Abstract:

As many public sector organisations are facing funding cuts, the prominent contributions of NPOs in providing sustainable public services is growing as without these effort, communities will collapse with devastating effect on the country’s development. However, it is vital for NPOs to provide sufficient transparency level through their annual report to facilitate the assessment on their accountability due to increased public scrutiny regarding the manner in which NPOs are run and managed as there are increasing incidences of fraud and misappropriation of assets by NPOs. Hence, this study examines the extent of disclosure made by the NPOs in relation to financial reporting, anti-money laundering and terrorism financing perspective. The annual reports of 83 NPOs registered with Companies Commission of Malaysia are assessed for the year of 2009 until 2011. Findings of this study for the financial reporting perspective revealed that, the disclosure of NPOs is only at moderate level towards the financial stability, whereas, disclosures for the financial performance and organization efficiency was relatively weak. Similarly, results showed that the disclosures of anti-money laundering and terrorism financing within NPOs in Malaysia is weak. This in turn is expected to provide useful information in strengthening NPOs transparency level with the ultimate aim to increase their credibility to build the public trust.