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An investigation of accounting, governance and executive compensation practices in non-profit organizations: The case of UK charities

An investigation of accounting, governance and executive compensation practices in non-profit organizations: The case of UK charities
An investigation of accounting, governance and executive compensation practices in non-profit organizations: The case of UK charities
This thesis seeks to investigate the accounting, governance and executive compensation practices of non-profit organizations (NPOs). Specifically, this thesis explores whether UK charities engage in earnings management practices, how they implement governance practice and its effectiveness on financial accountability, and the determinants of CEO compensation in the UK charitable sector. Informed by several theoretical perspectives, namely stakeholder theory (ST), resource dependence theory (RDT) and the social theory of agency (STA), this thesis partially relies on a sample of UK charities (1414 charities in the second chapter and the 250 largest charities in the third and fourth chapters). This study finds that: (i) UK charities use accrual accounting to manage their financial results (earnings management) to a zero level; (ii) the presence of UK charity governance (notably board diversity and the presence of experts on the audit committee) are positively associated with financial accountability; and (iii) while organizational performance is not found to be associated with CEO compensation, elements of the governance structure and CEO characteristics have a significant influence on CEO compensation. As a result, this thesis claims several contributions to the literature, theory and practice. Specifically, this thesis not only documents the practice of earnings management in UK charities, but also asserts the significance of several governance factors to organization accountability, such as the diversity of the board and the presence of experts on audit committees, and suggests several determinants influencing charity CEO compensation (for instance, governance elements, government funding, charity age, size and sectoral factors). The thesis also demonstrates the applicability of ST, RDT and STA in a non-profit context. Lastly, this thesis provides several important implications for academia and practice towards developing theories and regulations/guidelines in relation to accrual accounting practice, governance and CEO compensation in non-profit organisations.
Nguyen, Tam
f2efcd9d-14ad-450d-a7ad-5630e910aaa1
Nguyen, Tam
f2efcd9d-14ad-450d-a7ad-5630e910aaa1
Soobaroyen, Teerooven
6686e2f8-564f-4f7f-b079-9dc8a2f53a48

Nguyen, Tam (2016) An investigation of accounting, governance and executive compensation practices in non-profit organizations: The case of UK charities. University of Southampton, Southampton business School, Doctoral Thesis, 295pp.

Record type: Thesis (Doctoral)

Abstract

This thesis seeks to investigate the accounting, governance and executive compensation practices of non-profit organizations (NPOs). Specifically, this thesis explores whether UK charities engage in earnings management practices, how they implement governance practice and its effectiveness on financial accountability, and the determinants of CEO compensation in the UK charitable sector. Informed by several theoretical perspectives, namely stakeholder theory (ST), resource dependence theory (RDT) and the social theory of agency (STA), this thesis partially relies on a sample of UK charities (1414 charities in the second chapter and the 250 largest charities in the third and fourth chapters). This study finds that: (i) UK charities use accrual accounting to manage their financial results (earnings management) to a zero level; (ii) the presence of UK charity governance (notably board diversity and the presence of experts on the audit committee) are positively associated with financial accountability; and (iii) while organizational performance is not found to be associated with CEO compensation, elements of the governance structure and CEO characteristics have a significant influence on CEO compensation. As a result, this thesis claims several contributions to the literature, theory and practice. Specifically, this thesis not only documents the practice of earnings management in UK charities, but also asserts the significance of several governance factors to organization accountability, such as the diversity of the board and the presence of experts on audit committees, and suggests several determinants influencing charity CEO compensation (for instance, governance elements, government funding, charity age, size and sectoral factors). The thesis also demonstrates the applicability of ST, RDT and STA in a non-profit context. Lastly, this thesis provides several important implications for academia and practice towards developing theories and regulations/guidelines in relation to accrual accounting practice, governance and CEO compensation in non-profit organisations.

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Published date: December 2016
Organisations: University of Southampton, Southampton Business School

Identifiers

Local EPrints ID: 404443
URI: http://eprints.soton.ac.uk/id/eprint/404443
PURE UUID: 8c7475cd-3939-4cf4-9ab4-44906382678d
ORCID for Teerooven Soobaroyen: ORCID iD orcid.org/0000-0002-3340-1666

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Date deposited: 18 Feb 2017 00:23
Last modified: 19 Jun 2019 00:32

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