Governance practices and financial reporting in not-for-profit organizations: a case of not-for-profit organizations working with refugees in south western Uganda

Abstract

This study examined the relationship between governance practices and financial reporting in not-for-profit organizations working with refugees in South Western Uganda. The study focused on three objectives which included; establishing the relationship between governance structure and financial reporting, the relationship between audit committee and financial reporting and the relationship between accountability and financial reporting. The study employed a cross-sectional survey research design and quantitative research approach. The study targeted 92 participants and 79 participated in the study indicating 85.9%, response rate. The study findings revealed that that governance structure have a significant and positive relationship with the financial reporting (r = .534**, P < 0.01). Then, from the regression analysis, governance structure had a significant positive effect on financial reporting (B = 0.316, p = 0.003). The results also revealed that audit committee had a significant and positive correlation with the financial reporting (r = .366**, P < 0.01). However, from the regression analysis, the audit committee variable showed no significant contribution (B = 0.020, p = 0.846). It was also revealed that accountability was significantly and positively related with the financial reporting (r = .603**, P < 0.01) and from the regression analysis, accountability emerged as a strong and significant predictor (B = 0.479, p < 0.001). In the multiple regression analysis, the combination of governance structure, audit committee, and accountability collectively explained 42.5% of the variation in financial reporting (Adjusted R Square = 0.425). Therefore, the study concluded that, accountability was the most the significant predictors of financial reporting. The study recommended that not-for-profit organizations serving refugees strengthen their governance structures by prioritizing management and board independence, enhancing stakeholder representation, promoting gender balance, and ensuring transparency in board appointments. It was also recommended that not-for-profit organizations working with refugees strengthen the strategic role and functional relevance of their audit committees. Lastly, it was recommended that not-for-profit organizations serving refugees strengthen their accountability systems by enhancing stakeholder engagement, reinforcing legal compliance, and institutionalizing performance accountability measures.