Comparability within the financial statements of Gozitan band clubs : an analysis

Abstract

PURPOSE : This study examines comparability among the financial statements of Gozitan band clubs. It aims to determine what financial information is being presented and the reason behind the choice of accounting basis. It assesses whether treasurers follow accounting standards and guidelines, and whether any assistance is requested in financial statement preparation. DESIGN : The research objectives were achieved by a content analysis of band clubs’ financial statements, as well as by a series of semi-structured interviews with treasurers. FINDINGS : The findings indicate that while financial statements are being prepared by Gozitan band clubs, their treasurers focus on the Statement of Income and Expenditure. External assistance during the preparation process is sought from accountants and auditors. Most treasurers are not familiar with accounting standards, and the guidelines of LN 379 of 2012 are seldom used, indicating the need for further training and support. Most notably, there is an emerging trend towards the use of the accruals basis, which can be attributed to various factors, including the social pressures faced by Gozitan organisations to outdo their peers. CONCLUSIONS : The study concludes that comparability among Gozitan band clubs is lacking. Although clubs are consistent and uniform in their own financial reporting practices, treasurers do not deem comparability with other clubs to be important or even possible. Recommendations to mitigate this situation include the revision of the accounts thresholds found in LN 379 of 2012 to specify the accounting basis to be used so that comparability may be facilitated. VALUE : This dissertation seeks to fill the gap in information regarding financial reporting practices in the Gozitan voluntary sector by analysing band clubs’ financial statements. Such research should benefit local band clubs in particular and the Gozitan voluntary sector in general, as well as the accountancy profession, by identifying issues that could raise the level of NPO financial reporting.