The implications of new financial reporting standards on New Zealand charities

Jawed, Yasir and Attanayake, Lakshan (2018) The implications of new financial reporting standards on New Zealand charities. Applied Management Conference, Hamilton, New Zealand, July, 2018.

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Abstract or Summary

This research aims to analyse the impact of new reporting standards on NZ charities. The research specifically focuses on the implications of new reporting standards of charities in areas like transparency, convenience for practitioners and accounting costs under new reporting standards. The research covers transparency aspects by trying to find the difference in truthful and accurate representation of charities in their annual financial reports after the introduction of new standards, compared to when charities were self-regulated under Generally Accepted Accounting Principles. The research also covers the aspect of practitioners’ convenience, by investigating whether new reporting standards made accounting practices for charities easier and clearer, or more complicated. Lastly, research was conducted to ascertain the increase or decrease in accounting cost for charities to comply with new financial reporting standards. The study used qualitative methodology for research. The data was collected through semi-structured interviews to gain in-depth knowledge of the impact of new reporting standards on charities. There were four participants in total, accountants working for different charities. The duration of each interview was approximately 20 minutes, and were conducted at the charity organisation’s premises. The method of analysis used for the research was content analysis. The findings of the research suggest that the new reporting standards and statutory audit requirements have generally increased transparency within the charity sector in New Zealand. On the other hand, accounting costs have gone up for charities, especially Tier 2 and tier 3 charities. Charities that previously complied with IFRS have to face minimal effect on accounting cost. The convenience for practitioners has decreased since smaller charities are finding it difficult to comply with new reporting requirements and preparation of service performance reports which are now part of annual reporting. New financial reporting standards have provided a much-needed reporting structure, especially to Tier 3 and Tier 4 charities. Charities that complied with IFRS for their annual reporting found it easy to make the transition to the new reporting standards. In conclusion, the new reporting standards are a step in a right direction. However charities services need to hold regular workshops in every region for charities in order to provide more awareness about new reporting requirements to help charities through this transition phase. Small charities usually operate on a very limited budged, so templates and training for service performance reporting should be provided these are now a part of annual reports for Tier 3 and Tier 4 charities.

Item Type:Paper presented at a conference, workshop or other event, and published in the proceedings
Keywords that describe the item:business, not for profit, charities, financial reporting
Subjects:H Social Sciences > HF Commerce
Divisions:Schools > Centre for Business, Information Technology and Enterprise > School of Business and Adminstration
ID Code:6235
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Deposited On:26 Nov 2018 02:17
Last Modified:26 Nov 2018 02:17

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