chapter one 1.0 introduction 1.1 background of the study · 1 oloya andrew richard reg no:...
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1 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
Chapter one
1.0 INTRODUCTION
This chapter presents the background of the study, statement of the problem, objectives
of the study, research questions, scope of the study and the significance of the study
1.1 BACKGROUND OF THE STUDY
Record keeping can be defined as a day to day recording of events correctly into the
books of accounts and accurately manipulating them to produce accurate and consistent
financial statements (Panday, 1998). Omunuk (1999) looks at recordkeeping as a record
making process of accounting. It is a subset or a component of accounting. It includes the
preparation of books of accounts such as the cash books and ledgers. A good record
keeping system is characterized by the following steps: identifying whether the
transaction has occurred, preparing source documents e.g. receipts, invoices, Analyzing
and classifying transactions, recording transactions into appropriate journals, posting
details in the Journals into general ledgers and finally extraction of the trial balance.
Quality financial reports are statements that are prepared to communicate financial
information to influence decision of users of accounts and such reports posses certain
desirable qualities, particularly the report must be relevant, understandable, timely and
consistent (Clarke 1998). Nkundabanyanga (2004) defines the Quality of financial reports
as an extent to which the information provided in the financial statements is useful to
users. The principle characteristics of quality financial reports include: understandability,
relevancy, reliability, compatibility, timely, materiality, prudency, verifiability, substance
over form, and faithful presentation.
According to the report by Uganda cooperative savings and credit union, (2009), Koch
Goma SACCO was experiencing a number of problems in keeping proper records of
accounts which include lack of qualified staff, single entry record keeping system, lack of
required documents and this is evidenced in the lack of accurate, consistent, timely and
reliable information presented in the financial statemnts thus failing to the objective of
having quality financial reports, the SACCO has taken considerable time and effort to
establish an efficient accounting system by recruiting new staff in the accounting
2 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
department, equip the departmental staff with computerized accounting packages and
skills of using these packages.
Despite all these efforts, the problem still persists and this may be as result of poor record
keeping, unqualified staff or lack of knowledge of the generally acceptable accounting
principles, international financial reporting standards and the company act. The main
determinant of poor quality financial reports was determined in the findings of this
research report.
1.2 Statement of the problem
Koch goma SACCO has persistently produced low quality financial reports (audited
financial report, 2009) .UCSCU has tried to alleviate the problem at hand by training staff
and computerizing the accounting system. Despite these efforts, the quality of financial
statements has remained low. The probable cause could be poor record keeping and it is
still unknown, whether this is as a result of incomplete records or some other factor. If the
situation stays like this, the cooperative will fail secure credit from government and also
savings from the members and this could culminate into a financial distress with all its
consequences.
1.3 Purpose of the study
The purpose of the study was to examine the relationship between record keeping and
quality of financial reports.
1.4 Objectives of the study.
The objective of the study was:
a. To assess the record keeping system of Koch goma SACCO.
b. To establish the quality of financial reports of Koch goma SACCO.
c. To establish a relationship between record keeping and quality financial reports.
3 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
1.5 Research questions
The research questions are:
a. How is the record keeping at Koch goma SACCO?
b. What are the qualities of financial reports in Koch goma SACCO?
c. What is the relationship between the record keeping and quality of financial
reports?
1.6 Scope of the study
1.6.1 Geographical scope
The research was carried out in the premises of Koch goma SACCO in the department of
accounts, auditing, human resource, marketing, procurement, and management from their
offices in Koch goma, Koch goma sub county, Nwoya district.
1.6.2 Conceptual scope
This study was concerned with record-keeping as the independent variable with components
such as identifying occurance of a transaction, preparation source documents e.g. receipts,
invoices, Analysis and classification of transactions, recording of transactions into
appropriate journals, posting details in the Journals into general ledgers and finally extraction
of the trial balance and quality of financial reports as the dependent variable with
components such as understandability, relevance, reliability and compatibility as desirable
qualities of a good financial report.
1.7 Significance of the study
i. The study was to highlight issues that are lacking in the record keeping system of
Koch goma SACCO and will guide management in improving on financial reporting.
ii. The study was to help the researcher understand better record keeping in relation to
quality financial reports.
iii. The study was to assist other cooperative societies to understand more about record
keeping and quality of financial reports. The study was also to assist in improving the
record keeping systems of these other cooperatives.
4 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
Chapter two
Literature Review
2.0 Introduction
In this chapter, the related literature is reviewed as provided by different authors
concerning the various aspects of financial reports and record keeping system such as
definition of record keeping system, documents and Records of record keeping, definition
of quality financial reports and characteristics of quality of financial reports.
2.1 RECORD KEEPING
Record keeping is defined as the art and science of recording, classifying and
summarizing financial transaction of a business in the books of accounts (Omunuk,
1999). In this context record keeping is the record-making phase of accounting concerned
with the production of documentary evidence and recording of transactions in the
journals, cashbooks, and ledgers plus the extraction of the trial balance. However, Baston
(1986) views record keeping as an art, but not a science and it is concerned with the
recording the financial transactions of a business, or individuals, in terms of money in a
set of books in order to obtain necessary information when required. This definition
reveals that record keeping is an art but not science; it is concerned with recording
financial transactions only in terms of money and its objectives is to provide information
about the conduct and status of the business. In other precise terms, record keeping is the
process of entering details of transactions in the books of accounts with a view to fulfill
business objectives (Mill Champ, 1997). As the process, record keeping ensures that as
soon as a transaction occurs, its properly documented and entered in the proper accounts;
and this is done on a daily basis. At the year-end, adjustments are made on accounts prior
to the production of financial statements. However, the Institute of Certified Public
Accountants, best defines Record Keeping as the art of recording, classifying and
summarizing in significant manner and in terms of money transactions and events that
are, in part at least, financial character in the books of accounts.
5 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
2.2 Record keeping system
A record keeping system is defined as a set of related components that records and keeps
track of business transactions from the stage of occurrence to the point of extraction of
the trial balance (Grabutt, 1969). In this context, the components of a record keeping
system include book keepers, managers, methods, procedures, software and facilities that
play a role in recording of business transaction in books of accounts and generation of
financial information used in preparation of financial reports. These methods are the
means of implementing the record keeping system and are classified into single and
double entry method. Whereas double entry system records the dual aspect of
transactions, single entry methods record a single aspect of the transaction. In another
angle, warren, (1993) believes that record keeping system refers to the ledgers and
journals of record keeping together with operation rules of Debit and Credit. He says that
the function of record keeping system is to provide management with information
efficiently, quickly and accurately whilst at the same time minimizing the cost of
operating the system and guarding against the possibility of theft or fraud. In another
perspective, record keeping system is a set of components that collects, classifies,
processes and summarizes business transactions in the books of accounts. The system
may be manual or computerized (Romney, 2003) with the computerized record keeping
system; flexibility can be achieved particularly where enterprise resource system is used
by organizations that have high volumes of transactions. Romney further connotes that
the functioning of any record keeping system heavily relies on the way management
addresses factors in the business control environment like; commitment to integrity and
ethical values, organizations structures, forming audit committees of the board of
directors, improving methods of assigning authority and responsibility and good resource
policies. However, Kibera, (1996), contents that record keeping system is a system of
documenting, recording and processing the transactions of business in the books of
accounts. He concurs with other scholars that the nature and type of the business records
and its recording system will greatly influence the quality of their financial reports
especially by adhering to, or ignoring procedures and accounting principles in
establishing what transactions to be recorded, how they are to be recorded and what to be
recorded. It is also argued that a good record keeping system is not only important in
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Sustaining business but also aids organizations to safeguard against the risks of hitting
cash flow crunches, wasting of money and missing out on the opportunities to expand
(Lumumba, 1998).
2.3 Types of Record Keeping System
2.3.1 Tabular/column system
This is a method of record keeping in which the items are subjected to continuous
analysis or classification, thereby saving the trouble of periodic dissection and
summaries. A “total” column is provided so that arithmetical accuracy of the analysis can
be verified by means of cross casting. It is particularly suitable where transactions are of
regular type and frequent in occurrence. This system can be used in departmental
accounts, branch accounts, and investment by utilizing records such as cost ledgers,
stores ledgers and bills receivable ledgers. This system is reliable in that it is simple to
apply, it can be adapted to almost any books of accounts, whether a books of account or a
statistical books; it economizes time and saves labour (Garbutt, 1969). However,
limitation with this system is that the books required to carry it out are often of unwieldy
dimensions and thus are liable to errors.
2.3.2 Slip system.
This is a system that records transaction usually entered in subsidiary books on loose
sheets of paper. The slip system avoids the constant recording of transactions in the
books of original entry and the copying of transactions in the ledger particular with the
ordinary system. The books utilized for slip system include slip daybooks, and slip
ledgers (Clarke, 1998). This slip system has been adopted by banks for many years. The
advantages of a slip system include; saving of time and labour, as it reduces the number
of subsidiary books, minimizing risk of error as much copying into intermediate books is
dispensed, affords prompt posting of ledgers and providing ready reference from the
original slips (Brookson, 2001).
