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Journal of Business Ethics
Erschienen in: Journal of Business Ethics 1/2014

01.06.2014

Communicated Accountability by Faith-Based Charity Organisations

verfasst von: Sofia Yasmin, Roszaini Haniffa, Mohammad Hudaib

Erschienen in: Journal of Business Ethics | Ausgabe 1/2014

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Abstract

The issue of communicated accountability is particularly important in Faith-Based Charity Organisations as the donated funds and use of those funds are often meant to fulfil religious obligations for the well-being of society. Integrating Stewart’s (1984) ladder of accountability with the Statement of Recommended Practice guidance for charities, this paper examines communicated accountability practices of Muslim and Christian Charity Organisations in England and Wales. Our content analysis results indicate communicated accountability to be generally limited, focusing on providing basic descriptive information rather than judgement-based information. Our interviews with trustees and preparers of Trustee Annual Reports in Muslim Charity Organisations identified the reasons being due to high donor trust and consequently weak demand by stakeholders for the latter type of information, as well as internal organisational issues related to the organisational structure and culture, lack of internal professional expertise and high accountability cost.
Vorheriger Artikel Maybe It’s Right, Maybe It’s Wrong: Structural and Social Determinants of Deception in Negotiation
Nächster Artikel Multinational Enterprise Subsidiaries and their CSR: A Conceptual Framework of the Management of CSR in Smaller Emerging Economies

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1
These scandals include the collapse of two major charity organisations, Breast Cancer Relief and Moonbeams in 2003 (BBC 2003). More recently, concerns have been raised over financial irregularities within Awema, a race relations charity (BBC 2012).
 
2
For example, in December 2011, a Christian pastor was found guilty of swindling £2.6 million from the public through a charity which was used to directly fund his lavish lifestyle (Camber and Evans 2011). More recently, a treasurer for two Christian charities was jailed for 5 years for embezzling £500,000 through an elaborate scheme involving gift aid (Robbins 2012).
 
3
It is important to make the distinction between FBCOs and religious organisations as not all of the former can be considered as religious organisations and vice versa. This distinction depends on their willingness to be registered with the Charity Commission.
 
4
The Office of the Scottish Charity Regulator [OSCR] is responsible for the monitoring of charities in Scotland and the Charity Commission for Northern Ireland monitors charities in that region. Each body has slightly different rules which it requires registered charities to follow.
 
5
Guidestar is an independent charity set up in 2003 to enable charities to disseminate accountability information via the internet.
 
6
A request was made to the Charity Commission of England and Wales for a list of information they hold on Muslim and Christian religious charities such as the name of the charity organisations, their objectives, their income, and their registration date. The list was correct as at November 2009. Since the number of Muslim charities is much lower than Christian charities, a sample from the former population was drawn first and then matched with Christian charities.
 
7
Under the England and Wales regulations, all charities that have an income above £25,000 must submit their annual reports to the Charity Commission for publication online. However, only charities with an income over £100,000 are required to produce SORP compliant reports. Connolly and Hyndman (2000) found there to be a lagged effect on the implementation of regulation in the case of previous SORPs, therefore TARs for the year ending 2008 were chosen for investigation (i.e., 3 years following the implementation of SORP 2005).
 
8
Size of the charity was captured using the income of the charity as proxy; £100,000–£499,999 (small), £500,000–£1 m (medium) and £1 m + (large) (Crawford et al. 2009).
 
9
The SORP (2005) goes someway in ensuring that charities provide information which fulfils the criteria of consistency and comparability, as all charities need to follow the same framework each year when preparing the annual reports and accounts. By assessing the relevance, reliability, and timeliness of TARs, this study attempts to analyse the quality of accounting information being provided by faith-based charities as required by the Charity Commission.
 
10
The Charities Act (2006) requires an audit if the income of the charity is £500,000 or above, an independent examination by a qualified examiner if the income is between £250,000 and £500,000, and an independent examination but not necessarily by a qualified examiner, for income less than £250,000.
 
11
Not all charities could be evaluated on this aspect as some charities (the majority of which are small MCOs) did not submit a complete TAR and only submitted the legal information required by the SORP. Hence, these charities were discounted when analysing the relevance of the reports (see column 1C of Table 3).
 
12
The findings are not presented in the table.
 
13
Items are either (M) mandatory or (R) recommended by SORP (2005).
 
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Metadaten
Titel
Communicated Accountability by Faith-Based Charity Organisations
verfasst von
Sofia Yasmin
Roszaini Haniffa
Mohammad Hudaib
Publikationsdatum
01.06.2014
Verlag
Springer Netherlands
Erschienen in
Journal of Business Ethics / Ausgabe 1/2014
Print ISSN: 0167-4544
Elektronische ISSN: 1573-0697
DOI
https://doi.org/10.1007/s10551-013-1759-2

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