financial information in NPOs and the Internet as the medium for disclosing information to stakeholders. This study applied a qualitative research design using content analysis. This research found that both types of information are crucial to NPOs.

References

AbouAssi, K., & Bies, A. (2018). Relationships and resources: the isomorphism of nonprofit organizations’ (NPO) self-regulation. Public Management Review, 20(11), 1581-1601.

Agyemang, G., O’Dwyer, B., Unerman, J., & Awumbila, M. (2017). Seeking "conversations for accountability": Mediating the impact of upward accountability processes of non-governmental organizations (NGO). Accounting, Auditing and Accountability Journal, 30(5), 982-1007.

Atan, R., Zainon, S., & Wah, Y. B. (2012). The extent of charitable organizations' disclosures of information and its relationship with donations. Management & Accounting Review (MAR), 11(2), 15-38.

Banding, M. P., & Mayangsari, S. (2017). The Impact of Financial and Non-Financial Information Disclosure to Donation Decision in NonProfit Organization by Individual Donor (A True-Experiment Research). Research Journal of Finance and Accounting, 8(16), 9–19.

Blankenburg, K. (2018). Theoretical Framework for Intellectual Capital Reporting of NPOs. In Intellectual Capital in German Non-profit Organisations (pp. 79-97). Springer, Cham.

Boomsma, R., & O'dwyer, B. (2014). The nature of NGO Accountability: conceptions, motives, forms, and mechanisms. In Sustainability accounting and accountability (pp. 175-193). Routledge.

Breen, O. B. (2013). The disclosure panacea: A comparative perspective on charity financial reporting. Voluntas: International Journal of Voluntary and Nonprofit Organizations, 24(3), 852-880.

Caneghem, A. R. T. Van, & Verbruggen, S. (2014). Financial Reporting Lags in the Nonprofit Sector : An Empirical Analysis. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 25, 352–377. https://doi.org/10.1007/s11266-012-9344-3

Carvalho, A. O., Ferreira, M. R., & Silva, P. A. (2019). Partners in a caring society-a nonprofit organization case study. Economics & Sociology, 12(2), 129-146.

Carvalho, A., Ferreira, M. R., & Lima, S. (2020). Web disclosure of institutional information in nonprofit organizations: an approach in Portuguese charities. International Review on Public and Nonprofit Marketing, 17(1), 41–58. https://doi.org/10.1007/s12208-019-00235-1

Cheng, Y., & Wu, Z. (2021). The contingent value of political connections on donations to Chinese foundations: Exploring the moderating role of transparency. Administration & Society, 53(1), 36-63.

Cooley, A. (2020). Comparative analysis of online accountability practices in three sectors: private, public and nonprofit. Accounting, Auditing & Accountability Journal.

Crawford, L., Morgan, G. G., & Cordery, C. J. (2018). Accountability and not‐for‐profit organisations: Implications for developing international financial reporting standards. Financial accountability & management, 34(2), 181-205.

Dyczkowski, T. (2017). Strategies toward Internet disclosures in public benefit organisations. Prace Naukowe Uniwersytetu Ekonomicznego We Wrocławiu, (474).

Ebrahim, A. (2003). Accountability in practice: Mechanisms for NGOs. World Development, 31(5), 813–829.

Gálvez Rodríguez, M. del M., Caba Pérez, M. del C., & Godoy, M. L. (2012). Determining Factors in Online Transparency of NGOs: A Spanish Case Study. Voluntas, 23(3), 661–683.

Hasan, B., & Nabiha, A. K. S. (2016). Accounting System and Accountability Practices in an Islamic Setting: A Grounded Theory Perspective. Social Science & Humanities, 24, 59–78.

Hashim, M. H., Nawawi, A., & Salin, A. S. A. P. (2014). Determinants of strategic information disclosure-Malaysian evidence. International Journal of Business and Society, 15(3), 547–572.

Khadra, H. A., & Delen, D. (2020). Nonprofit organization fraud reporting: does governance matter?. International Journal of Accounting & Information Management.

Kim, H. H., & Han, E. (2020). The application of the theory of planned behavior to identify determinants of donation intention: Towards the comparative examination of positive and negative reputations of nonprofit organizations CEO. Sustainability, 12(21), 9134.

Lee, R. L., & Blouin, M. C. (2019). Factors affecting web disclosure adoption in the nonprofit sector. Journal of Computer Information Systems, 59(4), 363-372.