7 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
However, this system is not very appropriate to saving and credit societies companies
owing to the nature of their operations that require incorporating activities at the office
with activities at field located far away from offices.
2.3.3 Manual accounting system
The manual system of record keeping uses special journal to streamline the journalizing
and posting processes. This system handles large volume of transactions rapidly and
efficiently, it is helpful to classifying transactions and using special journal for each class.
In this system, the majority of transactions usually fall into sales of merchandise on
credit, purchase of merchandise on credit, receipts of cash and payments of cash
(Matulich, 1990). According to Lumumba, (1998), the manual system can produce
reliable accounting information if organizations put in place policies and procedures for
maintaining properly accounts books like cash book, journals and ledgers.
2.3.4 Dual system
This is a system that uses a fax machine and central computer. The system connects up
the fax machine in the branch office to the central computer in the head office via a
modem/fax linkup. The hand filled standard forms are faxed to this central computer
where an optical character reader engine translates the faxed hand writing images into
computer readable data. This system is required to incorporate branch personnel with
insufficient computer skills in fast transmission of field data to head office for further
processing (Kizza, 2000).
This system cannot be adapted by saving and Credit society companies in Uganda at the
moment due to the fact that most SACCOS branches are located in rural areas which are
still lacking telecommunication facilities.
2.3.5 Computerized systems
This system of record keeping utilizes information technology to ease tedious keeping of
records and laborious storage of information. Recommended software for large scale
SACCO is Quick books accounting package (Kizza, 1998). This soft ware integrates the
SACCOS business process into a single process, which accords easy management of
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contracts, sub contracts, orders, budgets and daily events. However, the use of
information technology in SACCO‟s branches is still low despite the availability of many
computer software for such applications (Madoi, 2003). With the computer systems, data
from the manual generated source document are entered into punched cords or magnetic
devices, which can be read by the computer. This computer information processed
performs routine tasks, like printing journals. This system is highly reliable and the
possibility of errors caused by the hardware is small.
However, micro finance companies in Uganda are still adapting to computers and their
systems are normally partly computerized; implying that these systems are still
vulnerable to manipulations by dishonest record keeping staffs.
2.4 DOCUMENTS USED IN RECORD KEEPING
2.4.1 Receipts
This is a document prepared to show evidence of money received (Omunuk, 1999).
However, Saleemi (1969), Substantiates that a receipt should be printed, having
counterfoil, or carbon copy and should be consecutively numbered. He further connotes
that whereas unused receipts are kept under lock, spoiled ones should be cancelled and
not detached from the counterfoil. He stresses that no blank counterfoil should be
accepted. In English speaking countries the term most frequently applies to the printed
record given to a consumer at checkout that lists the purchases made, the total amount of
the transaction including taxes, discounts and other adjustments, the amount paid and the
method of payment. Increasingly, these receipts may also include messages from the
retailer, warranty or return details, special offers, advertisements or coupons. Receipts
may also be provided for non-retail operations such as banking transactions. A receipt is
a legal document. In many countries, notably Uganda, it is mandatory by law for retailers
and individuals to show receipts of their transactions to the tax authorities and auditors
(Madoi, 2003).
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2.4.2 Voucher
A voucher is documentary evidence in support of a transaction in the books of accounts
(Saleemi, 1969). Within this context, the act of establishing the accuracy and authenticity
of entries in the books of account is called vouching. He argues that the essence of the
vouches is to substantiate an entry in the books of account with any documentary
evidence such as agreement, receipts, and counterfoils and also see that the transaction
has been authorized. A voucher is a bond which is worth a certain monetary value and
which may be spent only for specific reasons or on specific goods. Examples include (but
are not limited to) housing, travel, and food vouchers. The term voucher is also a
synonym for receipt and is often used to refer to receipts used as evidence of, for
example, the declaration that a service has been performed or that expenditure has been
made. (Kizza, 2000)
2.4.2 Invoice
This is a document submitted by suppliers demanding payments for goods and services
that they have supplied on credit (Baston, 1986). He argues that an invoice provides
information to the buyer about the cost of the goods, trade discount and net amount
owing. However, Omunuk (1999) refers to an invoice as a document submitted by
suppliers demanding payments for goods supplied that they had provided on credit and it
is normally reconciled with other documents such as delivery notes, local purchase order
before it is paid. An invoice or bill is a commercial document issued by a seller to the
buyer, indicating the products, quantities, and agreed prices for products or services the
seller has provided the buyer. An invoice indicates that the buyer must pay the seller
according to the payment terms. The buyer has a maximum amount of days to pay these
goods and are sometimes offered a discount if paid before. In the rental industry, an
invoice must include a specific reference to the duration of the time being billed, so rather
than quantity, price and discount the invoicing amount is based on quantity, price,
discount and duration. Generally speaking each line of a rental invoice will refer to the
actual hours, days, weeks, months, etc being billed (Kizza, 2000).
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2.5 RECORD KEEPING RECORDS
2.5.1 Cash book
The cashbook is the book of original entry in which cash and cheque transactions are
entered (Omunuk, 1999). He contents that the cash book is a journal book with Debit and
Credit sides used to record cash receipts and cash payments respectively. However,
Garbutt (1969) contents that cashbook is merely a part of the ledger and it consists of
Cash and Bank accounts taken out of the ledger and bound separately for greater
convenience. Cashbooks are simple accounting books that are used to record basic
information about cash receipts and payments. Once available in hard copy form only,
cashbooks are often included in different types of money management software.
Providing an easy way of keeping up with how much money is coming in and what bills
are getting paid, the cashbook can be effectively utilized by just about anyone (Kizza,
2000).
2.5.2 Ledger
Omunuk (1999), defines a ledger as a book of accounts, and if the accounts are kept in
the books it‟s referred to as a ledger books. If on the other hand it‟s kept on cards in a file
try, the tray of cards is a ledger. He is also of the same view with other authors that for
bigger organizations the general ledger may be subdivided into general ledgers that
contain major control accounts and subsidiary ledgers in the form of sales ledger,
purchases ledger, private ledger and the cash book. A ledger is the principal book or
computer file for recording and totaling monetary transactions by account, with debits
and credits in separate columns and a beginning balance and ending balance for each
account. The ledger is a permanent summary of all amounts entered in supporting
journals, which list individual transactions by date. Every transaction flows from a
journal to one or more ledgers. A company's financial statements are generated from
summary totals in the ledgers.
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2.5.3 Journals
A Journal is books of original entry or prime entry in which transactions are recorded
before being posted to the ledgers (Omunuk 1999). He elaborates that journals are
prepared from source documents such as invoices and vouchers through a process known
as journalizing. Similarly, Baston, (1986) refers to journals as books of prime entry with
essential information consisting of date, the name of the account to be debited or credited,
the amount of money and a brief explanation of the transactions. A Journal is a book or
computer file in which monetary transactions are entered the first time they are
processed. This journal lists transactions in chronological sequence by date prior to a
transfer of the same transactions to a ledger in the process of record keeping.
2.5.4 Trail Balance
The trial balance lists and summarizes all the general ledger account balances to ensure
that the total of the debit balances equals the total of the credit balances (Lumumba,
1998). The sum total is not meaningful. The important thing is simply that the totals of
both columns (debits and credits) agree. A balanced trial balance ensures that there were
no recording errors. However, it does not guarantee that the amounts are correct. (I.e. the
right amounts may have been posted to the wrong accounts). Correct the discrepancies
identified from trial balance if required. Calculate and make adjusting entries in the
journals. Adjusting entries need to be made at the end of each accounting period to match
the revenue earned in that period with the expenses incurred in earning it. These
adjustments are called accruals and deferred items in accrual accounting. These entries
are also journalized and posted to the general ledger. The source document used to record
adjusting entries is typically a 10 column worksheet.
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2.6 QUALITY FINANCIAL REPORTS
2.6.1 Definition of the quality of financial reports
Brookson, (2001) defines quality financial reports as statements prepared to the required
accounting financial reporting standards to show the financial position of the business at
the end of time period and also the operating results by which the business arrived at this
financial position. He is of view that accountants rely on record keeping systems,
particularly, double entry to produce meaningful financial statements that summarize
both the past and current financial positions of an organization. However, Clarke, (1998)
defines quality reports as statements that are prepared to communicate financial
information to influence decisions of users of accounts and such reports posses certain
desirable qualities, particularly, the report must be relevant, understandable, timely,
consistent, reliable, verifiable, complete, and comparable. He agrees with Brookson that;
underlying the preparation of financial statements in the record keeping system and
accounting processes within the enterprise. He argues that without records, financial
reports cannot be prepared. Quality financial reports are annual financial statements that
fairly present the state of affairs of the company as at the financial year and its profit and
loss for that year in conformity with generally accepted accounting practice (Kizza,
2000). In other precise words, wood (1999) defines Quality reports as financial
statements that present fairly the state of affairs of the business and its activities for the
year end and provide useful information to users of accounts. In this context the financial
statements prepared by business include: income statement which shows the income less
expense over the year, the balance sheet which shows the financial position of the
organization at a particular date in respect of the Assets, Liabilities and Equity. Other
financial statement that are required to be fairly presented include; Cash flow statements
that show the cash inflow and outflows of the business for the period, the Notes to the
accounts and reports in reconciliation on movements in the shareholders funds.
