Integrated financial management system and financial reporting in selected commercial banks in Bujumbura, Burundi
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Date
2019-09
Authors
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Publisher
Kampala International University, College of Economics and Management
Abstract
The quality and standard of financial reporting among Burundian commercial banks do not match the international standard of reporting in the banking sector of more developed countries. The purpose of this study was to determine the effect of integrated financial management system on financial reporting in selected commercial banks in Bujumbura, Burundi. This study was guided by the following objectives:i) to determine the effect of cash management on the financial reporting of selected commercial banks in Bujumbura, Burundi; ii) to determine the effect of budgeting on the financial reporting of selected commercial banks in Bujumbura, Burundi; and iii) to determine the effect of accounting system on the financial reporting of selected commercial banks in Bujumbura, Burundi. The study adopted a cross-sectional survey design. The target population of 153 included the technical employees of the selected commercial banks in Bujumbura. The sample size of 111 was arrived at using Slovene’s formula. Questionnaire and document review were the main research instruments. Data was analyzed using frequency and percentage distribution tables, mean and standard deviations, and linear regression analysis. In order to test validity, the study used face validity, content validity, and normality test. In order to test reliability, the study used test-retest and internal consistency methods. The study revealed that cash management significantly affect the financial reporting of commercial banks (Adjusted R2=0.562, p=0.000). Furthermore, the study revealed that budgeting significantly affect the financial reporting of commercial banks Adjusted R2=0.439, p=0.000). In addition, the study found that accounting system significantly affect the financial reporting of commercial banks (Adjusted R2=0.612, p=0.000). The study concluded that IFMS influences financial reporting. The study recommended that the management of the banking industry should involve all the stakeholders in the development of cash management framework that is used in the planning, implementation, auditing, supervision, monitoring and maintenance of the IFMS to streamline all roles and responsibilities of all the users of the system so that no cash is mismanaged. Furthermore, the study recommended that the management of the banking industry should promote efficient and clear budgeting by incorporating it with the IFMS. In addition, the study recommended that commercial banks should adhere to strict IFMS guidelines such as payment terms, credit limit, and automatic voucher number. Similarly, the study recommended that the management of the banking industry should ensure that IFMS easily adapts to the changes in cash management, budgeting and accounting system practices without complete overhaul of the system so as to ensure efficient and timely financial reporting. The current study added to the body of knowledge that IFMS in terms of cash management, budgeting and accounting system are synonymous in ensuring clear and quality financial report.
Description
A thesis submitted to the College of Economics and Management in partial fulfillment of the requirements for the Award of Master’s Degree in Finance and Accounting of Kampala International University, Kampala Uganda
Keywords
Integrated financial management, Financial reporting, Commercial banks, Bujumbura, Burundi