Allocating Charities' Financial Reporting Requirements Using Tiers: Australian Perspectives

The Australian standard setter, funders and the sector itself express concern about reporting obligations established via regulatory requirements that are arbitrarily allocated via a tiered system based on income levels. This study investigates the utility of the current financial reporting framework via interviewing experienced preparers. Findings reveal stakeholders demand more detailed information, current accounting standards are seen as unsuitable, and irrelevant disclosures reduce report relevance. The tiered reporting system is viewed as outdated, especially for small and medium-sized charities. We contribute to the literature on Not-for-Profit accounting by highlighting current system limitations and suggesting improvements for alignment with stakeholder needs.