Browsing by Author "Nalukenge, Irene"
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Item Adoption of Islamic banking in a non-Islamic country: evidence from Uganda(Journal of Islamic Accounting and Business Research, 2020) Bananuka, Juma; Katamba, David; Nalukenge, Irene; Kabuye, Frank; Sendawula, KasimuThis paper aims to examine the concept and practice of Islamic banking in the context of a non-Islamic country such as Uganda. Semi-structured interviews were used to elicit the strategies banks may use to ensure that the Islamic banking system is successful and to ascertain those factors that may hinder its success. Chief executive officers of business associations, heads of committees on Islamic banking and religious leaders were interviewed. The strategies used by financial institutions in ensuring the adoption of Islamic banking are now known such as “creating awareness of Islamic banking’s mode of operation among existing and potential clients.” The findings also show that factors such as “lack of trust among clients” may hinder the success of Islamic banking. The research findings are useful for informing the deliberations of regulators, the business community and financial institutions. The results are applicable only to those countries in the preparation stages of adopting Islamic banking services for the first time, but they could be generalized to any new product launch in any country.Item Corporate governance and internal controls over financial reporting in Ugandan MFIs(Journal of Accounting in Emerging Economies, 2017) Nalukenge, Irene; Tauringana, Ven; Mpeera Ntayi, JosephThe purpose of this paper is to investigate the relationship between corporate governance and internal controls over financial reporting (ICFR) of microfinance institutions (MFIs) in Uganda. Design/methodology/approach – This study was cross-sectional and correlational. In all, 70 Ugandan MFIs were surveyed and the data were analyzed using SPSS Version 20 to test the nine hypotheses which were put forward. The hypothesized relationships were tested using the ordinary least squares regression. Findings – The findings based on multiple regression analysis suggest that board role performance, expertise and Association of Microfinance Institutions in Uganda (AMFIU) membership are significant predictors of the ICFR. However, board independence and separation of CEO and chairman roles are not significant predictors. The results also show that the firm-specific control variables (auditor type, size, accounting qualification and age) are also not significant. Research limitations/implications – This study has limitations in that it is cross-sectional, thus limiting monitoring changes in behavior over time and also because the effectiveness of the ICFR was assessed using perceptions. Practical implications – Efforts by regulators and other stakeholders to improve the ICFR must focus on the corporate governance aspects such as board expertise and ensure that the board performs its roles. Originality/value – The paper adds to the existing literature on the corporate governance and ICFR by documenting the relationship between the corporate governance and ICFR. The study complements the previous studies on the ICFR by demonstrating that board expertise and board role performance improve the ICFR. Such evidence does not currently exist. The findings also indicate that an MFI which is a member of AMFIU was found to have better ICFR supporting self-regulation.Item Corporate governance, ethics, internal controls and compliance with IFRS(Journal of Financial Reporting and Accounting, 2018) Nalukenge, Irene; Nkundabanyanga, Stephen K.; Ntayi, Joseph M.Purpose – The purpose of this paper is to establish the relationship between corporate governance, ethical culture, Internal Controls over Financial Reporting (ICFR) and compliance with International Financial Reporting Standards (IFRS) by microfinance institutions (MFIs). Design/methodology/approach – This is a cross-sectional survey based on a sample of 85 MFIs in Uganda. Hypotheses were tested using partial least squares (PLS) analysis technique. An unweighed IFRS compliance index to capture the level of compliance with IFRS was constructed. Yet to capture corporate governance, ethical culture and ICFR variables, the perceptions of top management of MFIs have been taken into consideration. Findings – Corporate governance, ethical culture and ICFR, each makes a significant contribution to compliance with IFRS. Also both corporate governance and ethical culture are significantly associated with ICFR. However, compliance with IFRS by MFIs is better enhanced by corporate governance and ethical culture through ICFR. Research limitations/implications – Results support the idea that in terms of agency and virtue ethics theories, the board should support ICFR to minimize egocentric managers and other employees and also inculcate an ethical culture to achieve better compliance with IFRS because corporate governance and ethical culture are associated with sound ICFR which in turn lead to compliance with IFRS. Practical/implications – Boards of MFIs should encourage investments that improve ICFR. At the same time, regulators should ensure that boards are composed of members with financial expertise, with no conflict of interest and introduce mechanisms that encourage boards to perform their roles. Originality/value – The study contributes towards a methodological position by showing that the behavioural perspective of