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2.7 CHARACTERISTICS OF THE QUALITY OF FINANCIAL STATEMENTS
2.7.1 Relevance
Relevance refers to the fact that accounting information must relate to the decisions being
taken. Information has the quality of relevance when it influences the economic decision
of the users by helping them evaluate past, present or future economic events (Clarke,
1998). Blanchet, (2004) believes that for information to be relevant, it should be timely.
Information is said to be relevant if it influences the decisions. To be relevant,
information must be available in time, must help in prediction, and help in feedback
(Kizza, 2000). Information that is not relevant in a particular context is not useful. Since
the purpose of financial reports is to provide information about the entity's performance,
financial position, cash flows and changes in equity, it follows that only information
pertinent to those should be included in the financial statements. Determination of
relevance is also affected by the nature of information and its materiality (whether it can
influence the economic decisions of users (Kizza, 2000).
2.7.2 Understandability
Financial reports should present accounting information in such a way that it would be
comprehensive to the less informed users of accounts without omitting information which
would be of value or material to the informed user (Brookson, 2001). Understandability
is referred to, when the quality of information enables users to comprehend their meaning
(IASB, 2008). Understandability is measured using five items that emphasize the
transparency and clearness of the information presented in annual reports (Blanchet,
2000).
First, Classified and characterized information refers to how well-organized the
information is presented. If the annual report is well organized it is easier to understand
where to search for specific information (Jonas, 2000). Further more disclosure
information, and in particular the notes to the balance sheet and income statement, may
be valuable in terms of explaining and providing more insight into earnings figures
(Beretta, 2004). Especially narrative explanations help to increase the understandability
of information (IASB, 2006). Additionally, the presence of tubular or graphic formats
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may improve understandability by clarifying relationships and ensuring conciseness
(IASB, 2006; Blanchet, 2000). Moreover, the preparer of the annual report combines
words and sentences that are easy to understand, the reader will be more likely to
understand the context as well (Courtis, 2005). If Technical jargon is unavoidable, for
instance industry related jargon; an explanation in a glossary may increase the
understandability of the information.
2.7.3 Reliability
Information contained in financial reports should represent the events it purports to
represent (Wood, 1999). Information is said to be reliable if it is free from error and bias
and faithfully represents what it seeks to represent. Information must be believed and
depended upon by the users for a given purpose. To ensure that information is reliable, it
must be verifiable, neutral and faithful in representing the economic condition
(Lumumba, 1998). Reliability, in the context of financial statements, refers to
information being free from material error and bias. Material errors refer to those that can
influence the economic decisions of information users. The characteristic of neutrality
also dictates that information is financial statements should be free from bias. Presenting
information in a manner that is designed to contrive an outcome or influence users in a
certain way is no longer neutral, regardless of whether it is verified by an external party
or not. (Lumumba, 1998).
2.7.4 Verifiability
Verifiability implies similar measures by different measurers. As a component of
verifiability, FASB ought to include auditability. If an external auditor cannot audit
something, it is hardly verifiable. More importantly, the audit function must be
strengthened for financial reports to have integrity; FASB can play a role in strengthening
the audit function by not issuing reporting requirements that involve measures that cannot
be audited. (FASB, 2009)
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2.7.4 Completeness
The information in financial reports must be complete, with reason. Omission could
cause information to be false or misleading and thus unrealistic and irrelevant
(Nkundabanyanga, 2004). Completeness complements the reliability of financial reports,
since omission of material information can mislead users. However, information should
only be complete once it is relevant and within the restrictions of materiality, timeliness
and cost. The accounting convention of full disclosure implies that accounts should make
a full disclosure of all monetary or financial information that can impact decision making
of different parties. This accounting information is of interest to the management, current
and potential investors and current and potential creditors of the business.
2.7.5 Consistency of preparation
Financial Reports need to be prepared on a consistent basis so as to allow meaningful
comparison between performance in different time periods and performance between
companies (Clark, 1978). The convention of consistency means that same accounting
principles should be used for preparing financial statements for different periods. It
enables the management to draw important conclusions regarding the working of the
concern over a longer period. It allows a comparison in the performance of different
periods. If different accounting procedures and processes are used for preparing financial
statements of different years then the results will not be comparable because these will be
based on different postulates or policies. The concept of consistency does not mean that
no change should be made in accounting procedures. There should always be a scope for
improvement but the changes should be notified in the statements. The impact of changes
of procedures should be clearly stated. It will enable the readers to analyze information
according to new procedures. In the absence of any information regarding the change, it
will be presumed that old methods have been used this time also. Whenever, consistency
is not followed this fact may be fully disclosed. For example, if a change in the method of
charging depreciation is made or a change is made in the method of allocating overhead
expenses to different products, a foot note to the financial statements should be given
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indicating the extent of change. If possible, net monetary effect of these changes should
also be given.
2.7.6 Comparability
Comparability is an important characteristic to include in this analysis. Therefore,
"comparability should not be confused with uniformity" and that "an overemphasis on
uniformity may reduce comparability…" I would like to see FASB prove these claims
rather than merely asserting them. In particular, as FASB (and IASB) continues moving
toward principles-based accounting, it should realize the peril that an under-emphasis on
uniformity will likely produce financial reports that are less comparable with one other.
Lease accounting is a great example. Principles-based accounting may well lead one
corporation to capitalizing more leases while another enterprise turns all its leases into
operating leases. Where is the comparability under that scenario? (IASB, 2009)
2.7.7 Substance over form
IASB included substance over form as a component of reliability, but FASB has not
embraced substance over form in this exposure draft. FASB defends its decision by
saying that substance over form is redundant once you admit representational faithfulness
to the conceptual framework. While I agree with the reasoning, I would nonetheless
prefer to add substance over form as a defining element of representational faithfulness.
The discussion becomes more lucid by emphasizing substance over form instead of
ignoring it. (FASB, 2009).
2.7.8 Prudence
Since most financial accounts are created based on accruals and not cash, there is a
degree of uncertainty in anticipating transactions. Prudence, one of the fundamental
assumptions of financial accounting, ensures that assets are not overstated and liabilit ies
understated. However, you must note that prudence does not permit understatement of
assets and overstatement of liabilities either (Lumumba, 1998). According to
Nkundabanyanga (2004) Prudence is an accounting principle that requires the recording
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of expenses and liabilities as soon as possible, but the revenue only when they are
realized or assured.
2.7.9 Faithful representation
Faithful representation states that where there are difficulties or uncertainty in identifying
transactions or measuring certain elements, an entity should avoid identifying it in the
financial statement. Another characteristic, substance over form, dictates that an entity
should account for a transaction according to economic reality as opposed to legal form.
Substance over form supports fair presentation (Lumumba, 1998). According to
Frankwood, (2001), faithful presentation exists when information represents faithfully the
transactions and other events it purports to represent or could reasonably be expected to
represent.
2.7.10 Timeliness
Timeliness means having information available to decision makers before it loses its
capacity to influence decisions (IASB, 2008:40). Timeliness refers to the time it takes to
reveal the information and is related to decision usefulness in general (IASB, 2008).
When examining the quality of information in annual reports, timeliness is measured
using the natural logarisms of amount of days between year end and the signature on the
authors‟ report after year end is calculated. According to frankwood (2001) if there is
undue delay in the reporting of information it may lose its relevance but information
presented too soon may be too uncertain to be reliable. In achieving a balance between
relevance and reliability, the overriding consideration is how best to satisfy the economic
decision making needs of the users.
2.7.11 Materiality
According to Frankwood, (2001) materiality is a concept or convention within auditing
and accounting relating to the importance or significance of an amount, transaction or
discrepancy. The objective of an audit of financial statements is to enable the auditor to
express an opinion whether the financial statements are prepared in all material aspects,
in conformity with an identified financial reporting framework such as generally accepted
18 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
accounting principles (GAAP). The assessment of what is material is a matter of
professional judgment. Blanchet,(2000) states that information is material if its omission
or misstatement could influence the economic decisions of the users taken on basis of the
financial reports. Materiality depends on the size of the item or error judged in the
particular circumstances of its omission or misstatement. Thus, materiality provides a
threshold or cut off point rather than being a primary qualitative characteristic which
information must have if it is to be useful.
2.7.12 Neutrality
According to McMullen (1996) neutrality as a lack of bias must be a characteristic of the
information presented in financial reports. The person preparing those statements
determines much of the information presented in financial statements. This often entails
taking decisions concerning what to include and what to exclude for example, what
allowance to make for doubtful debts. Any such accounting estimates must be neutral,
neither understated nor overstated. Reliability assumes the information being relied on is
neutral with respect to parties potentially affected. In that regard, neutrality is highly
related to the establishment of accounting standards. Changes in accounting standards can
lead to adverse economic consequences to certain companies, their investors and
creditors and other interest groups. Accounting standards should be established with
overall societal goals and specific objectives in mind and should try not to favor
particular groups or companies Landsman (2001).
