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Financial Reporting Lags in the Non-profit Sector: An Empirical Analysis

  • Anne-Mie Reheul
  • Tom Van CaneghemEmail author
  • Sandra Verbruggen
Original Paper

Abstract

We examine financial reporting lags among a large sample of Belgian non-profit organizations (NPOs). Doing so, we add to the literature on financial reporting and accountability in the non-profit sector. Next to drivers of the financial reporting lag that have been identified in prior studies based on private firms (e.g., delaying the disclosure of bad news), we find that the way of funding the NPO (i.e., reliance upon donations and/or grants) and its specific area of activity are significantly related to the financial reporting lag. Our results also suggest that important changes in accounting regulation significantly delay the financial reporting process. Importantly, we note that 17.2 % of the sample organizations do not file their financial statements within the legal time span.

Keywords

Non-profit Financial reporting Reporting lag 

Résumé

Nous examinons les retards dans la publication des rapports financiers pour un large échantillon d’organisations à but non-lucratif belges. Ce faisant, nous contribuons à la littérature sur les rapports financiers et la responsabilité dans le secteur à but non-lucratif. Nous trouvons que, en plus des facteurs retardant la publication des rapports financiers qui ont été identifiés pour les compagnies du privé (par exemple pour chercher à retarder la révélation de mauvaises nouvelles), le mode de financement propre aux organisations à but non-lucratif (c’est-à-dire leur dépendance sur des donations et/ou des subventions) et leur domaine d’activité spécifique ont un impact significatif sur le retardement de la publication de leurs rapports financiers. Nos résultats suggèrent également que des changements importants dans la règlementation de la comptabilité retardent significativement le processus de rapport financier. Comme nous l’observons, il est important de noter que 17,2 % des organisations étudiées ne soumettent pas leurs comptes dans les délais légaux.

Zusammenfassung

Wir untersuchen anhand einer großen Stichprobe belgischer Nonprofit-Organisationen die Verzögerungen der Finanzberichterstattung und erweitern dadurch die Literatur zur Finanzberichterstattung und Rechenschaftspflicht im Nonprofit-Sektor. Neben den treibenden Gründen für eine verzögerte Finanzberichterstattung, die in vorherigen Studien von Privatunternehmen identifiziert wurden (z. B. eine verzögerte Bekanntgabe schlechter Nachrichten), stellen wir fest, dass eine enge Verbindung zwischen der Finanzierungsart der Nonprofit-Organisation (d. h. die Abhängigkeit von Spenden oder Subventionen) bzw. ihrem spezifischen Tätigkeitsbereich und einer verzögerten Finanzberichterstattung besteht. Unsere Ergebnisse weisen zudem darauf hin, dass wesentliche Änderungen der Rechungslegungsvorschriften das Finanzberichterstattungsverfahren erheblich verzögern. Ein weiterer wichtiger Faktor ist, dass 17,2 % der untersuchten Organisationen ihre Finanzberichte nicht innerhalb der gesetzlich vorgesehenen Frist einreichen.

Resumen

Examinamos los retrasos en la información financiera entre una amplia muestra de organizaciones belgas sin ánimo de lucro. Al hacerlo, contribuimos al material publicado sobre información financiera y responsabilidad en el sector de las organizaciones sin ánimo de lucro. Junto a los impulsores del retraso en la información financiera que han sido identificados en estudios previos basados en empresas privadas (p.ej.: el retraso en la divulgación de malas noticias), encontramos que la forma de financiar a la organización sin ánimo de lucro (es decir, la dependencia en las donaciones y/o subvenciones) y su área específica de actividad están relacionadas de manera significativa con el retraso en la información financiera. Nuestros resultados sugieren también que los cambios importantes en la reglamentación contable retrasan de manera significativa el proceso de información financiera. Lo que es más importante, observamos que el 17,2 % de la organizaciones de la muestra no presentan sus estados financieros dentro del lapso de tiempo legal.

摘要

我们对很多比利时非营利组织实例进行了财务报告滞后分析,同时还增加了有关财务报告和非营利领域责任的文献资料。根据前期基于私营公司的研究确定的导致财务报告滞后的因素(例如延期披露坏消息),我们发现资助非营利组织的方式(即依赖捐款和赠款)及其特定业务领域与财务报告滞后有很大的关系。我们的结果还表明,会计条例的重要变更在很大程度上延误了财务报告过程。重要的是,我们注意到,有17.2 %的组织实例未在合法的时间期限内提交其财务报表。

要約

最近数十年における汎ヨーロッパの市民社会団体の出現と発展は顕著であり、社会から取り残された集団の関心および関連する社会問題が提起されている。通常、国内および欧州レベルのネットワークで構成されているこれらの組織の一部は、EUの機関や市民社会における重要な対話者として成長している。また支持される正当性、広範な代表性を主張することでロビー活動が生じている。本論文では、EUをベースとする主要な市民社会団体5団体の比較研究を通じて、広範な地理的領域に位置する会員が存在する複数レベルでの運営において、これらの組織の会員と受益者がどのように内部の主張を明らかにするかを分析する。

ملخص

نحن نفحص تأخر التقارير المالية فيما بين عينة كبيرة من المنظمات الغير ربحية البلجيكية. إذا فعلنا ذلك فإننا نضيف إلى ما كتب حول التقارير المالية والمساءلة في القطاع الغير ربحي. ثم بعد ذلك الذين يوفرون الدافع لتأخر التقارير المالية التي تم تحديدهم في الدراسات السابقة المرتكزون في الشركات الخاصة (على سبيل المثال، تأخير الكشف عن الأخبار السيئة)، نجد أن طريقة تمويل المنظمة الغير هادفة للربح (على سبيل المثال الإعتماد على الهبات و/أو المنح) والمجال المحدد للنشاط يرتيط إلى حد كبيربتأخر التقارير المالية. نتائجنا تشير أيضا˝ إلى أن تغييرات مهمة في قواعد المحاسبة يؤخر تأخير كبير إجراء التقارير المالية. الأهم من ذلك، نلاحظ أن 17.2٪ من عينة المنظمات لا يرسل بياناته المالية ضمن الفترة الزمنية القانونية.

Notes

Acknowledgments

The authors would like to thank ICCI (Informatiecentrum voor het Bedrijfsrevisoraat) for funding part of the data collection process and Jan Dierick for research assistance. Moreover, the authors would like to thank participants of the IX Workshop on Empirical Research in Financial accounting (Gran Canaria) and two anonymous reviewers for their insightful comments on prior versions of this paper.

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Copyright information

© International Society for Third-Sector Research and The Johns Hopkins University 2012

Authors and Affiliations

  • Anne-Mie Reheul
    • 1
  • Tom Van Caneghem
    • 1
    Email author
  • Sandra Verbruggen
    • 1
  1. 1.HUBrusselBrusselsBelgium

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