corporate governance can be an alternative to the boards’ structural variables in investigating compliance with IFRS. A direct association of ethical culture and compliance with IFRS and an indirect association through ICFR can be envisaged.Item Correlates of academic misconduct and CSR proclivity of students(Journal of Applied Research in Higher Education, 2014) Nkundabanyanga, Stephen K.; Omagor, Charles; Nalukenge, IreneThe purpose of this paper is to examine the effect of the fraud triangle, Machiavellianism, academic misconduct and corporate social responsibility (CSR) proclivity of students. Design/methodology/approach – The present study surveyed 471 university students. The study was cross-sectional and employed structural equation modelling in statistical modelling. Findings – The study provides evidence that perceived opportunity to cheat in examinations is the single most important factor accounting for significant variations in rationalization and academic misconduct. Similarly, low Machiavellians significantly get inclined to CSR ideals. The fraud triangle alone accounts for 36 per cent of the variations in academic misconduct, hence the error variance is 64 per cent of academic misconduct itself. This error variance increases to 78 per cent when a combination of perceived opportunity, rationalization, Machiavellianism is considered. Moreover, both Machiavellianism and academic misconduct account for 17 per cent of variations in students’ proclivity to CSR ideals. Research limitations/implications – Results imply that creating a setting that significantly increases a student’s anticipated negative affect from academic misconduct, or effectively impedes rationalization ex ante, might prevent some students from academic misconduct in the first place and then they will become good African corporate citizens. Nevertheless, although the unit of analysis was students, these were from a single university – something akin to a case study. The quantitative results should therefore be interpreted with this shortcoming in mind. Originality/value – This paper contributes to the search for predictors of academic misconduct in the African setting and as a corollary, for a theory explaining academic misconduct. Those students perceiving opportunity to cheat in examinations are also able to rationalize and hence engage in academic misconduct. This rationalization is enhanced or reduced through Machiavellianism.Item Determinants of the intention to adopt Islamic banking in a non-Islamic developing country The case of Uganda(ISRA International Journal of Islamic Finance, 2019) Bananuka, Juma; Kigongo Kaawaase, Twaha; Kasera, Musa; Nalukenge, IreneThis paper aims to investigate the contribution of attitude, subjective norm and religiosity on the intention to adopt Islamic banking in an emerging economy like Uganda, which is a secular state that is in the early stages of adopting Islamic banking. Design/methodology/approach – This study uses a cross-sectional and correlational research design. Usable questionnaires were received from 258 managers of their own micro businesses. A hierarchical regression analysis was used to test the hypotheses. Findings – Results indicate that attitude and religiosity are significant determinants of the intention to adopt Islamic banking, unlike subjective norm whose predictive power is subsumed in attitude. In the absence of attitude, subjective norm is a significant determinant of intention to adopt Islamic banking. Overall, attitude, subjective norm and religiosity explain 44 per cent of the variance in the intention to adopt Islamic banking in Uganda. Research limitations/implications – This study is cross-sectional, excluding the monitoring of changes in behavior over time. Further, the study used evidence from owner-managed micro businesses in Uganda. It is possible that these results are only applicable to Uganda’s micro businesses. Originality/value – Islamic banking is an emerging phenomenon on the African continent, especially in Sub-Saharan Africa, where most countries are secular states. As such, there are largely no empirical studies exploring the combined contributions of attitude, subjective norm and religiosity on the intention to adopt Islamic banking in an emerging economy after the national adoption of an enabling legal framework. To the best of the researchers’ knowledge, this is the first study that carries out this task.Item Evidence of Causality between Economic Growth and Electricity Consumption Expenditure in Uganda(Journal of Energy Research and Reviews, 2022) Alinda, Kassim; Tumwine, Sulait; Kaawaase, Twaha; Navrud, Ståle; Nalukenge, Irene; Sserwanga, ArthurThe aim of this study is to investigate the evidence of causality between economic growth and electricity consumption expenditure in Uganda for the period 1986 to 2017, aimed at contributing to literature on this topic and inform energy policy design in the country. Unlike previous studies on the causal link between energy consumption and economic growth, this paper introduces in capital stock as an intermittent variable in the causality framework. In this paper, we employed Johansen (1988, 1995) multivariate Cointegration and Vector Error Correction Model (VECM) based on Granger causality tests. Findings revealed a bi-directional causality between electricity consumption and economic growth in the long-term and distinct causal flow from economic growth to electricity consumption in the short-term and long-term Granger