2.8 RELATIONSHIP BETWEEN RECORD KEEPING AND QUALITY FINANCIAL
STATEMENTS
2.8.1 Quality Financial Statements
If management is to ensure Quality Financial Reporting, it should constantly review and
improve the record keeping systems. Record keeping impacts on the quality of financial
statements in a number of ways denying users of accounts the opportunity to make
rational economic decisions.
19 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
2.8.2 Vouchers and Quality Financial Reports
According to Boston (1996) the accuracy of any entry is verified by the voucher. With in
this context, for any entry to be made in any book of account it has to be supported by the
voucher. Saleemi (1989) also concurs when he defines a voucher as documentary
evidence in support of transactions in the books of accounts. He further contributes that
the voucher is used for authorization of transactions and this is to the effect that the final
accounts prepared from transactions that were properly authorized will be reliable. In this
regard, Saleemi is more elaborate. However, with cooperatives society‟s projects that are
located at branches far away from head office, it is difficult to promptly send vouchers to
head office for entry and authorization. There is need for additional information on how
to best incorporate the vouchers at the branch activities.
According to Guerrire (1993) Quality Financial Statement should have an attribute of
accuracy. With regard to the voucher this attribute is achievable; however, this is only to
the extent that the vouchers are not abused.
2.8.3 Journals and the Quality of Financial Reports
According to bull (1986) a Journal is a chronological record, showing for each
transaction the debit and the credit changes caused in the specific ledger accounts. He
says that the journal reduces the risk of omitting a transaction, the possibility of errors,
and reduces the irregularities or fraud by demanding an external explanation of all
entries. Proper use of journals will thus accord the organization reliable financial reports
as ledgers from which accounts are drawn are fed with only reliable information.
However, Saleemi (1996) while appreciating the usefulness of journals cautions that there
is a lot of committing fraud through journals, for example writing a good debt as a bad
debt and this will lead to the quality of reports generated in this respect to be unreliable as
management „doctor‟ accounts to conceal fraud.
2.8.4 Ledgers and Quality Financial Reports
According to Omunuk (1999) a ledger is a collection of accounts and these accounts are
used to produce financial reports. Incorrect posting of transaction to wrong ledger
20 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
accounts may lead to the production of low quality reports, Failure to classify
transactions, For example Improperly classifying transaction, cultures and practices of
people in different countries, societies or businesses that have contrasting respect to
quality financial reporting.
2.8.5 Trial balance and the quality of financial reports
The trial balance lists and summarizes all the general ledger account balances to ensure
that the total of the debit balances equals the total of the credit balances (Lumumba,
1998). However, it does not guarantee that the amounts are correct. (I.e. the right
amounts may have been posted to the wrong accounts). Correct the discrepancies
identified from trial balance if required. Therefore when the figures in the trial balance
are wrong, then the users of financial statements will not make relevant and reliable
decisions from the statements.
2.9 Conclusions
In conclusion, therefore, record keeping plays an important role in determining the
quality of financial reports. Proper record keeping system ensures that reliable, relevant,
complete, understandable reports are produced by organization. Alongside this literature,
a lot has been presented to ensure that performance of record keeping system is a
prerequisite for quality reports. The control of the business controllable record keeping
environment is fundamental element that organizations can explore to produce quality
reports.
21 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
CHAPTER THREE
METHODOLOGY
3.1 Introduction
This chapter describes the data collection method that was followed in conducting the
study. It is upon the findings of the study that interpretation and recommendations were
based. It gives details regarding research design, population of the study area, sample and
sampling techniques, a description of data collection instruments used, as well as the
techniques that were used to analyze data. It also indicates the problems incurred during
the study.
3.2 Research Design
The nature of the study sought to describe the relationship between record keeping and
the quality of financial reports generated in Koch goma saving and credit society limited.
The study used a descriptive research design that enabled the researcher make an in depth
analysis of the organization.
3.3 Area of the Study
The study was conducted at koch goma saving and credit society limited which is located
in Koch goma sub county, (Nwoya district).
3.4 Population of the Study
The population of the study comprised of the accountants, members of the loan
committee, employee‟s involved in record keeping, employees engaged in accounting,
handling and recording of books of account‟s, members of the board, members of koch
goma SACCO, their bankers and other users of the financial reports.
3.5 Sampling Design
3.5.1 Sampling Method
A stratified random sampling method was used in selecting the respondents from those
areas relevant to the study that is accounting department, management, heads of different
22 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
departments, those in charge of quality financial reports, handling and recording of
figures among others.
3.5.2 Sample size
A sample of 30 respondents was selected from the survey population in three different
strata.
3.5.3 Sampling Procedure
The researcher selected respondents from Koch goma SACCO using a method of
stratified random sampling; random sampling is advantageous because it is free of bias.
The areas of the study included staff in the accounting department, procurement, storage,
handling and recording, which acted as the different strata from where the researcher will
select his/her respondents at random
3.5.4 Purposive Sampling
The researcher focused on the staff and management who are well equipped with the
knowledge of financial reports in the SACCO. These respondents acted as key informants
since they were believed to be more reliable and knowledgeable about the topic under
study and were in a better position to give dependable and detailed information about
record keeping and the quality of financial reports in Koch goma SACCO.
3.6 Data Collection
3.6.1 Sources of Data
Two sources of data were used in this study, (primary and secondary sources). The
primary source provided primary data which was collected by the use of questionnaires
and the secondary source provided data from text books, journals, financial statements
and any other published research that was deemed relevant the study for instance
company documents relating to record keeping and quality of financial reports.
23 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
3.6.2 Data Collection Instruments
The researcher used self-administered questionnaires as an instrument for the collection
of primary data from the respondents. Questionnaires are popular with research because
information can be obtained fairly, easily and the questionnaire responses are easily
coded. Caution was taken in ensuring that short and simply worded questions are used as
instruments when collecting data. Heads of departments and other managerial staff were
interviewed using the same instrument (questionnaire) to ensure that the information
provided by the employees is verifiable and able to be cross checked.
24 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
CHAPTER FOUR
PRESENTATION, INTERPRETATION AND ANALYSIS OF FINDINGS
4.0 Introduction
In this chapter, results of the study are presented and discussed. Findings were done in relation to
study objectives. In presentation of findings tables and frequencies were used to explain the
findings. The study objectives were: to assess the record keeping system of Koch goma SACCO,
to establish the quality of financial statements of Koch goma SACCO and to establish the
relationship between record keeping and quality financial statements
4.1 Back ground information about respondents
Here respondents were asked about their gender, age, academic qualification, and departments in
which they work.
4.1.1 Gender of respondents
In order to avoid bias responses, the researcher obtained a sample of both male and female
respondents as shown below;
Table 1: Gender of respondents
Gender Frequency
Percentage (%) Cumulative
Percentage (%)
Male
19 63.33 63.33
Female 11 36.67 100
Total 30 100 100
Source: primary data
From table 1 above, 63.33% of respondents were male and 36.67% were female. This shows that
there was no gender bias and thus has no effect on the findings of the study.
4.1.2 Respondents level of education
The researcher was interested in finding out the academic qualifications of the respondents.
The findings are given in the table below;
25 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
Table 2: Academic level of respondent
Academic Level Frequency
Percentage (%) Cumulative
Percentage
Masters 1 3.33 3.33
Degree 3 10 13.33
Diploma 21 70 83.33
Certificates 5 16.67 100
Total 30 100 100
Source: Primary data
The table 2 above: shows that 3.33 % of the respondents had attained Masters Level of
Education, 10 % had attained degree level, 70% had attained diploma, and 16.67 % had attained
certificates. This shows that respondents were literate enough to answer the questions
meaningfully.
4.1.3 Departments in which the respondents work.
The researcher was interested in finding out the departments in which the respondents work in.
The findings are given in the table below
Table 3: Department in which respondents worked at Koch goma SACCO
Department Frequency Percentage (%) Cumulative
Percentage
Management 4 13.33 13.33
Accounts 5 16.67 30
Loan 10 33.33 63.33
Marketing Depart 7 23.33 86.67
Other 4 13.33 100
Total 30 100 100
From table 3 above, the researcher selected respondents from the 5 departments of which 13.33%
were in management, 16.67% worked in the accounts department, 33.33% of the respondents were
employed as loan staff, 23.34% worked in the marketing department, and 13.33% were other
categories of respondents. This shows that the information concerning record keeping and quality
of financial reports was collected from a range of informed users.
Source: primary data
26 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
4.1.4. Age of Respondents
The researcher was interested in finding out the age groups of the respondents and three
categories were selected, those between 20-30 years, those between 31-40 years and those above
40 years as illustrated below.
Table 4: Age of respondents
Age bracket (Years) Frequency Percent (%) Cumulative
Percentage
20-30 6 20 20
31-40 9 30 50
Above 40 15 50 100
Total 30 100 100
Source: Primary data
In table 4, The researcher found out that the majority of the respondents were in the age bracket
of 40 and above years making 50% and 9 respondents were in the age bracket of 31-40 years
(30%) and 6 of the respondents were between 20 and 30 years of age (20%). This shows that the
respondents were eligible to give information that is reliable.
