Lecturer in Accounting Sofia Yasmin has begun work on two major projects examining the fast-expanding – and increasingly contentious – world of charity accountability and governance.
Sofia’s subject specialism is accountability and governance in the UK not-for-profit industry, and her research comes at a time of much controversy. For instance, regulators recently launched an inquiry into Age UK, the country’s largest charity for the elderly, after it was revealed that it had made millions of pounds by promoting energy, insurance and funeral care plans to pensioners.
The accountability of charities has come under greater spotlight as the size of the industry has mushroomed. Today across England and Wales there are more than 165,000 registered charities with a total annual income of £69bn. A number of big charities receive as much as 90 per cent of their income from government while many charities have set up trading arms.
Sofia, who recently joined AMBS after completing her PhD at the University of Hull on accountability within the Muslim charity sector, says this growth has triggered a whole set of new questions.
“From an academic point view one of the main questions is how well do these charities report on their financial activities? They might think they are communicating their accountability in an acceptable way, but actually there is often no-one there to tell them otherwise.”
Sofia adds that these issues are much more pertinent in the Muslim charity sector which has come under the spotlight in recent times. For instance, last August the Charity Commission opened statutory inquiries into “significant discrepancies” in the finances of two Islamic charities, The Light and the Fatimiyya Trust.
She says her initial interest in the wider subject was spurred by the fact that charities are dealing with such significant amounts of money. “There are huge amounts of money involved now, so it is all the more important that charities properly account for their activity.
“Looking ahead, what I am interested in is whether accountability itself is enough for the sector, especially when you look at issues of legitimacy, trust and public perception. Ultimately, accounting needs to fit somewhere in the real world, it needs to have wider implications. The financial numbers in a set of accounts may be fine, but are they legitimate? Are they to be trusted? If not, why? And most importantly, who decides?”