causality from capital stock to economic growth, with short-run feedback in the opposite direction. Therefore, the Government of Uganda should implement conservation policies only through reducing energy intensity and promoting efficient energy use to avoid decline in output but also strengthen its efforts towards capital accumulation in order to realize sustainable economic growth and meet the desired goal of sustainable energy for all.Item Firm characteristics, innovation, financial resilience and survival of financial institutions(Journal of Accounting in Emerging Economies, 2019) Korutaro Nkundabanyanga, Stephen; Mugumya, Elizabeth; Nalukenge, Irene; Muhwezi, Moses; Muganga Najjemba, GraceThe purpose of this paper is to examine the relationship among firm characteristics, innovation, financial resilience and survival of financial institutions in Uganda. Design/methodology/approach – This paper employs a cross-sectional research design, and responses from 143 officers of 40 financial institutions are analyzed using Statistical Package for the Social Sciences. The authors used ordinary least squares regression in testing the hypotheses. Findings – The authors find that firm characteristics of size, age, innovation and financial resilience have a predictive force on survival of public interest firms such as financial institutions. Research limitations/implications – The implication drawn here is that a combination of firm characteristics, firm innovation and financial resilience explains a significant contribution in the survival chances of financial institutions. However, as much as firm characteristics and financial resilience are significant, innovation explains more of the variances in financial institutions’ going concern appropriateness. Originality/value – This paper adds to the limited financial institutions literature and provides the first empirical evidence of the efficacy of innovation and financial resilience on financial institutions survival. The auditing profession could consider more seriously the innovation activities and financial resilience of financial institutions in their test for the going concern assumption of such firms.Item The impact of financial management practices and competitive advantage on the loan performance of MFIs(International Journal of Social Economics, 2017) Korutaro Nkundabanyanga, Stephen; Akankunda, Brendah; Nalukenge, IreneThe purpose of this paper is to study the impact of financial management practices and competitive advantage on loan performance of microfinance institutions (MFIs). Design/methodology/approach – In this cross-sectional study, the authors surveyed 70 MFIs in Kampala, Uganda. The authors applied principal component analysis to reduce the number of factors and identify the important elements that capture financial management practices, competitive advantage and loan performance of MFIs. The authors put forward and tested three hypotheses relating to the significance of the relationship between these three variables of MFIs using the statistical software package, SPSS and also apply the normal theory approach developed by Sobel (1982) and Baron and Kenny (1986) in testing the mediation by competitive advantage. Findings – Robust financial management practices are associated with better loan performance of MFIs. Results also reveal a significant positive relationship between the competitive advantage of the MFIs and their loan performance. Furthermore, a significant positive relationship between competitive advantage and loan performance is found. Moreover results also show a full mediation effect of competitive advantage on the association of financial management practices and loan performance, implying that the association of financial management practices of the MFIs on their loan performance is entirely through their competitive advantage. Research limitations/implications – Although there is plenty of literature on loan performance, financial management practices and competitive advantage, there is scarce literature on their effective conceptualization. This together with the imprecise definition of competitive advantage may have affected conceptualization of the authors study. Thus, in this study, the authors do not claim highly refined measurement concepts. Moreover, many of the extant studies for instance have measured loan performance quantitatively, yet process factors which are inherently qualitative in nature can better explain variances in loan performance concept. More research is therefore needed to better refine qualitative concepts used in this study. Practical implications – Efforts by the MFIs management to improve loan performance must be matched with adoption of financial management practices that provide MFIs with sustained competitive advantage over their rivals. Originality/value – In order to explain loan performance of MFIs, and drawing from social economics, management and accounting strands, this study shows that assessing the role of competitive advantage in the relationship between financial management practices and loan performance is imperative. Also, many of the extant studies have measured loan performance quantitatively, yet process factors or antecedents which are inherently qualitative in nature can better explain variances in loan performance concept. Thus this study calls for the refinement of loan performance concept and accounting for endogeneity.Item Internal audit function, audit committee effectiveness and accountability in