4.2 Findings on objective one: (to assess the record keeping system of Koch goma
SACCO)
4.2.1 The first indicator of record keeping is recognizing a transaction when it occurs
Recognition means that the business has chosen to recognize that a transaction has occurred and
has done so. Recognition is done by recording its existence on the accounts. For most part,
recognition is a more important concept in accrual basis accounting where it has more and more
complex criteria for when recognition may take place.
4.2.1.1 Findings on whether there is a standard in place for recognizing that a transaction
has occurred at Koch goma SACCO.
The researcher found out that out of the 30 respondents that were interviewed at Koch goma
SACCO, only 20 respondents strongly agreed that there is a standard that is used to determine
27 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
occurrence of a transaction, 5 respondents agreed, 3 were not sure and 2 disagreed as illustrated
in the table below
Table 5: Whether there is a standard for recognizing occurrence if a transaction.
Response Frequency Percentage (%) Cumulative
Percentage
Strongly Agree 20 66.7 66.7
Agree
Not sure
5
3
16.6
10.0
83.3
Disagree
Strongly disagree
2
0
6.70
0.00
100
Total 30 100 100
Source: Primary data
From the table 5 above, it shows that 66.7% of the respondents strongly agreed that there is a
standard for recognition of occurrence of a transaction, 16.6% agreed to the statement, 10% of
the respondents were not sure, and 6.7% disagreed. This implies that most of the employees of
Koch goma SACCO are aware of the existence of the standard that spells out when to realize that
a transaction has occurred, a sign that record keeping is exercised in Koch goma SACCO.
4.2.1.2 Findings on whether the standards set are followed whenever the SACCO is
carrying out its dealings with other organizations or individuals.
The study revealed that 5 of the employees of Koch goma SACCO strongly agreed that the
standards in place are followed when transacting with other organizations while 5 respondents
agreed, 3 were not sure and 15 disagreed and 2 strongly disagreed with the statement as it is
illustrated in the table below.
Table 6: Whether the standards in place are followed when transacting with other
organizations or individuals.
Response Frequency Percentage (%) Cumulative
Percentage (%)
Strongly Agree 5 16.67 16.67
Agree
Not sure
5
3
16.67
10
33.34
43.34
Disagree
Strongly disagree
15
2
50
6.66
93.34
100
Total 30 100 100
Source; Primary data
93.3
100
28 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
From the table 6 above, it shows that 16.67% of the respondents strongly disagreed that the
standards are followed all the time whenever Koch goma SACCO is transacting with other
organizations, 16.67% agreed to the above statement, 10% of the respondents were not sure, 50%
disagreed and 6.66% strongly disagreed. This implies that there is inconsistency in the record
keeping process hence poor quality reports.
4.2.2 The second indicator of record keeping is preparation of source documents.
4.2.2.1 Findings on whether authorization and approval of transactions takes place in Koch
goma SACCO
Out of the 30 respondents who were asked whether all accounting procedures specify who is
authorized to approve financial transactions. 5 of the respondents strongly agreed, 4 agreed 2
were not sure and 19 disagreed as illustrated in the table below.
Table 7: Findings on whether accounting procedures specify who is authorized to approve
financial transactions in Koch goma SACCO.
Response Frequency Percentage (%) Cumulative
Percentage (%)
Strongly Agree 5 16.67 16.7
Agree
Not sure
4
2
13.3
6.7
30
36.7
Disagree
Strongly disagree
19
0
63.3
0.00
100
100
Total 30 100 100
Source: Primary data
The table 7 above shows that 16.7% of the respondents strongly agreed to the fact that
accounting procedures specify who is authorized to approve financial transactions, 13.3% of the
respondents agreed, 6.7 % were not sure, and 63.3% of the respondents disagreed. The
disagreement by the 63.3% shows that there is a problem with the effectiveness of record
keeping since accounting procedures specifying who is authorized to approve financial
transactions in Koch goma SACCO are poor.
29 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
4.2.2.2 Findings on whether all expenditures are approved for all financial transactions in
Koch goma SACCO.
The researcher found out that out of the 30 respondents in Koch goma SACCO, 3 strongly
agreed that all expenditures are approved for all financial transactions, 10 agreed, 3 were not
sure, and 14 disagreed with the statement.
Table 8: Showing whether all expenditures are approved for all financial transactions in
Koch goma SACCO.
Response Frequency Percentage (%) Cumulative
Percentage (%)
Strongly Agree 3 10.0 10
Agree
Not sure
10
3
33.3
10.0
43.3
53.3
Disagree
Strongly disagree
14
0
46.6
0.00
100
100
Total 30 100 100
Source: Primary data
From the table 8 above, 10.0% strongly agreed that all expenditures are approved for all
financial transactions in Koch goma SACCO, 33.3% agreed, 10% of the respondents were not
sure and 46.7% disagreed that all expenditures are approved for all financial transactions in Koch
goma SACCO which implies that the record keeping systems are inefficient since there is a
problem in the area of approval of financial transactions in Koch goma SACCO.
4.2.2.3 Findings on whether Koch goma SACCO prepares documents to show evidence of
money received.
Out of the 30 respondents who were asked whether the SACCO prepares documents to show money
received, 4 of the respondents strongly agreed, 19 agreed, 2 were not sure and 5 disagreed as illustrated in
the table below
Table 9: Findings on whether the SACCO prepares documents to show money received
Response Frequency Percentage (%) Cumulative
Percentage (%)
Strongly Agree 4 13.3 13.3
Agree
Not sure
19
2
63.3
6.7
76.6
83.2
Disagree
Strongly disagree
5
0
16.7
0.00
100
100
Total 30 100 100
Source: Primary data
30 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
The table 9 above shows that 13.3% of the respondents strongly agreed to the fact that Koch
goma SACCO prepares documents to show money received, 63.3% of the respondents agreed,
6.7 % were not sure, and 16.7% of the respondents disagreed. This means that the SACCO
prepares source documents hence the availability of record keeping in Koch goma SACCO.
4.2.3 The third indicator of Record keeping is analysis and classification of transactions.
Management need to ensure that all transactions are properly classified in order to make relevant,
reliable, understandable and timely decisions.
4.2.3.1 Findings on whether all transactions are recorded into their appropriate accounts.
Out of the 30 respondents the researcher asked whether all transactions are recorded into their
proper accounts, 7 strongly agreed, 12 agreed, 6 were not sure, 3 disagreed and 2 strongly
disagreed as illustrated in the table below.
Table 10: Findings whether all transactions at the SACCO are recorded into their
appropriate accounts
Response Frequency Percentage (%) Cumulative
Percentage (%)
Strongly Agree 7 23.33 23.33
Agree
Not sure
12
6
40
20
63.33
83.33
Disagree
Strongly disagree
3
2
10
6.67
93.33
100
Total 30 100 100
Source; Primary data
From the table 10 above, 23.33 % strongly agreed, 40% agreed, 20% were not sure, 10%
disagreed and 6.67 % strongly disagreed that all transactions are recorded into their appropriate
accounts. This implies that Koch goma SACCO is strong in this department since most of the
respondents agree that records of accounts are classified in their proper accounts.
4.2.3.2 Findings on whether accounts are reviewed to make sure transactions are not
wrongfully classified.
The researcher asked whether all accounts are reviewed by another person to make sure that
transactions are classified in their right accounts. Out of the 30 respondents asked, 3 agreed, 7
were not sure and 20 disagreed as shown in the table below.
31 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
Table 11: Findings on whether all accounts are reviewed by another person to make sure
that a transaction is classified in their right accounts
Response Frequency Percentage (%) Cumulative
Percentage (%)
Strongly Agree 0 0 0
Agree
Not sure
3
7
10.0
23.3
10.0
33.3
Disagree
Strongly disagree
20
0
66.7
0.00
100
100
Total 30 100 100
Source; Primary data
The table 11 above shows that 10% agreed, 23.3 % was not sure, and 66.7% strongly disagreed
on whether all accounts are reviewed by another person to make sure that transactions are
classified in their right accounts. This implies that records of accounts are unreliable as they are
not assessed or audited by another person.
4.2.4 The fourth indicator of record keeping is recording of transaction details into
appropriate journals.
4.2.4.1 Findings on whether details of all transactions are recorded in a chronological
sequence into the journal.
The researcher was interested in knowing whether details of all transactions are recorded in a
chronological sequence into the journal. Of the 30 respondents asked, 3 strongly agreed, 2
agreed, 16 disagreed and 9 strongly disagreed with the statement as illustrated in the table below.
Table 12: Findings whether details of all transactions are recorded in a chronological
sequence into the journal
Response Frequency Percentage (%) Cumulative
Percentage (%)
Strongly Agree 3 10.0 10
Agree 2 6.67 16.67
Not Sure
Disagree
Strongly disagree
0
16
9
0.00
53.33
30
16.67
70
100
Total 30 100 100
Source; Primary data
32 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
The table 12: above shows that; 10% of the respondents strongly agreed that details of all
transactions are recorded in a chronological sequence, 6.67% agreed, 53.33% disagreed and 30%
strongly disagreed. This implies that record keeping in Koch goma SACCO is weak and records
of accounts can be easily manipulated.
4.2.4.2 Findings on whether all monetary transactions are recorded into the journal before
they are processed.
