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What organisations need to prepare acccounts?


One of the first few things that I would typically teach students that are new to accounting is that all most organisations need to control what they do in some way.  Control can be of a financial nature, i.e. preparing financial statements, and this is something we typically associate with “for-profit” organisations.

However, many not-for-profit organisations also need to keep accounting records and have intricate financial/accounting based control systems. For example, a charity might like to know its sources of funding and keep a detailed trace on all expenditures. Similarly, any sovereign  state needs to keep track of its income (usually taxes) and its outgoings e.g. expenditure on schools, roads and social welfare. A few months ago, a number of articles on the annual financial report of the Vatican State caught my eye (see here and here). In brief,  the Vatican State had a surplus of about €10 million for 2010. The Vatican is a peculiar organisation in that it is somewhere between a Church and a State.  I can’t find the annual report on-line, but  as far as know one main source of income for the Vatican is the traditional “Peter’s Pence” collection held annually at all catholic churches across the world. The press releases surrounding the 2010 Vatican financial report seems to suggest that deliberate efforts were made compared to previous years to control costs and keep within budget. So, even the Vatican has a use for accounting information – both financial statements of some kind, and management accounting. By the way, if you do find the annual reports of the Vatican on-line, do get in touch

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About martinjquinn

I am an accounting academic, accountant and author based near Dublin, Ireland.

2 responses to “What organisations need to prepare acccounts?”

  1. Gerhard Kristandl says :

    I half-expected the Vatican’s annual reports to be in Latin – well, I found a first trace of its existence (we might need to send in Dan Brown to find the rest):

    http://www.zenit.org/article-29859?l=english

  2. Gerhard Kristandl says :

    Apparently, the Holy See does not release a full financial report anywhere public, but merely consolidates its financial results in a press release – one might try to re-engineer the initial balance sheet.

    http://visnews-en.blogspot.com/2011/07/holy-see-financial-statements-for-2010.html

    Seems as if we will have to wait for the Vatican’s IPO then 😉

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