This research question was meant to establish the different financial reporting procedures in World Vision – Uganda. To obtain data for this research question, respondents were asked to state the financial reporting procedures followed at World Vision Uganda. Under this research question, the following sub sections were asked;
i) What are the most common financial reporting procedures followed at World Vision Uganda:
ii) What are the quantitative factors considered when selecting the appropriate financial reporting procedure?
iii) What are the qualitative factors considered when selecting the appropriate financial reporting procedure?
The findings were recorded and presented as follows.
Table 4.2.1 showing most common financial accounting procedures followed at World Vision – Uganda
Responses Frequency Percentage (%)
Income statement 06 30
Cash flows 09 45
Balance sheet 05 25
Total 20 100
Source: Primary data
Table 4.2.1above showed that the most common financial reporting procedure used in World Vision – Uganda was cash flow statements and this recorded 09 (45%) responses, followed by income statements with 06 (30%)at the end of the year responses and balance sheet with 05 (25%) responses. This implied that among all branches of World Vision in Uganda, the cash flows were the most common financial accounting/reporting
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procedures, and these are often prepared every month to the Directors as well as donor agencies.
Respondents were also asked to state the factors considered when selecting the appropriate financial reporting procedure, and the findings were recorded and presented as below.
Table 4.2.2 showing factors considered when selecting the appropriate financial reporting procedure
Responses Frequency Percentage (%)
Quantitative factors 12 60
Qualitative factors 08 40
Total 20 100
Source: Primary data
According to the table above, the most common factors considered when selecting the appropriate financial reporting procedure were quantitative factors with 12 (60%) responses compared to the qualitative factors with 08 (40%) responses. Through face to face interviews with Directors and financial managers, it was explained that quantitative factors include determining the size or magnitude of the financial information to present or report, and this guides them on whether to use balance sheet, cash flow statements or income statements among others.
Still on the quantitative factors considered by management when selecting the appropriate financial reporting procedure, respondents mentioned that management may base on numerical figures and these were 10 (10%) respondents while those who mentioned measurement factors were also 10 (50%) respondents. The major distinguishing characteristics are mastery of particular intellectual skill, acquired by training and education, adherence by its members to a common code of conduct
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established by its administering body, including maintaining an outlook which is essentially objective and acceptance of a duty to society as a whole (usually in return to restrictions in use of a title or in the granting of a qualification).
When respondents were asked to state the qualitative factors considered when selecting the appropriate financial reporting procedure, the responses were presented as hereunder.
Table 4.2.3 showing responses on the qualitative factors considered when selecting the appropriate financial reporting procedure in World Vision-Uganda
Responses Frequency Percentage (%)
Reliability 18 90 Comparability 11 55 Understandability Timeliness 18 10 90 50 Accuracy 17 85 Others 15 75
Total N/A N/A
Source: Primary data
According to the table above, important qualitative factors were revealed that management bases on to determine the method of financial reporting. The table for instance showed that the factors of reliability and under stability recorded 18 (90%) responses each. Reliability assumes that the information being relied on is neutral with respect to parties potentially affected. For example, a net income forecast provided by the management of a company may possess a high degree of relevance to investors and creditors trying to predict future cash flows. A forecast necessarily contains subjectivity in the estimation of future events. GAAP presently do not require organizations to provide forecasts of any financial variables on reliability.
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On the other hand, financial reporting provided in financial statements should be presented in such a way that it is readily understandable by users. The financial statement users are assumed to have abilities that include; reasonable knowledge of business and economics activities, accounting, as well as willingness to study information with reasonable diligence. The study also established that when selecting the appropriate financial reporting procedure, management in World Vision Uganda is guided by both quantitative and qualitative considerations. Quantitative factors included whether the information is numerical, measurable, when to resent it as well as its size or magnitude.
On qualitative factors still, the study found that management assess whether the information to present is reliable, understandable, timely, or Comparable. The factor of comparability recorded 11 (55%) responses. To be useful, information must make a difference in the decision process. To be useful for decision making, accounting information should be comparable. Thus, financial information reporting may lead to a poor design and management, poorly provided information for variety of decision making purposes, poorly production of unreliable information and accounting statement given out have not led to the success and good performance of the organizations activities. Most successful organizations in the world are those with improved financial reporting information for example use of information systems like computers and specialized data capture programs especially those relevant to accountancy, like Excel, Winstat and Access among others. Accuracy was mentioned by 17 (85%) respondents.
The use of financial information system on financial reporting enhances performance of a number of operating duties involving financial management like enhancing accuracy, therefore providing no achievement to the organizational goals and objectives of the organization. It has led to repeatedly and consistent production of records, keep records on economic performance and related third party needs, effectiveness, accuracy of accounting records and reliable information sources needed by management to undertake managerial decision required in the by dynamic changing business environment of the organization.
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Figure 5: Bar graph showing responses on the qualitative factors considered when selecting the appropriate financial reporting procedure in World Vision-Uganda
On the other hand, the category of ‗others‘ recorded 15 (75%); this was a significant percentage and upon probing by the researcher, respondents revealed that other important qualitative factors considered include neutrality, and representational faithfulness. 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 organisation.
On the other hand, representational faithfulness means agreement between a measure and a real-world phenomenon that the measure is supposed to represent favor to any particular groups or companies nor influence behavior in any specific way. A trade-off often is required between various degrees of relevance and reliability. The standard- setting system is credible, that selection of board members is based on merit and not the
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influence of special interests, and that standards are developed neutrally with the objective of relevant and reliable information, not purposeful manipulation.
Meanwhile, timeliness recorded 10 (50%) responses. Information is timely if it is available to users before a decision is made. Undue delay in reporting of accounting information may lead to loss of its relevance. It is this important to consider both aspects, impairment of reliability by reporting in time or delaying reporting to include reliable information are unneeded actions. The study found that neutrality was highly related to the establishment of accounting standards. This then implies that quality accounting information requires balancing the relative merits of timely reporting and provision of reliable information, aimed at how best to satisfy the economic decision making needs of users. However, management expressed the view that it‘s not always possible or easy to reconcile conflicts between the characteristics of relevance, reliability, comparability and understandability and trade-off may be necessary and that prioritizing according to the context was considered important.
4.3 Research Question two: What are the continuing projects in World Vision –