Masruki, R., Hussainey, K., & Aly, D. (2020). Factors Influencing Information Disclosure by Malaysian State Islamic Religious Councils: Evidence from Interviews. Journal of Modern Accounting and Auditing, 16(8), 349-359.

Mosca, C., & Picciau, C. (2020). Making Non-Financial Information Count: Accountability and Materiality in Sustainability Reporting. Finance Durable et Droit: Perspectives Comparées (Hugues Bouthinon-Dumas, Bénédicte François & Anne-Catherine Muller eds., 2020, Forthcoming), Bocconi Legal Studies Research Paper, (3536460).

Ortega-Rodríguez, C., Licerán-Gutiérrez, A., & Moreno-Albarracín, A. L. (2020). Transparency as a key element in accountability in non profit organizations: A systematic literature review. Sustainability, 12(14), 5834.

Osman, A. Z., & Agyemang, G. (2020). Privileging downward accountability in Waqf management. Journal of Islamic Accounting and Business Research.

Perai, N. A. A. (2019). Mapping the Malaysian Third Sector: Using Organisational Data to Obtain an Improved Account of its Scope and Size. (Dissertation, University of Stirling).

Pizzi, S., Del Baldo, M., Caputo, F., & Venturelli, A. (2022). Voluntary disclosure of Sustainable Development Goals in mandatory non-financial reports: The moderating role of cultural dimension. Journal of International Financial Management & Accounting, 33(1), 83-106.

Rossi, G., Leardini, C., & Landi, S. (2020). The more you know, the more you give: Influence of online disclosure on European community foundations' donations. Nonprofit management and leadership, 31(1), 81-101.

Roslan, N., Arshad, R., & Pauzi, N. F. M. (2017). Accountability and governance reporting by non-profit organizations. In SHS Web of Conferences (Vol. 36, p. 00041). EDP Sciences.

Salamon, L. M., & Sokolowski, S. W. (2016). Beyond nonprofits: Re-conceptualizing the third sector. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 27(4), 1515-1545.

Sanzo-Pérez, M. J., Rey-García, M., & Álvarez-González, L. I. (2022). Downward accountability to beneficiaries in social enterprises: do partnerships with nonprofits boost it without undermining accountability to other stakeholders?. Review of Managerial Science, 16(5), 1533-1560.

Saraite-Sariene, L., Alonso-Cañadas, J., Galán-Valdivieso, F., & Caba-Pérez, C. (2020). Non-financial information versus financial as a key to the stakeholder engagement: A higher education perspective. Sustainability (Switzerland), 12(1). https://doi.org/10.3390/su12010331

Saxton, G. D., Kuo, J. S., & Ho, Y. C. (2012). The determinants of voluntary financial disclosure by nonprofit organizations. Nonprofit and voluntary sector quarterly, 41(6), 1051-1071.

Saxton, Neely, D., & Guo, C. (2014). Web disclosure and the market for charitable contributions. Journal of Accounting and Public Policy, 33(2), 127–144.

Skoczylas-Tworek, A. (2020). Disclosure of non-financial information in the field of counteracting corruption and bribery in economic practice. Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu, 64(4), 187-198.

Treinta, F. T., Moura, L. F., Almeida Prado Cestari, J. M., Pinheiro de Lima, E., Deschamps, F., Gouvea da Costa, S. E. & Leite, L. R. (2020). Design and implementation factors for performance measurement in non-profit organizations: A literature review. Frontiers in Psychology, 11, 1799.

Vodopyanova, N. (2020). Reaching Constituencies: Online Media Use among Rural Nonprofit Organizations (Doctoral dissertation, Indiana University of Pennsylvania).

Zainon, S., Atan, R., & Wah, Y. B. (2014). An empirical study on the determinants of information disclosure of Malaysian non-profit organizations. Asian Review of Accounting.

Zainon, S, Hashim, M., Yahaya, N., & Atan, R. (2013). Annual Reports of Nonprofit Organizations (NPOs): An Analysis. Journal of Modern Accounting and Auditing, 9(2), 183–192.

Zainon, Saunah (2014) Assessing stakeholders' needs for information from charity organizations / Saunah Zainon. In: The Doctoral Research Abstracts. IPSis Biannual Publication, 6 (6). Institute of Graduate Studies, UiTM, Shah Alam.