Makerere Business Journal

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Perceived auditor independence factors in Uganda
(Makerere University Business School, 2017) Kaawaase Kigongo, Twaha; Korutaro Nkundabanyanga, Stephen
Purpose – The purpose of this paper is two-fold: the first is to establish whether, in the face of the company-pay model, financial statement preparers perceive threat and enhancing factors of Auditor Independence (AI) the same way as users and external auditors, then secondly to model AI factors in Uganda. Design/methodology/approach – A two-methods approach is used which comprises, use of a oneway ANOVA where the independent variable (AI factors) is measured using different participants or groups (preparers, auditors and users) to examine the differences in opinions between the groups, and confirmatory factor analysis technique of structural equation modelling to achieve the two-fold objective. We use a self-administered survey questionnaire to accountants in Uganda involved with entities’ financial statements as preparers, external auditors or users to collect data. Findings – There are significant differences in opinions of the preparers and the other stakeholders (users and auditors) regarding non-rotation of audit firm, staff and partners and, board control of appointment and remuneration of auditors; as AI undermining factors. The preparers opine that failure to rotate auditors and the control of auditor appointment and remuneration by the board is more AI constraining, relative to the opinions of both the auditor and user regarding these factors. Financial statement preparers were more concerned than auditors and users that failure to rotate auditors and the control of auditor appointment and remuneration by the board impairs AI. A sixdimensional model of AI undermining factors was fitted and a five-dimensional model best fitted for AI enhancing factors. Practical implications – The paper provides two models that can be used by accountancy bodies or other stakeholders as a starting point in improving/or evaluating AI in developing countries. Originality/value – This study is representative of key parties on the demand and supply sides of the audit services market, auditors, financial report preparers and financial report users. It thus extends the frontiers of knowledge on critical factors affecting AI in a developing country context and has implications for theory, policy and practice.
Assessing local road transporters’ participation readiness in oil and gas industry in Uganda.
(Makerere University Business School, 2017) Namukasa, Juliet; Kabagambe Bategeka, Levi; Nakayima, Farida
Purpose - The study sought to establish the readiness of local road transport service providers to participate and deliver the desired services in Uganda’s budding oil and gas industry. Methodology/Approach - The study adopted a mixture of qualitative and quantitative research methodologies to assess the readiness of local road transport service providers on the dimensions of eligibility compliance and capacity parameters while transport service quality was measured based on reliability, extent of the service, comfort, safety, and affordability). Research Design - A cross sectional survey design was used. Two questionnaires were used; one questionnaire was sent to clients (companies dealing in oil and gas related products) and another was sent to the local road transporters. Findings - Local road transport providers are largely wanting in compliance with eligibility requirements to conduct business. Notable challenges facing local transporters rotate around three aspects: legal and regulatory constraints and poor condition of roads, which together accounted for about 68% of the challenges. Research Limitations -The extant study looked at the readiness of local road transport service providers in the oil and gas industry in Uganda. This could limit the generalizations to the entire industry as the analysis did not cover rail, water and air transport. Practical Implications - There is need to strengthen the institutional capacity of local road transporters to enable them formalise their businesses and increase their eligibility status. Only when this is done will they be able to access tenders and actualise the intentions of the local content oil and gas policy. Originality/Value - The results contribute towards the limited empirical and theoretical evidence regarding the readiness of local road transport service providers to deliver the desired services in the oil and gas industry in Uganda.
