Factors Influencing Narrative Disclosure by Large UK Charities: Interview Evidence
22 Pages Posted: 12 Dec 2008
Date Written: November 27, 2008
It is widely recognised that we currently have very little knowledge of what is reported outside the financial statements by UK charities and even less understanding of why it is reported. This represents a crucial gap in our knowledge, since accounting narratives have become a major element in the reporting model, in both business and the charity sector. The publication of the most recent Charity SORP (2005) promotes the importance of narratives within the Trustees' Annual Report. This paper, therefore, presents a timely investigation of the narrative disclosure practices and its drivers by UK charities through a set of interviews with the finance directors of a small sample of large fund-raising and grant-making charities. The paper provides a preliminary analysis of a set of interviews with the finance directors of these charities, which investigate the drivers of such disclosure. Findings suggest that, although their annual report and annual reviews are channels of communicating information to all types of stakeholders, the charities appear to view the individual documents as having different disclosure purposes, e.g. in terms of their target audience and the motivations for such reports. A range of incentives and constraints that affect their decision to disclose (not disclose) specific information within their reports is identified - these factors relate, inter alia, to confidentiality, accountability, regulatory, transparency and marketability. It is expected that the full results of this study will help us understand the barriers to improving the transparency and accountability of charity reporting, thus supporting evidence-based policy-making (Buijink, 2006).
Keywords: Charity reporting, Disclosure, Grounded theory
JEL Classification: M40
Suggested Citation: Suggested Citation