Internal Controls, Managerial Competence and Financial Performance of ABU Sacco
DOI:
https://doi.org/10.47672/ajf.1068Keywords:
Internal controls, managerial competence and financial performanceAbstract
Purpose: This study aimed at establishing the relationship between Internal controls, managerial competence and financial performance of ABU SACCO Mbarara.
Methodology: A cross- sectional study design was adopted and based on a population comprised of ABU SACCO coverage in her 6 branches. A sample size of 35 respondents was selected. The study used the questionnaire to collect data and extracted financial data from audited financial statements of the SACCO and management reports over the four years 2014-2017. Correlation and regression analysis were done with the use of SPSS ver. 21, PMT tool was used to analyze secondary data.
Findings: The study findings reveal that there is a significant positive relationship between internal controls and financial performance at ABU SACCO (r=.515, p<.01). This means that any positive change in internal controls is associated with a positive change in financial performance. The findings further revealed that there is a significant positive relationship between managerial competence and financial performance at ABU SACCO (r=.765, p<.01). All the dimensions of internal controls have a positive significant relationship with financial performance apart from control activities and control environment, plus the dimensions of managerial competence have a positive significant relationship with financial performance apart from interpersonal skills. A regression analysis established that internal controls and managerial competence explain 58.4% of the variations in the financial performance of ABU SACCO. The implication is that 41.6% is explained by variables not considered in this study such as; political and inflation factors.
Downloads
References
AICPA, A. I. o. C. P. A. (2013). Committee of Sponsoring Organization of the Trade way Commission (COSO). Internal Control Integrated Framework USA.
Amin, M. E. (2005). Social science research: Conception, methodology and analysis: Makerere University.
Amudo, A., and Inanga, L . (2009). Evaluation of Internal Control Systems: A Case Study from Uganda. International Research Journal of Finance and Economics, 125-144.
Arthur, C. (2012). Research Methods and Statistics (1st ed.).
Arwinge, O. (2014). Internal control in the financial sector: A longitudinal case study of an insurance company (Doctoral dissertation, Uppsala universitet).
Badara, M. A. S., & Saidin, S. Z. (2014). Internal audit effectiveness: Data screening and preliminary analysis. Asian Social Science, 10(10), 76-85.
Chen, Y. Y., & Young, M. N. (2010). Cross-border mergers and acquisitions by Chinese listed companies: A principal–principal perspective. Asia Pacific Journal of Management, 27(3), 523-539.
Colombo, M. G., & Grilli, L. (2005). Founders’ human capital and the growth of new technology-based firms: A competence-based view. Research policy, 34(6), 795-816.
Cronbach, L. J. (1951). Coefficient alpha and the internal structure of tests. psychometrika, 16(3), 297-334.
Fatoki, O. (2014). The impact of managerial competencies on the performance of immigrant-owned enterprises in South Africa. Mediterranean Journal of Social Sciences, 5(6), 141.
Jensen, M. C. (1976). The theory of the firm: Managerial behaviour, agency costs and ownership structure. Jounal of financial Economics, 3(4), 305-360.
Khamid, A., & Musfirah, H. (2010). Foreign workers must pass English test to qualify for skilled status. Channel NewsAsia, 23.
KPMG. (2001). Corporate Governance in Europe: KPMG Survey 2001/02.
Messier, W. F., Glover, S. M., & Prawitt, D. F. (2008). Auditing & assurance services: A systematic approach: McGraw-Hill Irwin Boston, MA.
Mugenda, A. (2003). Research methods Quantitative and qualitative approaches by Mugenda. Nairobi, Kenya.
Munene, M. J. (2013). Effect of internal controls on financial performance of technical training institutions in Kenya. An un-published masters dissertation
Ngmin, E. L. (2016). An examination of the relationship between internal control systems and internal audit in government agencies: A case study of some selected government agencies in the Brong Ahafo region (Doctoral dissertation).
Ondieki, N. M. (2013). Effect of internal audit on financial performance of commercial banks in Kenya. Unpublished Master of Science in Finance Thesis: University of Nairobi
Pennacchi, G., & Rastad, M. (2011). Portfolio allocation for public pension funds. Journal of Pension Economics & Finance, 10(2), 221-245.
SACCO, E. (2016). Annual audit Report In B. A. CPA (Ed.).
SACCO, E. (2017). Annual audit Report In B. A. CPA (Ed.).
Saunders, M., Lewis, P., & Thornhill, A. (2007). Research methods for business. London: Pitman, 124-126.
Sekaran, U. (2003). Research methods for business . Hoboken: NJ: John Wiley & Sons.
Terry, F. T. e. s. I. P. R., W. Bygrave, N. Carter, S. Manigart, C. Mason, G. D. Meyer, & K. G. Shaver (Eds.), Frontiers of entrepreneurship research (pp. 381– 392). Wellesley, MA: Babson College. (2005).
Treba, L. M. (2003). Evaluating internal controls: control self-assessment in Government. Journal of Finance and Accounting, 4(3), 55-67.
US, W. (2002). Sarbanes-Oxley Act.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2022 Dr. Nsambu Kijjambu Frederick, Christina Kyomuhendo
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work’s authorship and initial publication in this journal.