The researcher was interested in knowing whether all monetary transactions are recorded before
they are processed. Of the 30 respondents asked, 6 agreed, 11 were not sure, 12 disagreed and 1
respondent strongly disagreed as illustrated in the table below.
Table 13: Findings on whether all monetary transactions are recorded into the journal
before they are processed
Response Frequency Percentage (%) Cumulative
Percentage (%)
Strongly Agree 0 0.00 0.00
Agree
Not sure
6
11
20.0
36.67
20
56.67
Disagree
Strongly disagree
12
1
40.0
3.33
96.67
100
Total 30 100 100
Source; Primary data
The table 13 above shows 20.0% of the respondents agreed that all monetary transactions are
recorded into the journal before they are processed, 36.67% was not sure, 40% disagreed with
the assertion and 3.33% strongly disagreed. From the data above one realizes that a great number
of people disagreed that all monetary transactions are recorded before they are processed which
implies that there is possibility of omission of accounts data hence poor record keeping at Koch
goma SACCO.
4.2.5 The firth indicator of record keeping is posting of all details into the general ledger.
4.2.5.1 Findings on whether all details of transactions are kept in the general ledger
The researcher was interested in knowing whether all details of transactions are kept in the
general ledger. Of the 30 respondents asked, 4 strongly agreed, 3 agreed, 4 not sure, 12 disagreed
and 9 strongly disagreed with the statement as illustrated in the table below
33 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
Table 14: Findings on whether all details of transactions are kept in the general ledger
Response Frequency Percentage (%) Cumulative
Percentage (%)
Strongly Agree 4 13.33 13.33
Agree
Not sure
3
4
10
13.33
23.33
36.66
Disagree
Strongly disagree
11
8
36.67
26.67
73.33
100
Total 30 100 100
Source; Primary data
The table 14 above shows 13.33% of the respondents strongly agreed that all details of
transactions are kept in the general ledger, 10% agreed, 13.33% was not sure, 36.67% disagreed
with the assertion and 26.67% strongly disagreed. From the data above one realizes that a great
number of people disagreed that not all the details of transactions are kept in the general ledger,
therefore Koch goma SACCO is week in this area as this can lead to omission of accounting
records.
4.2.6 The sixth indicator of record keeping is extraction of the trial balance.
4.2.6.1 Findings on whether the SACCO summarizes all transactions in the general ledger
into the trial balance at the end of the financial year.
The researcher was interested in knowing whether the SACCO summarizes all transactions in the
general ledger at the end of the financial year into the trial balance. Of the 30 respondents asked,
3 strongly agreed, 4 agreed, 9 not sure, 12 disagreed and 2 strongly disagreed with the statement
as illustrated in the table below
Table 15: Findings on whether the SACCO summarizes all transactions in the general
ledger at the end of the financial year into the trial balance
Response Frequency Percentage (%) Cumulative
Percentage (%)
Strongly Agree 3 10 10
Agree
Not sure
12
9
40
30
23.33
53.33
Disagree
Strongly disagree
4
2
13.33
6.67
93.33
100
Total 30 100 100
Source; Primary data
34 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
The table 15 above shows 10% of the respondents strongly agreed that the SACCO summarizes
all transactions in the general ledger at the end of the financial year into the trial balance, 40%
agreed, 30% was not sure, 13.33% disagreed, and 6.67% strongly disagreed with the assertion.
From the data above one realizes that a great number of people agreed that the SACCO
summarizes all transactions in the general ledger at the end of the financial year, therefore Koch
goma SACCO is strong in this area which means that Koch goma prepare records of accounts
and financial reports.
4.2.6.2 Findings on whether adjusting entries are made at the end of each financial
period to much the revenue earned and the cost incurred in generating it.
The researcher was interested in knowing whether adjusting entries are made at the end of each
accounting period to match the revenue earned and the cost incurred in generating it.
Of the 30 respondents asked, 6 strongly agreed, 4 agreed, 12 not sure, 6 disagreed and 2 strongly
disagreed with the statement as illustrated in the table below.
Table 16: Findings on whether adjusting entries are made at the end of each financial
period to much the revenue earned and the cost incurred in generating it.
Response Frequency Percentage (%) Cumulative
Percentage (%)
Strongly Agree 6 20 20
Agree
Not sure
4
12
13.33
40
33.33
73.33
Disagree
Strongly disagree
6
2
20
6.67
93.33
100
Total 30 100 100
Source; Primary data
The table 16 above shows 20% of the respondents strongly disagreed that adjusting entries are
made at the end of each financial period to much the revenue earned and the cost incurred in
generating it,13.33% agreed 40% was not sure, 20% disagreed with the assertion and 6.67%
strongly disagreed. From the data above one realizes that a great number of people were not sure
that adjusting entries are made at the end of each financial period to much the revenue earned
and the cost incurred in generating it.
35 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
4.3 Findings on objective two: to establish the quality of financial statements of Koch
goma SACCO
4.4.1 The first indicator of quality of financial reporting system is understandability.
Information provided in financial reports should be presented in a way that is readily
understandable by the users.
4.4.1.1 Findings on whether financial information provided in the financial statements is
readily understandable to the users in Koch goma SACCO
The researcher was interested in knowing whether the information provided in the financial
statements was understandable to the respondents. Of the 30 respondents that were asked, only
16 strongly agreed, 4 agreed, 10 were not sure and as illustrated in the table below
Table 17, Findings on whether the financial information provided in financial statements is
readily understandable to the users.
Response Frequency Percentage (%) Cumulative
Percentage (%)
Strongly Agree 16 53.33 53.33
Agree
Not sure
4
10
13.33
33.34
66.66
100
Disagree
Strongly disagree
0
0
0.00
0.00
100
100
Total 30 100 100
Source: Primary data
From the table 17 above shows that 53.33% of the respondents strongly agreed that the financial
information was readily understandable to them, 13.33% agreed to the statement and 33.34%
were not sure this implies that the users of the financial information readily understand the
financial information provided which implies that the quality of financial statements is good in
this area.
4.3.2 The second indicator of quality of financial reporting system is relevance
Information must be relevant to the decision making needs of users. It is relevant when it
influences the economic decisions of users.
36 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
4.3.2.1 Findings on whether financial information provided is relevant in decision making
The researcher was interested in knowing whether the information provided to the respondents
was relevant to their decision making. Out of the 30 respondents asked 15 strongly agreed, 5
agreed and 10 disagreed as illustrated in the table below.
Table 18: Findings on whether the financial information provided in financial statements is relevant to decision making
Response Frequency Percentage (%) Cumulative
Percentage (%)
Strongly Agree 15 50.0 50.0
Agree
Not sure
10
0
33.33
0.00
83.33
83.33
Disagree
Strongly disagree
5
0
16.67
0.00
100
100
Total 30 100 100
Source; Primary data
From the table 18 above 50 % of the respondents strongly agreed that the financial information
provided in the financial statement is relevant to their decision making. 33.3 % of the
respondents agreed and 16.7 % of the respondents disagreed. This implies that most of the
respondents find the information relevant to their decision making needs thus making the quality
of the financial reporting good.
4.3.3 The third indicator of quality of financial statements is reliability
Information is reliable when it is free of material error and bias and can be depended upon by
users to represent faithfully what it purports to represent.
4.4.3.1 Findings on whether the financial information provided is free from bias
The researcher was interested in finding out whether the financial information provided in the
financial statements is free from bias. Out of the 30 respondents asked 12 strongly agreed, 8
agreed, 6 were not sure, and 4 disagreed as shown in the table below.
37 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
Table 19 Findings on whether the financial information provided is free from bias
Response Frequency Percentage (%) Cumulative
Percentage (%)
Strongly Agree 12 40.0 40.0
Agree
Not sure
8
6
26.67
20.0
66.67
86.67
Disagree
Strongly disagree
4
0
13.33
0.00
100
100
Total 30 100 100
Source; Primary data
From the table 19 above, 40 % of the respondents strongly agreed that the financial information
provided in the financial statement is free from bias. 26.67 % of the respondents agreed and 20
% of the respondents were not sure and 13.33% disagreed with the statement. This implies that
most the respondents find the information provided to them free of bias and thus the quality of
the financial reports generated in Koch goma SACCO is sound.
4.3.4 The fourth indicator of quality of financial reporting is timeliness
Timeliness means having information available to decision makers before it loses its capacity to
influence decisions
4.3.4.1 Findings on whether financial information is delivered in time to the users
The researcher was interested in knowing whether the financial reports are provided in time. Out
of the 30 respondents asked whether the financial reports were timely, 18 strongly agreed, 6
agreed, 3 were not sure and 3 disagreed as illustrated in the table below
Table 20: Findings on whether financial information is delivered in time to the users
Response Frequency Percentage (%) Cumulative
Percentage (%)
Strongly Agree 18 40.0 60
Agree
Not sure
6
3
20.0
10.0
80
90
Disagree
Strongly disagree
3
0
10.0
0.00
100
100
Total 30 100 100
Source: primary data
38 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
From the table 20 above 60% of the respondents strongly agreed that the financial information is
delivered to them in time. 20% agreed, 10 % were not sure and 10 % disagreed. This implies
that the financial information presented is timely and thus we can conclude that the quality of the
financial reports is enhanced by the timeliness in Koch goma SACCO
4.3.5 The fifth indicator of quality of financial reporting is materiality
Information is material when its omission or misstatement can influence the economic decisions
of the users of the information
4.3.5.1 Findings on whether the financial information provided is free from material
misstatements
The researcher was interested in finding out whether the information provided in the financial
reports of Koch goma SACCO is free from material misstatements. Of the 30 respondents asked
8 strongly agreed that the financial information was free of material misstatements, 12 agreed, 5
were not sure and 5 strongly disagreed as illustrated in the table below.
