| Summary: | The accounts of non-profit organisations (NPO's) have been the subject of increasing amounts of research and pronouncements by otficial bodies in rec,ent years. Much of the research to date has been addressed to the improvement of external accounting statements of NPO's and is therefore normative in approach. There have however been a number of recent suggestions that this normative approach has not ,taken sufficient account of the realities of the NPO environment and that research has proceeded as if NPOs were nearly the same as organisations in the profit seeking sector of the economy (PSOs). In an attempt to redress this balance and to provide an insight into accounting in the context of the NPO, this study has attempted to describe accounting information, particularly external financial reports, and its users in five organisations from one part of the NPO sector, churches. The study is essentially descriptive and seeks to approach NPO sector accounts with as little PSO sector bias as possible. The study is also inductive in approach in that it seeks to generate hypotheses for testing in later deductive research. The use of a descriptive approach has necessitated the development of new techniques, particularly in the analysis of accounts, and has demonstrated the use of questionnaires and interview techniques in a descriptive accounting study. The empirical part of the research, carried out in five case studies, consists of three distinct areas: a study of external financial reports, their content, structure and context. a questionnaire survey of users of external financial reports. and finally interviews with a selected number of users of accounts. The main findings and hypotheses generated by the study fall into fifteen major areas. Some of these relate to accounting information in general: that accounts are models and that users employ an information search procedure in reading accounts. However, most ideas and hypotheses relate specifically to the NPO environment: consolidation issues, balance sheet construction, absence of expert users, non-decision uses for accounts, lack of fund accounting, the budgeting process as a key vehicle for allocating funds, understanding of accounts by users, pressure for changes in accounts and measurement bases in use. These ideas and hypotheses for further research arose from key observations in the study and give rise to a number of areas for future study in the context of information and NPOs. The research has yielded a number of new insights about the accounting reports of churches suggesting that the structure and content of the reports are closely contingent on the economics. structure and funding of church organisations and that there are several common patterns in the diversity of accounting statements found, especially in balance sheet construction and use of fund accounting. The study of recipients of accounts has given some detailed information about how accounts of NPOs are used by 'external' and 'internal' users and provided a useful profile of users. This profile is useful in helping to rank the relative importance of users of accounts and also shows an apparent lack of expert users of accounts, there certainly being no identifiable group of expert users. This part of the study also identified only slight pressure from users for changes in accounting reports. Although the study of users also identified little decision use for accounting information there does appear to be a widespread interest in accounting information, probably for monitoring purposes. Among the practical recommendations form the study are that: NPOs should give a clear description of how their accounts are structured; there should be clear disclosure of the measurement basis used in the accounts; budgets would be a useful addition to accounting reports; and an attempt ought to be made to provide an overall movement of funds statement.
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