Anglicare Australia commissioned the Independent Centre for Applied Not For Profit Research - with input from The Australian Accounting Standards Board and the Australian Charities and Not-for-profits Commission - to contribute to the discussion on financial reporting for the Australian Not-for-profit and Charitable Sector.
The report raises a number of very important questions about financial reporting, and identifies challenges to a simple, transparent and meaningful regime of reporting and informing on nonprofit financials.
"Overall, the purpose of Accounting Standards is to support the preparation and presentation of financial information which meets the needs of Users in an efficient and effective manner. Indeed, the AASB is focused on meeting Users’ needs in the context of the costs and benefits associated with financial reporting. It is the question as to whether the current Standards ensure financial reports meet the needs of Users that is central to this paper."
This is an important research document, and we encourage readers to review and contribute to the discussion.
"Financial Reporting is a critical element of the governance framework of any organisation. NFPs and Charities form an economically significant and socially critical part of the Australian community and so governance and accountability pertaining to this Sector is a matter of wide interest.
"Further, many NFPs also provide services and support to some of Australia’s most vulnerable people, making their sustainability and risk management key issues for those charged with oversight of the Sector.
"These organisations use Financial Reporting to:
- Be accountable to their stakeholders;
- Communicate their financial outcomes for a period;
- Demonstrate the organisation’s financial solvency, sustainability and capacity;
- Meet regulator and funder compliance requirements;
- In combination with an auditor’s / reviewer’s report, provide assurance to stakeholders; and
- In combination with other information, demonstrate efficiency and effectiveness.
Download a copy of the report from Anglicare Australia . (http://www.anglicare.asn.au/)
Contemporaneously, the Australian Accounting Standards Board (AASB) has released a report that finds Australia’s adoption of the International Financial Reporting Standards (IFRS) has been relatively smooth for most Australian business entities.
Extra support however, is warranted, the AASB report says, for not-for-profit (NFP) entities, (such as public sector entities and charities and incorporated associations) to meet user needs and to reduce costs associated with preparing financial information.
The AASB Media Release and full report can be viewed here.