Purpose -The purpose of this paper is to investigate the phenomenon of accounting in non-governmental organisations (NGOs). It seeks to understand accounting processes and reporting practices in NGOs and the conditions that sustain those processes and practices. NGOs have become important institutions in world affairs but accounting research has not developed significant interest in their operations. Design/methodology/approach -The research executes a grounded theory strategy as the principal methodology for the inquiry. Fieldwork was undertaken in three Tanzanian NGOs. Findings -The research established the importance of accounting in the process of navigating organisational legitimacy. This was achieved due to its important role in symbolising organisational competence. Two principal strategies were employed by organisations in navigating legitimacybuilding credibility and bargaining for change. Originality/value -The paper makes a contribution to the limited empirical research into accounting in NGOs in developing countries and to grounded theory, accounting research. The principal finding, that in the NGOs studied the primary purpose of accounting was its symbolic use in navigating legitimacy and that it has a minimal role to play in internal decision making, is an important finding for practice as well as for understanding and knowledge. Finally, the paper sheds light on accountability in NGOs by narrating how the phenomenon is constructed and perceived by organisations and stakeholders. Future research should extend our understanding of these phenomena across a broader range of NGOs to incorporate differences in geographical location, religious affiliation and also include Northern donor organisations.

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PurposeThis paper seeks to investigate the influence of stakeholders on accountability relationships and the development of accounting practices and processes within two Tanzanian non‐governmental organisations (NGOs).Design/methodology/approachStakeholder analysis is employed to evaluate the positions of stakeholder groups in terms of Mitchell et al.'s attributes of power, legitimacy and urgency. Data analysis was undertaken using a grounded theory approach.FindingsThe research found that overseas donors were the stakeholders with the highest salience as a result of which they significantly influenced accountability relationships and accounting processes and practices within NGOs. Despite the often proclaimed NGOs' objective of improving welfare of beneficiary groups there appeared to be little accountability by NGOs to beneficiaries. Differences in the accounting functions in the NGOs were explained by the influence of dominant stakeholders, the credibility of the organisation and its managers and the varied ways through which the organisations negotiated and accounted for funding. Moreover, accounting was virtually unemployed in internal decision‐making processes indicating that it was largely a tool for satisfying claims of the highly salient stakeholders.Research limitations/implicationsThis paper makes a contribution to the literatures of both stakeholder theory and NGO accounting. From the grounded theory analysis it is suggested that the stakeholder framework of Mitchell et al. could be usefully extended in the three areas of power asymmetries of definitive stakeholders, stakeholder salience asymmetries across organisational phenomena and asymmetries across time.Originality/valueThe paper contributes to the empirical accounting literature by seeking a deeper understanding of how and why accounting and accountability relationships develop within NGOs. It sheds light on a type of organisation that has not been extensively studied in the public sector management literature.

PurposeTo report findings of audit quality differences amongst audit firms in a developing country. Specifically, we examine the assumption of marked audit quality differences amongst large audit firms (Big 4s) and the Small and Medium Practices (SMPs).Design/methodology/approach First, we develop scales for assessing perceived audit quality in the financial services sector based on qualitative data obtained from 106 audit practitioners, 31 Credit Analysts and 13 Board members. We use NVivo© to analyse the 13 transcribed interviews and follow 'cross-case analysis' to visualise dimensions and scales of audit quality. Then we use measurement scales developed and obtain quantitative data from 183 board members and top executives in the financial services sector and test for perceived audit quality differences amongst audit firms using a Mann-Whitney U test. FindingsOur findings suggest that audit quality is a multi-dimensional construct comprising of levels of discretionary accruals; compliance of audited accounts to accounting standards, law and regulations; and audit fees. Based on these measures, we find that Big 4 audit firms ensure more compliance with accounting standards, Law and other regulatory requirements than SMPs. However, taking all the three audit quality dimensions together reveals no significant differences in audit quality levels between Big 4 and SMPs.

Subject area The subject areas for this case are auditing, fraud and investigations. It is also relevant for teaching aspects of corporate governance. Student level/applicability This case consolidates techniques and methodologies of special investigations and demonstrates weaknesses in governance and internal controls. It is appropriate for final year undergraduate students and graduate students who have attended classes on basics of accounting and financial reporting. Case overview The case is about institutional governance and the effects of ineptness at different levels of an organization that resulted in TAS. 133 billion being “improperly” paid out to 22 firms in the financial year 2005/2006.The case is structured to focus at the dilemma of the Director of Finance as an individual who featured in the latter stages of an extensive fraud where old unclaimable debts were revived and were being claimed and paid to fictitious assignees involving a number of Central Bank officials. However, the case seeks to interrogate issues related to financial records and controls in which the position of Director of Finance had more relevance. Expected learning outcomes Working on this case should result in enabling students to acquire expertise necessary for forensic accounting. It should also enable students to learn to gain an understanding of the practice of investigative and forensic accounting as well as an understanding of the interrelationships of the parties involved in forensic investigations. Supplementary materials Teaching note.

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