Coping with COVID-19: the role of accounting in shaping charities' financial resilience
Accounting, Auditing & Accountability Journal
ISSN: 0951-3574
Article publication date: 10 May 2021
Issue publication date: 23 July 2021
Abstract
Purpose
The purpose of this paper is to explore the role of accounting in shaping charities' financial resilience during the COVID-19 crisis.
Design/methodology/approach
A case study of a charity was conducted. The financial resilience framework (Barbera et al., 2017) was applied to explore how accounting contributes to charities' capacity to cope with crises.
Findings
The results show how the accounting practices of budgeting, forecasting and performance reporting (financial and nonfinancial), as well as “accounting talk,” form part of the anticipatory and coping capacities that provided the charity the financial resilience to navigate the COVID-19 crisis.
Practical implications
The paper evidences the important role accounting plays in establishing financial resilience to help charities cope with crises, particularly the importance of having accounting practices established prior to a crisis and accounting information forming part of managers' discussions. The study also demonstrates that financial reserves have an important buffering capacity role.
Originality/value
This is the first paper to examine the role of accounting within a charity during an economic crisis. The authors explore the role of accounting in shaping a charity's financial resilience and demonstrate the applicability of the financial resilience framework to a sudden, unexpected crisis such as COVID-19. They extend the accounting talk literature by highlighting its importance to a charity and during a crisis.
Keywords
Acknowledgements
The authors would like to thank the staff of The One Box and The Fruit Box for their support and time. In particular we would like to thank Martin Halphen for allowing access and Vivien Yii and Brendan Shaw who were extremely generous with their time. We would also like to thank the editors of the special issue, especially Giulia Leoni, and the two anonymous reviewers for their constructive feedback and support. The review process and your comments have improved the paper.Funding for this research was provided by an industry grant from The One Box and a research grant from the Department of Accounting, Monash Business School. The financial support of both is gratefully acknowledged.
Citation
Kober, R. and Thambar, P.J. (2021), "Coping with COVID-19: the role of accounting in shaping charities' financial resilience", Accounting, Auditing & Accountability Journal, Vol. 34 No. 6, pp. 1416-1429. https://doi.org/10.1108/AAAJ-09-2020-4919
Publisher
:Emerald Publishing Limited
Copyright © 2021, Emerald Publishing Limited