Perceived internal audit roles and challenges in a developing economy
(2017) Bananuka, Juma; Mukyala, Veronica; Nalukenge, Irene
Purpose - The purpose of this study was twofold: 1) to explore the perceived Internal Audit (IA) roles and challenges faced by internal auditors in fulfilling their mandate among listed firms in Uganda and 2) to examine the extent to which internal auditor challenges could inhibit the performance of internal auditor roles. Design/ methodology – This is an exploratory study with mixed methods design. We collected data from internal auditors of 13 listed firms in Uganda through both the questionnaire and interview guide. Data were analyzed using SPSS and XL STAT 2016 with Partial Least Square Modelling because of the small sample used in this study. Findings – We find eight (8) most perceived internal auditor roles in Uganda such as ‘internal audit reports on the system for generating financial information’. Many of these roles suggest that internal auditors perceive their roles consistent with traditional ones that were designed to safeguard firm’s assets and assist in the production of reliable accounting information for decision-making purposes. We also find five (5) most perceived internal auditor challenges such as ‘internal audit recommendations are not worked on by management’. Furthermore, these internal auditor challenges explain about 31% variation in perceived internal auditor roles. Research limitations/implications - As the internal auditors face many difficulties, it is difficult to see how they could perform their perceived roles effectively and thereafter embark on their expanded roles as espoused in the model charter of Institute of Internal Auditors (IIA). Although we employ a relatively small sample size, this study’s findings can be generalized to Uganda and other similar environments’ listed firms. The results are useful in informing the debates of the regulators, standard setters, external auditors, academicians and policy makers. If internal audit function appear incipient in listed firms in this environment, it could be a worthwhile endeavor to establish what it is like in non-listed firms. Originality / value – We examine perceived internal auditor roles, internal auditor challenges and how the latter affects the former using evidence from Uganda – a developing economy. We also contribute towards a methodological position of mixed methods design by producing results from a smaller sample augmented by interview results in an environment characterized by smaller populations so that inferences can be made. The interpretive research agenda caters to social aspects of internal auditing neglected by positivist studies that largely tackle questions founded in the realist ontological position.
Knowledge management and high performance in Uganda’s financial institutions
(Makerere University Business School, 2017) Bagorogoza Kyogabiirwe, Janatti; Moya, Musa
Purpose: – The purpose of this paper is to report the findings of the mediation effect of the high performance organisation (HPO) framework in the relationship between knowledge management and high performance. Design/methodology/approach: – The study adopts a cross-sectional design and quantitative approach to collect data which was used to answer the study objectives. Findings: – The high performance framework had a significant positive effect on high performance while knowledge management (KM) had direct and indirect positive effect on high performance, through the partial mediation of HPO framework. This suggests that the HPO framework has an effect in the improvement of the level of performance in financial institutions (FIs). Research limitations/implications: –The study was cross-sectional which is limited to trace longterm effects of knowledge management and the HPO framework on high performance. Therefore, a longitudinal study may be undertaken. The study was also quantitative which limited the in-depth understanding of KM aspects in the FIs, in this case a qualitative approach could be better. The inability to obtain analytical and local literature on HPO framework and high performance limited this study. . Practical implications: The study strengthens knowledge management as a key strategy for Managers to use in FIs to improve performance and the HPO framework as a gateway to build high performance organisations. Originality/value: The study generates empirical evidence on less studied phenomena knowledge management in the FIs. The evidence highlights the powerful influence of the HPO framework in improving organisational performance based on knowledge management.
Firm characteristics, innovation, financial resilience under austerity and survival of firms: a pitch
(Makerere Business Journal, 2017) Mugumya, Elizabeth
Purpose – The purpose of this paper is to apply the pitching research template that Faff (2015, 2016) developed to a research proposal on firm characteristics, innovation, resilience and survival of firms in the financial institutions sector. Design/methodology/approach – this paper begins with a brief commentary on using the pitching research template to identify the core elements of the research proposal. It then describes the researcher’s personal reflections on the pitch exercise itself Findings – The pitch exercise is an excellent avenue of clearly and efficiently presenting and communicating the researcher’s thoughts on the research proposal. Originality/value – This paper shows that the pitching research template that Faff (2015, 2016) developed is an interesting and effective research tool useful in starting a research journey in a straight-forward and simple avenue to avoid unnecessary off-tangent from the envisaged research direction.

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