the Ugandan statutory corporations(Journal of Financial Reporting and Accounting, 2018) Bananuka, Juma; Korutaro Nkundabanyanga, Stephen; Nalukenge, Irene; Kaawaase, TwahaThe purpose of this study is to investigate the contribution of internal audit function and audit committee effectiveness on accountability in statutory corporations (SCs). Design/methodology/approach – This study is cross sectional and correlational. Data have been collected through a questionnaire survey of 52 SCs in Uganda through their Chief Internal Auditors and Chief Finance Officers. Data have been analysed using Statistical Package for Social Sciences. Findings – The internal audit function significantly contributes to accountability of SCs in Uganda and audit committee effectiveness is not where effective internal audit is present in such organisations. However, audit committee effectiveness significantly contributes to accountability when an internal audit function is not present. Research limitations/implications – The use of hierarchical regression is prone to problems associated with sampling error. However, the likelihood of these problems is mitigated by the interface with data. Originality/value – Whereas hitherto both internal audit function and audit committee effectiveness had been viewed as explanations of accountability, this study only confirms the internal audit function as a significant predictor of SCs’ accountability relative to audit committee effectiveness.Item Internal audit quality, punitive measures and accountability in Ugandan statutory corporations(Journal of Economic and Administrative Sciences, 2021) Nalukenge, Irene; Kigongo Kaawaase, Twaha; Bananuka, Juma; Ogwal, Peter F.This study aims to (1) examine the contribution of internal audit quality, punitive measures to accountability in statutory corporations in developing countries such as Uganda and (2) test whether internal audit quality mediates the relationship between punitive measures and accountability in Uganda’s statutory corporations. Design/methodology/approach – This study is cross-sectional and correlational. Data were collected through a questionnaire survey conducted for 82 statutory corporations. The study’s unit of analysis was a statutory corporation. Chief Internal Auditors and Chief Finance Officers were the study’s unit of inquiry. Data were analyzed through correlation coefficients and linear regression using Statistical Package for Social Sciences. Findings – The results suggest that internal audit quality and punitive measures independently predict accountability. However, punitive measures do not predict accountability in the presence of internal audit quality. Results further indicate that internal audit quality mediates the relationship between punitive measures and accountability in Uganda’s statutory corporations. Originality/value – This study confirms internal audit quality (a preventive measure) as a significant predictor of accountability in statutory corporations relative to punitive measures. To achieve accountability, more emphasis thus needs to be put on preventive mechanisms than on punitive mechanisms. This study also enhances our understanding of the relationship between punitive measures, internal audit quality and accountability. In this study, we arrive at new evidence on the mediating role of internal audit quality in the relationship between punitive measures and accountability in Uganda’s statutory corporations.Item Lending terms, financial literacy and formal credit accessibility(International Journal of Social Economics, 2014) Korutaro Nkundabanyanga, Stephen; Kasozi, Denis; Nalukenge, Irene; Tauringana, VenancioThe purpose of this paper is to investigate the relationship between commercial bank lending terms, financial literacy and access to formal credit by small and medium enterprises (SMEs). Design/methodology/approach – In this cross-sectional study, the authors surveyed 384 business owners or managers of SMEs in Uganda. The authors applied confirmatory factor analysis to reduce the number of factors and identify the important elements that capture commercial lending terms, financial literacy and access to formal credit. The authors put forward and tested two hypotheses relating to the significance of the relationship between perceived commercial bank lending terms, financial literacy and access to formal credit using structural equation modelling with analysis of moment structures 18. Findings – The results suggest a positive and significant relationship between perceived commercial bank lending terms, financial literacy and access to formal credit. Moreover, the ANOVA results serendipitously show that access to formal credit varies with type of business and turnover. However, collateral and loan repayment periods are not observed variables for commercial bank lending terms. The most significant observed variable for commercial bank lending terms is interest rates. This, together with financial literacy, explains 31 per cent of the variances in access to formal credit by SMEs in Uganda. Research limitations/implications – The study is limited to the SME firms registered and operating in Kampala, Uganda and it is possible that the results are only applicable to these firms in Uganda. Nevertheless, the findings have implications to commercial banks wishing to improve the turnover of their micro-lending schemes. Practical implications – Efforts by the stakeholders to improve financial literacy of SMEs owners and managers must