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Earnings Quality in Nonprofit Versus For-Profit Organizations: Evidence From the Microfinance Industry

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  • Beisland, Leif Atle
  • Mersland, Roy

Abstract

This study uses data from the microfinance industry to analyze differences in earnings quality between for-profit and nonprofit organizations. The two sets of organizations differ with respect to both governance mechanisms and managerial incentives, and little research has been conducted to investigate how such differences affect the quality of financial reporting. Overall, we find little evidence of differences in earnings quality between our two samples in the aggregate. We do, however, observe significant differences among the types of nonprofit organizations; this finding suggests that the concept of a “nonprofit level of earnings quality” is ill defined.

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  • Beisland, Leif Atle & Mersland, Roy, 2014. "Earnings Quality in Nonprofit Versus For-Profit Organizations: Evidence From the Microfinance Industry," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 43(4), pages 652-671.
    • Handle: RePEc:zbw:espost:323997
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    References listed on IDEAS

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    1. Mary E. Barth & Wayne R. Landsman & Mark H. Lang, 2008. "International Accounting Standards and Accounting Quality," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 46(3), pages 467-498, June.
    2. Mersland, Roy, 2009. "The Cost of Ownership in Microfinance Organizations," World Development, Elsevier, vol. 37(2), pages 469-478, February.
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    6. Beisland, Leif Atle & Mersland, Roy, 2013. "Earnings Quality in the Microfinance Industry," EconStor Open Access Book Chapters, in: Microfinance in Developing Countries: Issues, Policies and Performance Evaluation, pages 83-106, ZBW - Leibniz Information Centre for Economics.
    7. Beisland, Leif Atle & Mersland, Roy, 2012. "An Analysis of the Drivers of Microfinance Rating Assessments," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 41(2), pages 213-231.
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    10. Leif Atle Beisland, 2011. "The predictive ability and value relevance of accounting measures," International Journal of Economics and Accounting, Inderscience Enterprises Ltd, vol. 2(3), pages 215-241.
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    1. Leif Atle Beisland & Roy Mersland & Øystein Strøm, 2018. "Use of Big Four auditors and fund raising: evidence from developing and emerging markets," International Journal of Emerging Markets, Emerald Group Publishing Limited, vol. 13(2), pages 371-390, April.

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