By Ken Ashford (former Charity Commission)
Over the past 20 years the UK has developed a model for accounting and reporting by charities which has proved to be robust and useful. The model has been pioneered mainly by accountants who were dissatisfied with applying the business model of accounting to charities but they have been assisted by pressures for more and better accountability and transparency. The UK regime has been based on adaptations of UK accounting standards (UK GAAP) which have been made possible because of the UK’s accounting standards board practice of introducing industry interpretations of standards.
The main driver for a UK charity reporting regime has been that business standards of accounting do not fit charities. The same problem arises worldwide, but there are currently (apparently) no generally accepted global mechanisms to allow the preparation and acceptance of specialist NGO standards. This is especially true of the new International Accountancy Standards which are entirely based on profit seeking entities. There have been some suggested accountability frameworks, each of which seems consistent with, but not as comprehensive as the UK model.
It would be extremely presumptuous for the UK to suggest that our standards of reporting should be applied worldwide (a new form of colonialism?). However is it possible that the approach to accountability that our model encompasses, could be moulded (by one or more international forums) into a global protocol which would for the basis for future NGO accounting principles and standards developed by national bodies?
The paper puts together the key elements of this argument and provides a tentative first draft of a global protocol.