Implications of equity theories on accounting statements disclosed by third sector institutions - doi: 10.4025/enfoque.v26i2.5203

Abstract

The development of the Third Sector presupposes the overcoming of challenges such as efficiency,collaboration, sustainability, legitimacy, and above all, to guarantee the disclosure of its economic and financialcondition, as well as its performance in the implementation of social projects and programs. However, onemay notice that in Brazil accounting statements prepared by Third Sector institutions are adaptations ofstatements created for private corporations, which can hamper the disclosure process. The various theoriesof Equity (proprietary, entity and funds) highlight the characteristics of organizations, corporate or otherwise,and the different perspectives in relation to the focus of accounting disclosure. Thus, this paper aims atexplaining how such theories influence the formulation of the practical standards by regulatory agencies in Brazil and in the United States, and consequently, the elaboration and release of accounting information byThird Sector institutions. A case study on Fundação Zerbini was developed, which revealed incoherenciesin the adoption of Equity theories. These inconsistencies compromised the access of outsiders to thatinstitution’s accounting data.