Accounting Transparency of Non-Governmental Organizations: A Case Study of the Red Cross in China and Spain

Abstract

Non-governmental organizations (NGOs) are becoming increasingly involved in international affairs, while facing a growing deficit of confidence due to an environment of information opacity. This situation not only affects NGO financing but also decreases general public confidence in NGOs, influencing their sustainability. Transparency in NGOs is thus important. This study conceptualizes accounting transparency and its evaluation methods through a comparative case study of the Red Cross Society of China (RCSC) and the Spanish Red Cross. The study assesses the organizations’ levels of transparency and the importance of regulations to the dissemination of information. The comparative analysis through the two NGOs’ websites demonstrates the importance of the regulations for ensuring transparency of these bodies (determining which type of information is voluntary and which is mandatory). Although the NGOs compared do not differ greatly in degree of transparency, they do not publish exactly the same information, especially in the financial area, the most essential area for inspiring donor confidence. This study thus offers an interesting and valuable contribution for both academics and professionals.