The transparency of Chinese affiliated international charities: a comparative analysis
The objective of the research project is to use comparative analysis to investigate the accounting transparency difference in terms of financial statements from international charities with affiliated organizations both in New Zealand and China.
The qualitative research methodology and a content analysis method were adopted to investigate the charities’ annual reports which provide information for donors’ decision making. Four charities which provide information common to China and New Zealand were analysed: International Committee of The Red Cross (ICRC), World Wide Fund For Nature (WWF), United Nations International Children’s Emergency Fund (UNICEF) and World Vision International. The research focussed on the annual reports for 2010, as publicly disclosed on the charities’ websites.
The most important finding of the study is that Chinese charity websites disclose little financial information. There seems to be less need in China for charities to be transparent to donors. Compared with charities in China, charities in New Zealand are more accountable. Although accounting transparency in New Zealand charities is much better than those in China, there is still some room for improvement.
The lack of accounting transparency in charity sectors needs to be addressed by accounting professions and the public because it may lead to potential agency problems. The findings indicate that accounting transparency is one of the problems in charities in China and also suggest that charities in New Zealand need to improve their accounting transparency further.