Mandatory Service Performance Reporting and Audit: Responses from Charities

Growing regulatory attention has extended to charity service performance reporting and its external audit, yet little is known about how charities respond when both are mandated. Drawing on a documentary analysis of 120 reports from large New Zealand charities and interviews with preparers and auditors, we examine the responses to these mandates. Using the decoupling theory, we find substantial formal compliance, but the audited statements of service performance were dominated by verifiable quantitative outputs, while qualitative outcome- and impact-oriented information was less prevalent. The audit process strengthened reporting routines, reducing policy-practice gaps, but contributed to means-ends tensions by encouraging reliance on quantitative information and shifting qualitative information to voluntary reporting mechanisms. By demonstrating charities’ emergent and deliberate responses to the mandates, we reveal how audit shapes reporting practices and the intentionality of responses.