Corporate Governance, Internal Control System and Financial Reporting Quality Among Saccos in Arua District, Uganda.
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Date
2025-10-30
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Makerere University Business School
Abstract
This study examines the relationship between Corporate Governance and Internal Control Systems on Financial Reporting Quality among SACCOs in Arua District, Uganda. Recognizing SACCOs’ critical role in promoting financial inclusion, particularly in rural communities, the research addresses persistent challenges related to delayed, inconsistent, and incomplete financial reporting that undermine transparency and stakeholder confidence.
The study employed a cross-sectional research design and data were collected from 123 respondents across 31 SACCOs using structured questionnaires. The study analyzed demographic and institutional characteristics and applied Pearson correlation and multiple regression analyses to investigate the relationships among corporate governance, internal control mechanisms, and financial reporting quality.
Findings reveal a significant positive relationship between Corporate Governance and Financial Reporting Quality, with board composition and role performance emerging as key drivers of enhanced financial transparency. Internal Control Systems also showed a positive correlation with reporting quality, particularly through effective information communication and monitoring, however, their predictive power was not statistically significant. The combined model explained 28.6% of the variance in financial reporting quality, suggesting other factors warrant further studies.
The study underscores the importance of strengthening board effectiveness and specific internal control components to improve financial reporting in SACCOs. Recommendations include enhancing board diversity and independence, capacity-building for board members, and increased regulatory support from authorities like the Uganda Microfinance Regulatory Authority (UMRA) and this provides practical insights for policymakers, regulators, and cooperative leaders aiming to foster financial accountability and sustainability in the cooperative sector.
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This is a master's thesis.
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Emuron, P. (2025). Corporate Governance, Internal Control System and Financial Reporting Quality Among Saccos in Arua District, Uganda. Makerere University Business School.