Abstract

PurposeThe purpose of this study is to establish the relationship between corporate governance attributes (board expertise, board independence and board role performance), internal audit quality and financial reporting quality using evidence from Uganda's financial institutions.Design/methodology/approachThis study research design is cross sectional and correlational. The study used a questionnaire survey of Chief Finance Officers, Senior Accountants and Internal audit managers of financial institutions in Uganda. Data were analyzed with the help of Statistical Package for Social Sciences.FindingsResults indicate that board expertise and board role performance are significantly associated with financial reporting quality. Also, internal audit quality is significantly associated with financial reporting quality. Board independence is not a significant predictor of financial reporting quality.Originality/valueThis paper provides insights of what matters for financial reporting quality in Uganda's financial reporting quality. It uses the qualitative characteristics of financial statements to measure financial reporting quality. This paper focuses mainly on the conceptual framework developed by the International Accounting Standards Board.

Highlights

  • The conceptual framework of 2018 clearly explains that the objective of financial reporting is to provide financial information that is useful to users in making decisions

  • Summary and conclusion This study aimed to establish the relationship between corporate governance, internal audit quality and financial reporting quality based on evidence from Uganda

  • This objective was achieved through a questionnaire survey of 45 financial institutions where the Chief Finance Officers, Senior Accountants and Internal Audit managers were the unit of inquiry

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Summary

Introduction

The conceptual framework of 2018 clearly explains that the objective of financial reporting is to provide financial information that is useful to users in making decisions. Information in the financial reports ought to be faithfully represented, relevant, understandable, comparable, timely and verifiable. Financial reporting quality is helpful in making decisions regarding resource allocation in the organization (International Accounting Standards Board, IASB, 2013). The financial information users make decisions on prospects for future net cash inflows to the entity and management’s stewardship of the entity’s economic resources (IFRS, 2020). Financial reporting quality is of concern globally to all stakeholders such as shareholders, lenders and suppliers among others

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