Intellectual capital, isomorphic forces and internal controls over financial reporting in Ugandan microfinance institutions

The purpose of this study is to examine the role of intellectual capital and isomorphic forces in strengthening internal controls over financial reporting (ICFR) in microfinance institutions (MFIs). This study is cross-sectional and correlational. Data were collected through a questionnaire survey o...

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Autores principales:	Frank Kabuye, Kassim Alinda, Nicholas Bugambiro, Saphurah Kezaabu
Formato:	article
Lenguaje:	EN
Publicado:	Taylor & Francis Group 2021
Materias:	internal controls over financial reporting intellectual capital isomorphic forces microfinance institutions uganda Business HF5001-6182 Management. Industrial management HD28-70
Acceso en línea:	https://doaj.org/article/2beb0211d5bc4f539e7c9ce1acaef17b
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spelling	oai:doaj.org-article:2beb0211d5bc4f539e7c9ce1acaef17b2021-12-02T16:29:27ZIntellectual capital, isomorphic forces and internal controls over financial reporting in Ugandan microfinance institutions2331-197510.1080/23311975.2021.1944960https://doaj.org/article/2beb0211d5bc4f539e7c9ce1acaef17b2021-01-01T00:00:00Zhttp://dx.doi.org/10.1080/23311975.2021.1944960https://doaj.org/toc/2331-1975The purpose of this study is to examine the role of intellectual capital and isomorphic forces in strengthening internal controls over financial reporting (ICFR) in microfinance institutions (MFIs). This study is cross-sectional and correlational. Data were collected through a questionnaire survey of 66 MFIs that are members of the Association of Microfinance Institutions of Uganda (AMFIU). Both intellectual capital and isomorphic forces positively and significantly contribute to the strength of ICFR. In terms of control variables, ownership structure, capital structure and firm age are not significant predictors of ICFR. Policy-wise, the regulator(s) of MFIs should always issue-specific and time-bound directives to MFIs with ICFR shortfalls to enhance their control environment. Also, the responsibility of maintaining adequate ICFR should be extended to the management of MFIs by tasking them to account for lapses in ICFR. This would reduce incidences of senior management usurping the powers of the board, which would lead to overriding of ICFR. Also, policies should be specific on the composition of the board to improve its intellectual potential. To the authors’ knowledge, this study provides initial empirical evidence of the influence of intellectual capital and isomorphic forces in strengthening ICFR in MFIs using evidence from a developing African country. Overall, this study found that intellectual capital (entity factor) and isomorphic forces (institutional factors) are all predictors of ICFR. This is possible because managers, employees and those charged with governance of the entity can be influenced by institutional forces that affect ICFR positively.Frank KabuyeKassim AlindaNicholas BugambiroSaphurah KezaabuTaylor & Francis Grouparticleinternal controls over financial reportingintellectual capitalisomorphic forcesmicrofinance institutionsugandaBusinessHF5001-6182Management. Industrial managementHD28-70ENCogent Business & Management, Vol 8, Iss 1 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	internal controls over financial reporting intellectual capital isomorphic forces microfinance institutions uganda Business HF5001-6182 Management. Industrial management HD28-70
spellingShingle	internal controls over financial reporting intellectual capital isomorphic forces microfinance institutions uganda Business HF5001-6182 Management. Industrial management HD28-70 Frank Kabuye Kassim Alinda Nicholas Bugambiro Saphurah Kezaabu Intellectual capital, isomorphic forces and internal controls over financial reporting in Ugandan microfinance institutions
description	The purpose of this study is to examine the role of intellectual capital and isomorphic forces in strengthening internal controls over financial reporting (ICFR) in microfinance institutions (MFIs). This study is cross-sectional and correlational. Data were collected through a questionnaire survey of 66 MFIs that are members of the Association of Microfinance Institutions of Uganda (AMFIU). Both intellectual capital and isomorphic forces positively and significantly contribute to the strength of ICFR. In terms of control variables, ownership structure, capital structure and firm age are not significant predictors of ICFR. Policy-wise, the regulator(s) of MFIs should always issue-specific and time-bound directives to MFIs with ICFR shortfalls to enhance their control environment. Also, the responsibility of maintaining adequate ICFR should be extended to the management of MFIs by tasking them to account for lapses in ICFR. This would reduce incidences of senior management usurping the powers of the board, which would lead to overriding of ICFR. Also, policies should be specific on the composition of the board to improve its intellectual potential. To the authors’ knowledge, this study provides initial empirical evidence of the influence of intellectual capital and isomorphic forces in strengthening ICFR in MFIs using evidence from a developing African country. Overall, this study found that intellectual capital (entity factor) and isomorphic forces (institutional factors) are all predictors of ICFR. This is possible because managers, employees and those charged with governance of the entity can be influenced by institutional forces that affect ICFR positively.
format	article
author	Frank Kabuye Kassim Alinda Nicholas Bugambiro Saphurah Kezaabu
author_facet	Frank Kabuye Kassim Alinda Nicholas Bugambiro Saphurah Kezaabu
author_sort	Frank Kabuye
title	Intellectual capital, isomorphic forces and internal controls over financial reporting in Ugandan microfinance institutions
title_short	Intellectual capital, isomorphic forces and internal controls over financial reporting in Ugandan microfinance institutions
title_full	Intellectual capital, isomorphic forces and internal controls over financial reporting in Ugandan microfinance institutions
title_fullStr	Intellectual capital, isomorphic forces and internal controls over financial reporting in Ugandan microfinance institutions
title_full_unstemmed	Intellectual capital, isomorphic forces and internal controls over financial reporting in Ugandan microfinance institutions
title_sort	intellectual capital, isomorphic forces and internal controls over financial reporting in ugandan microfinance institutions
publisher	Taylor & Francis Group
publishDate	2021
url	https://doaj.org/article/2beb0211d5bc4f539e7c9ce1acaef17b
work_keys_str_mv	AT frankkabuye intellectualcapitalisomorphicforcesandinternalcontrolsoverfinancialreportinginugandanmicrofinanceinstitutions AT kassimalinda intellectualcapitalisomorphicforcesandinternalcontrolsoverfinancialreportinginugandanmicrofinanceinstitutions AT nicholasbugambiro intellectualcapitalisomorphicforcesandinternalcontrolsoverfinancialreportinginugandanmicrofinanceinstitutions AT saphurahkezaabu intellectualcapitalisomorphicforcesandinternalcontrolsoverfinancialreportinginugandanmicrofinanceinstitutions
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Intellectual capital, isomorphic forces and internal controls over financial reporting in Ugandan microfinance institutions

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