be matched with favourable interest rates if access to formal credit is to be enhanced. Social implications – The findings also have implications for governments aiming at improving access to finance to overcome income inequality problems, and also improve their growth. Originality/value – The results provide initial evidence of the aggregate explanatory power of interest rates and financial literacy for the criterion variable, access to formal credit by SMEs.Item Literacy, external user-pressure and quality of accounting information of Ugandan SMES(Emerald Insight, 2015) Nalukenge, Irene; Nkundabanyanga, Stephen K.; Tauringana, VenancioPurpose – The overall purpose of this study is to investigate whether literacy levels and external user-pressure by the Uganda Revenue Authority affect the perceived quality of accounting information of Ugandan SMEs. Design/methodology/approach – A postal questionnaire survey of 98 SMEs drawn from Kampala, Uganda was undertaken. Ordinary Least Squares (OLS) regression was used to determine whether literacy levels and external user-pressure affect the quality of accounting information controlling for firm size, accounting qualification and firm age. Findings – The findings suggest that literacy levels and external userpressure influence the perceived quality of accounting information. Accounting qualification and firm age were also found to be positively associated with the quality of accounting information. However, there is no significant relationship between firm size and quality of accounting information. Originality/value – The study provides evidence of the effect of literacy and external user-pressure on the quality of accounting information in a developing country where such evidence does not currently exist. Implications – Since accounting information is important for economic growth, the Ugandan government needs to spend more resources to improve the literacy especially among the SMEs. The Uganda Revenue Authority also needs to maintain pressure on SMEs to improve the quality of information provided by SMEs since such information is important for assessing tax payable.Item Perceived Internal Audit Roles and Challenges in a developing economy(Makerere Business Journal, 2017) Bananuka, Juma; Mukyala, Veronica; Nalukenge, IreneThe 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.Item Sustainability Practices among Manufacturing Firms in Uganda: An Overview of Challenges and Opportunities(Advances in Research, 2022) Alinda, Kassim; Tumwine, Sulait; Kaawaase, Twaha; Navrud, Ståle; Nalukenge, Irene; Sserwanga, ArthurThe aim of this paper is to provide an in-depth exploration of the opportunities and challenges towards the uptake of sustainability practices (SPs) among manufacturing firms in Uganda. SPs are among the notable solutions in overcoming the challenges facing the global environment, society as well as prosperity for all. The paper utilized a qualitative research design following a review approach of relevant scientific, technical as well as government policy papers. From the review, enforcement of the available environmental laws and policies, customer’s awareness, technological innovation, organisational culture and strict governance, emerge as key drivers towards the uptake of SPs in this country. However, weak legislations and enforcement in some instances, lack of sufficient resources to invest in new technologies, high costs of financing, organisational culture, and limited awareness emerge as the main challenges facing the uptake of SPs. Furthermore, our study provides policy implications that could mitigate the challenges identified especially in a least developed country, Uganda.Item Tax compliance of small and medium enterprises: a developing country perspective(Journal of Financial Regulation and Compliance, 2017) Musimenta, Doreen; Korutaro Nkundabanyanga, Stephen; Muhwezi, Moses; Akankunda, Brenda; Nalukenge, IreneThe purpose of this paper is to establish the relationship between tax fairness, isomorphic forces, strategic responses and tax compliance in Ugandan small and medium enterprises (SMEs). Design/methodology/approach – This is a correlational and cross-sectional study using two respondent types, the demand (represented by the tax collecting body respondents) and supply (represented by SME respondents) sides of tax compliance, to examine perceived tax compliance in Uganda’s SMEs. Findings – Tax fairness, isomorphic forces and strategic responses have a predictive force on tax compliance. Significant mediation effects of tax fairness and also strategic responses are found. The two respondent types perceive the study variables differently – providing an understanding of why the tax compliance puzzle has remained a burgeoning concern. For example, the tax-collecting body respondents perceived more tax fairness than SME respondents, suggesting that perceived tax fairness depends on whose “lenses” you look through. Research limitations/implications – Rather than focussing only on the importance of the rational analytical deliberation of tax fairness by taxpayers in influencing their tax compliance, the current paper shows that in addition, isomorphic forces and strategic responses establish the basis for understanding taxpayers’ compliance. Originality/value – The methodology that enlists two respondent types, i.e. the supply side of tax compliance and the demand side of tax compliance, probably offers a unique way of deriving better results than previous studies.