Is Accounting Information from Nonprofit Organizations Useful to Donors? A Review of Charitable Giving and Value-Relevance  

Oleh:

Parsons, Linda M.

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: Journal of Accounting Literature vol. 2003 no. 22 (2003), page 104-129.
Topik: Public Sector Accounting; PSA; Not-For-Profit (NFP) Organizations
Fulltext: JAL 03 22 104.pdf (1.67MB)

Isi artikel

Many factors other than an organization's financial information influence a potential donor's decision to give. Motivations to give to a particular organization include preference for the cause to which the entity is dedicated, discretionary income, religious affiliation and personal belief in altruism [Gordon and Khumawala, 1999a]. However, the purpose of this paper is to focus solely on the research that examines the value relevance of accounting information in the decision to make a charitable donation and to determine which aspects of the role of accounting reports in charitable giving remain unexplored. Statement of Financial Concepts (SFAC) No. 2 states that to be relevant, "accounting information must be capable of making a difference in a decision by helping users..." [FASB 1980a, 1 47]. Beaver [2002, p. 459] asserts that value relevance research in the capital markets area "examines the association between a security price-based dependent variable and a set of accounting variables." The users in Beaver's example are investors and the decision is the valuation of the company (through its stock price). Capital markets research provides evidence that accounting information is associated with security price (the decision outcome). The paper is organized as follows. The next section summarizes the current accounting practices of NFP entities. Section three presents a discussion of how research addressing accounting issues in the third sector is evolving. That section summarizes the debate about the proper accounting framework for third sector entities and empirical research on NFP performance measures. The fourth section suggests areas for future research and the last section presents the conclusions.

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