Document Type

Journal Article

Publication Details

This article was originally published as Irvine, HJ, Powerful friends: the institutionalisation of corporate accounting practices in an Australian religious/charitable organisation, Third Sector Review, 6(1/2), 2000, 5-26.

Abstract

The profile of accounting in the nonprofit sector has been raised substantially in recent years, due to profound changes in the institutional environment in which organizations in that sector operate. One of the factors that has resulted in the adoption of corporate-style financial management techniques, including accounting, in the nonprofit sector, has been the need for such organizations to achieve financial legitimacy. This can be achieved by means of their accounting practices, as they demonstrate a level of financial accountability that proves them to be legitimate recipients of funds from the public, from governments, and increasingly from the corporate sector. Although many nonprofit organizations are implementing more sophisticated accounting systems, little or no attention has been paid to the impact of those changes on individual organizations. Based on a year-long qualitative research study of an Australian religious organization with a large charitable services operation, this paper highlights the substantial impact the adoption of accrual accounting and corporate-style reporting had on its organizational culture, structures and practices. As the profile of accounting increases in similar organizations, and they face challenges in terms of organizational practices and mission imperatives, there will be a growing recognition that accounting technologies imported from the corporate sector may not be entirely appropriate for organizations whose agenda is something other than making a profit.

RIS ID

4443