Table 21 Findings on whether the financial information provided is free from material
misstatements
Response Frequency Percentage (%) Cumulative
Percentage (%)
Strongly Agree 8 26.66 26.66
Agree
Not sure
12
5
40.0
16.67
66.66
83.33
Disagree
Strongly disagree
0
5
0.00
16.66
83.33
100
Total 30 100 100
Source; Primary data
From the table 21 above, 26.66% of the respondents strongly agreed that the financial
information was free from material misstatements, 40% agreed, 16.67% were not sure and
16.67% strongly disagreed with the statement. This implies that the financial information is to a
larger extent free from material misstatements and thus the quality of the financial reports is
greatly enhanced by the lack of material misstatements.
39 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
4.3.6 The fifth indicator of quality of financial reporting is comparability
Comparability is essential to financial information because the users need be able to compare the
information with that of other entities in the same industry to verify their performance and also to
compare the performance of the entity from periods to period.
4.4.6.1 Findings on whether the SACCO’s performance can be compared over time
The researcher was interesting in finding out whether the respondents were able to compare the
SACCO‟s performance over time. Of the 30 respondents that were interviewed, 6 strongly
agreed, 12 agreed with the statement, 5 were not sure and 7 Strongly disagreed as illustrated in
the table below.
Table 22 Findings on whether the SACCO’s performance can be compared over time
Response Frequency Percentage (%) Cumulative
Percentage (%)
Strongly Agree 6 20.0 20
Agree
Not sure
12
5
40.0
16.7
60
76.67
Disagree
Strongly disagree
0
7
0.00
23.3
76.67
100
Total 30 100 100
Source; Primary data
From the table 22 above, 20% of the respondents strongly agreed that the SACCO‟s
performance could be compared over time, 40% agreed to the statement, 16.7% were not sure
and 23.3% strongly disagreed. This implies that the quality of financial reports is effective and
efficient in this area.
4.3.6.2 Findings on whether the financial information can be compared with that of other
similar financial institutions
The researcher was interested in finding out whether the respondents were able to compare the
SACCO‟s financial information with that of other similar institutions. Of the 30 respondents that
were interviewed, 1 strongly agreed, 3 agreed with the statement, 20 were not sure and 6
disagreed as illustrated in the table below
40 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
Table 23 Findings on whether the financial information can be compared with that of
other similar institutions
Response Frequency Percentage (%) Cumulative
Percentage (%)
Strongly Agree 1 3.33 3.33
Agree
Not sure
3
20
10.0
66.7
13.33
80
Disagree
Strongly disagree
6
0
20.0
0.00
100
100
Total 30 100 100
Source; Primary data
From the table 23 above 3.3% of the respondents strongly agreed that the financial information
can be compared with that of other similar financial institutions, 10% agreed to the statement,
66.67% were not sure, and 20% disagreed .This implies that a greater number of the respondents
were not sure if the information generated could be compared with that of other similar
institutions.
41 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
4.4 Findings on objective three: to establish the relationship between Record keeping and
quality of financial reports
Table 24: showing the relationship between Record keeping and the quality of financial
reports
Record keeping Quality of financial reports
Record keeping Pearson Correlation 1
Sig. (2-tailed) .
N 30
.774 (**)
.000
30
Quality Financial
Reports
Pearson Correlation .774 (**)
Sig. (2-tailed) .000
N 30
1
.
30
** Correlation is significant at the 0.01 level (2-tailed)
Source: Primary data
Results revealed that the correlation coefficient is 0.774 meaning that there is a positive
relationship between record keeping and quality of financial reporting. This implies that record
keeping has an impact on the quality of financial statements and thus will be more reliable and
accurate.
Table 24: Correlation between record keeping and the quality of financial reports
Correlation
42 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
CHAPTER FIVE
SUMMARY OF MAJOR FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
5.0 Introduction
This chapter presents a summary of major findings, conclusions reached and the researcher‟s
recommendations derived from the study of the relationship between record keeping and quality
of financial reports.
5.1 Summary of the major findings
The research was carried out to establish the relationship between record keeping and the quality
of financial reports in Koch goma SACCO. This was done in relation to the following objectives:
To assess the record keeping system of Koch goma SACCO
To establish the quality of financial statements of Koch goma SACCO
To establish a relationship between record keeping and quality financial reports
5.2. Summary of findings on objective one: To assess the record keeping system of Koch
goma SACCO
The study revealed that most of the employees of Koch goma SACCO can compare financial
information by analyzing the relationship between record keeping and the quality of financial
reports. It can also be concluded that most of the employees strongly agreed that the standards
are set, however, the set standards are not followed in all the dealings of the SACCO.
The research revealed that most of the employees strongly disagreed that all expenditures are
approved for all financial transactions in Koch goma SACCO. Most of the employees of Koch
goma SACCO also agreed that documents that show evidence of money received are prepared.
This means that there are possibilities of omission of transaction‟s data hence fraud within the
SACCO.
According to the findings, most respondents agreed that transactions are recorded in appropriate
accounts but disagreed that the accounts are reviewed by another person to prove that they are
43 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
accurately recorded in the right accounts. This show that the financial reports are prone to
mistakes as they are not verified hence unreliable.
According to the findings, most respondents disagreed that the records stored in the journal are
recorded in a chronological sequence. This makes it difficult to make timely and accurate
decisions from the records of accounts as the data is very difficult to use. The respondents also
disagreed that not all monetary transactions are recorded before they are processed; this makes it
difficult to keep records that will be used in financial reporting hence possibilities of omission of
accounting records.
According to the respondents, most of the employees disagreed that all the transaction are kept in
the general ledger, this means that the records are prone to omission hence unreliable financial
reports.
According to respondents, most of the employees agreed that all transactions are summarized in
the general ledger at the end of the financial year, this means that both columns (Debit and
credit). The respondents also disagreed that the adjusting entries are made at the end of the
accounting period to match revenue earned and the expenses incurred in earning it. This means
that the SACCO has a problem with calculating accruals and deferred items in accrual
accounting.
5.3 Summary of findings on Objective two: To establish the quality of financial reports
of Koch goma SACCO.
The study on this objective revealed that most of the respondents understand the information in
the financial reports. The respondents further strongly agreed that the financial information
provided to them was relevant to their decision making process. The respondents strongly agreed
that the financial information provided to them is free from bias and delivered in time to them. In
regards to material misstatements in the financial information provided to the users of the
financial statements most agreed that the information was free from material misstatement. Most
of the respondents agreed that the SACCO‟s performance can be compared with that of other
institutions over time. Therefore, the quality of the financial reports generated in Koch goma
SACCO was efficient.
44 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
5.4 Summary on findings on Objective three: To establish a relationship between
record keeping and quality financial reports.
Findings on this objective revealed that there is a strong relationship between record keeping and
the quality of financial reports as shown by the Pearson‟s correlation coefficient of 0.774, the
coefficient of determination of 0.774 indicates that the two variables are related to the extent of
77.4% meaning that when there is inefficiency in record keeping, then the quality of financial
reports will also be poor or low.
5.5 Conclusion
5.5.1 Conclusion on findings of objective one: To assess the record keeping system of Koch
goma SACCO
Based on the findings on objective one, record keeping in Koch goma SACCO is inefficient
because most respondents disagreed with statements made under this objective. Also basing on
the findings it can be concluded that record keeping in Koch goma SACCO is not reliable
enough as most respondents disagreed and strongly disagreed with the statements.
5.5.2 Conclusion on findings of objective two: To establish the quality of financial
statements of Koch goma SACCO
According to objective two the quality of financial reports at Koch goma SACCO limited was
good since most of the respondents could understand them readily, and most of the respondents
strongly agreed that the financial reports were relevant to their decision making, the respondents
further strongly agreed that the financial information was free from bias and delivered to them in
time. Most of the respondents also agreed that the information provided to them was free from
material misstatements and was comparable with that of similar institutions. It can thus be
concluded that they have a good financial reporting system.
5.5.3 Conclusion on findings of objective three: To establish a relationship between record
keeping and quality financial reports.
According to objective three, there is a positive strong relationship between record keeping and
the quality of financial reports that is 0.774
45 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
5.6 Recommendations
To ensure a strong record keeping system and good quality reporting system the following need
to be considered:
1. Koch goma SACCO need to continuously employ a consistent record keeping system to
positively have a continuous financial reporting system
2. Indicators for record keeping should be considered and emphasized in the accounting
procedures and these include identifying whether the transaction has occurred, preparing
source documents e.g. receipts, invoices, analyzing and classifying transactions, recording
transactions into appropriate journals, posting details in the journals into general ledgers and
finally extracting the trial balance.
3. Koch goma SACCO should employ only skilled and trained personnel in order to improve on
the quality of financial reports.
46 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
REFERENCES
1. Beckett D.W.I (1980) Book Keeping and Accounts, (2nd
Edition), stanly thorres
2. Benden (1978). BOOK Keeping guide for Beginners, (4th
Edition), pearson education
Limited
3. Frank wood and Alan Sangster (2002). Business Accounting (9th
Edition), pitman
publishing London
4. Frank wood (1989). Business Accounting, (6th
Edition), Pretence hall.
5. Fraser C.W. Understanding Financial Statements, (6th
Edition), pretence hall.
6. Larson, K.D. & pyle, W.W. (1998). Fundamentals Accounting Principles, (11th
Edition),
Irwin Homewood, Illionois.
7. Meneshwari S.N. (1996). Fundamental Accounting Principles (4th
Edition), Vikas
printing house.
8. Omunuk B Joseph (1999) Fundamental Accounting Principles, Uganda printing and
publishing cooperation.
9. Panday I. M. (2005). Financial Management (9th
Edition), Vikas publishing house.
10. Panday I. M. (1998) Essentials of Management Accounting, (1st Edition) Vikas publishing
house.
11. Stephen K Nkundanyanga, (2004) Advanced Accounting, (Practical approach)
12. Tony Blackwood (1999). Accounting for Business, (2nd
Edition), Business Education
Publishers.
13. William, Haka, Buttner, meigs (2002). Financial Managerial Accounting, (2nd
Edition)
Mcgraw Hilltandards. Journal of the Institute for Public Finance and Auditing, March
2000.
47 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
APPENDIX 1
QUESTIONNAIRE TO STAFF
Dear respondent,
I am a Bachelor of Commerce student of Makerere University College of Business and
Management Science. I am carrying out a study about the relationship between record keeping
and quality of financial reports of Koch goma SACCO as part of my academic requirement for
the award of Bachelor of Commerce. This information is purely and strictly for academic
purposes and will be treated with confidentiality.
Please tick the appropriate box as applicable.
1. Gender Female Male
2. What is your highest level of Education?
3. In which department are you working?
Management Accounts Human Resource Loans
4. Age bracket
20-30 years 30-40 years above 40 years
Record keeping
SECTION B: (identifying whether the transaction has occurred)
5. Koch goma SACCO has a standard in place for recognising that a transaction has occurred.
Strongly Agree Agree Not sure Disagree Strongly Disagree
Masters Degree Diploma Certificate Others specify)…………………
48 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
6. The standard set is followed whenever Koch goma SACCO transacts business with
individuals or organisations.
Strongly Agree Agree Not sure Disagree Strongly Disagree
SECTION B: (Preparation of Source Documents)
Because of the relatively high risk associated with transactions involving cash, the SACCO has a
cash management program to safeguard cash and ensure accurate reporting of this asset.
7. The accounting procedures specify who is authorized to approve financial transactions
Strongly agree Agree Not sure Disagree Strongly disagree
8. All Expenditure are approved for all financial transactions
Strongly agree Agree Not sure Disagree Strongly disagree
9. Koch goma SACCO prepares documents to show evidence of money received.
Strongly Agree Agree Not sure Disagree Strongly Disagree
SECTION C: (Analysing and Classification of Transactions)
10. All transactions are recorded in their appropriate accounts.
Strongly Agree Agree Not sure Disagree Strongly Disagree
11. All accounts are reviewed by another person to make sure that transactions are classified in
their right accounts.
Strongly Agree Agree Not sure Disagree Strongly Disagree
49 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
SECTION D: (Recording transaction details into appropriate journals) 12. All transaction details are recorded in a chronological sequence into the journal. Strongly Agree Agree Not sure Disagree Strongly Disagree
13. All monetary transactions are recorded before they are processed into the journal. Strongly Agree Agree Not sure Disagree Strongly Disagree
SECTION E: (Posting the details from the journals to the general ledger)
14. All details of transactions are kept in the general ledger Strongly Agree Agree Not sure Disagree Strongly Disagree
SECTION F: (Preparation of a Trial Balance)
15. Koch goma SACCO summarizes all transactions in the general ledger at the end of the financial year into the trial balance.
Strongly Agree Agree Not sure Disagree Strongly Disagree
16. Adjusting entries are made at the end of each accounting period to match the revenue earned in that period with the expenses incurred in earning it.
Strongly Agree Agree Not sure Disagree Strongly Disagree
Quality of Financial Statements
SECTION F:
Understandable
17. Financial information provided in the financial reports is easily understandable to me
Strongly agree Agree Not sure Disagree Strongly disagree
50 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
SECTION G:
Relevance
18. Financial information provided to me is relevant in my decision making.
Strongly agree Agree Not sure Disagree Strongly disagree
SECTION H: Reliability
19. . The financial information provided to me is free from bias
Strongly agree Agree Not sure Disagree Strongly disagree
SECTION I: Timeliness
20. The financial information is delivered to me in time.
Strongly agree Agree Not sure Disagree Strongly disagree
SECTION J: Materiality
21. The financial information provided to me is free from material misstatements.
Strongly agree Agree Not sure Disagree Strongly disagree
SECTION K: Comparability
22. I am able to compare the SACCO‟s performance over time
Strongly agree Agree Not sure Disagree Strongly disagree
23. I can compare financial information of the SACCO with other similar SACCO‟s information.
Strongly agree Agree Not sure Disagree Strongly disagree
51 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
24. What other factors affect the quality of the financial reports in Koch goma SACCO?
………………………………………………………………………………………………………
…………………………………………………………………….………………...………………
25. Suggest possible measures for the improvement of the quality of financial statements
………………………………………………………………………………………………………
………………………………………….…………………………………………..……………….
Relationship between record keeping and the quality of financial reports
26. There is a relationship between book keeping and the quality of financial statements.
Strongly agree Agree Not sure Disagree Strongly disagree
26. What other factors influence the quality of financial reports amidst Book keeping?
............................................................................................................................................................
..............................................................................................................................................
27. Suggest ways on how to improve on the quality of financial reports at Koch goma
SACCO.
............................................................................................................................................................
..............................................................................................................................................
Thank you for your cooperation
52 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
APPENDIX 1
QUESTIONNAIRE TO USERS
Dear respondent,
I am a Bachelor of Commerce student of Makerere University College of Business and
Management Science. I am carrying out a study about the relationship between Record keeping
and quality of financial reports of Koch goma SACCO as part of my academic requirement for
the award of Bachelor of Commerce. This information is purely and strictly for academic
purposes and will be treated with confidentiality.
SECTION A: General information
Please tick the appropriate box as applicable.
27. Gender Female Male
28. What is your highest level of Education?
29. In which department are you working?
Management Accounts Human Resource Loans
30. Age bracket
20-30 years 30-40 years above 40 years
Record keeping
SECTION B: (Preparation of Source Documents)
31. I am a user of Koch goma records of accounts
Strongly Agree Agree Not sure Disagree Strongly Disagree
Masters Degree Diploma Certificate Others specify)…………………
53 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
32. Koch goma SACCO prepares documents to show evidence of money received.
Strongly Agree Agree Not sure Disagree Strongly Disagree
33. Koch goma SACCO prepares books of accounts
Strongly Agree Agree Not sure Disagree Strongly Disagree
34. Koch goma SACCO prepare documents of accounts.
Strongly Agree Agree Not sure Disagree Strongly Disagree
Quality of Financial Statements
SECTION C: Understandable
35. Financial information provided in the financial reports is easily understandable.
Strongly agree Agree Not sure Disagree Strongly disagree
SECTION D: Relevance
36. Financial information provided to me is relevant in decision making.
Strongly agree Agree Not sure Disagree Strongly disagree
SECTION E: Timeliness
37. The financial information is delivered in time.
Strongly agree Agree Not sure Disagree Strongly disagree
54 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
SECTION F: Reliability
38. . The financial information provided is free from bias
Strongly agree Agree Not sure Disagree Strongly disagree
SECTION G: Materiality
39. The financial information provided is free from material misstatements.
Strongly agree Agree Not sure Disagree Strongly disagree
SECTION H: Comparability
40. I can compare financial information of the SACCO with other similar SACCO‟s information.
Strongly agree Agree Not sure Disagree Strongly disagree
SECTION I: Verifiability
41. The information provided in the financial statements can be audited or verified
Strongly agree Agree Not sure Disagree Strongly disagree
SECTION J: consistency
42. The financial information provided is consistent over the years
Strongly agree Agree Not sure Disagree Strongly disagree
SECTION K: completeness
43. The financial information provided is complete
Strongly agree Agree Not sure Disagree Strongly disagree
55 Oloya Andrew Richard Reg No: 03/13517/ext students no: 203013692 Supervisor: Mr. Kajumbula Richard
SECTION L: Faithfull representation
44. The financial statement provided are faithfully represented
Strongly agree Agree Not sure Disagree Strongly disagree
Thank you for your cooperation