INTEGRATED FINANCIAL MANAGEMENT SYSTEM AND FINANCIAL REPORTING IN SELECTED COMMERCIAL BANKS IN BUJUMBURA, BURUNDI BY KANEZA LEILA 1164-05026-09512 A THESIS SUBMITTED TO THE COLLEGE OF ECONOMICS AND MANAGEMENT IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF MASTER’S DEGREE IN FINANCE AND ACCOUNTING OF KAMPALA INTERNATIONAL UNIVERSITY, KAMPALA UGANDA Sept, 2019 i DECLARATION I declare that this thesis is my original work and has not been submitted for any other award of a degree and published at any institution of higher learning, except where due acknowledgement has been made in the text. _______________________________ ________________________________ Kaneza Leila Date i APPROVAL I declare that this thesis has been done by the student under my supervision and is ready for further cross-examination by other examiners. ______________________ _______________________ Dr. Sunday Arthur Date ______________________ _______________________ Dr. Joseph B.K. Kirabo Date ii DEDICATION I dedicate this research thesis to my late Father, Mr. Birizanye and Mother, Mrs. Niyungeko for blessing me with the gift of education. iii ACKNOWLEDGEMENT My deepest, heartfelt thanks, first of all goes to the Almighty God for granting me his protection and knowledge in coming out with this important study. Furthermore, I wish to recognize my supervisors in the person of Dr. Sunday Arthur, and Dr. Joseph B.K. Kirabo with whom I worked closely during the stages of writing this thesis. I am also thankful to all my lecturers at College of Economics and Management of Kampala International University for being helpful and imparting knowledge to me in diverse ways during Face-to-Face and beyond. In addition, I thank the management and staff of the surveyed commercial banks for giving me audience and permission to carry out this study from their companies. Their support and corporation made me collect vital information that led to the successful completion of this research work. I would like to express utmost gratitude to my beloved family members for their enthusiastic support, constant inspiration and blessings during my study. Last, I am also indebted to my friends, May God richly bless them. iv LIST OF ACRONYMS BANCOBU Banque Commerciale du Burundi BBCI Banque Burundaise pour le Commerce et l’Investiment BCB Banque de Crédit de Bujumbura CBK Central Bank of Kenya CDI Composite Disclosure Index EMS Environmental Management System EU European Union FASB Financial Accounting Standards Board FR Financial Reporting FRC Financial Reporting Council GAAP Generally Accepted Accounting Principles IASB International Accounting Standards Board IBB Interbank Burundi IFMS Integrated Financial Management System IFRSs International Financial Reporting Standards (IFRSs) KASB Kenyan Accounting Standards Board KSE Kenyan Stock Exchange NSE Nigerian Stock Exchange v TABLE OF CONTENTS DECLARATION................................................................................................................................ i APPROVAL ..................................................................................................................................... ii DEDICATION ................................................................................................................................. iii ACKNOWLEDGEMENT..................................................................................................................iv LIST OF ACRONYMS.......................................................................................................................v LIST OF TABLES ............................................................................................................................ix LIST OF FIGURES ............................................................................................................................x ABSTRACT .....................................................................................................................................xi CHAPTER ONE ................................................................................................................................1 INTRODUCTION ..............................................................................................................................1 1.0 Introduction ..................................................................................................................................1 1.1 Background to the Study................................................................................................................1 1.1.1 Historical Perspective .................................................................................................................1 1.1.2 Theoretical Perspective ...............................................................................................................3 1.1.3 Conceptual Perspective ...............................................................................................................4 1.1.4 Contextual Perspective ...............................................................................................................5 1.2 Problem Statement ........................................................................................................................5 1.3 Purpose of the Study .....................................................................................................................6 1.4 Objectives of the Study..................................................................................................................7 1.5 Research Questions .......................................................................................................................7 1.6 Hypotheses ...................................................................................................................................7 1.7 Scope of the Study ........................................................................................................................7 1.7.1 Geographical Scope....................................................................................................................7 1.7.2 Content Scope ............................................................................................................................8 1.7.3 Time Scope................................................................................................................................8 1.8 Significance of the Study ...............................................................................................................8 1.9 Operational Definitions of Key Terms ............................................................................................9 CHAPTER TWO.............................................................................................................................. 10 LITERATURE REVIEW .................................................................................................................. 10 2.0 Introduction ................................................................................................................................ 10 vi 2.1 Theoretical Review ..................................................................................................................... 10 2.2 Conceptual Framework................................................................................................................ 12 2.3 Review of Related Literature ....................................................................................................... 12 2.3.1 Integrated Financial Management System .................................................................................. 12 2.3.1.1 Cash Management ................................................................................................................. 15 2.3.1.2 Budgeting ............................................................................................................................. 17 2.3.1.3 Accounting System ................................................................................................................ 20 2.3.2 Financial Reporting .................................................................................................................. 22 2.3.2.1 Consolidated Financial Statements.......................................................................................... 27 2.3.2.2 Joint Arrangement ................................................................................................................. 29 2.3.2.3 Disclosure of Interest in other Entities..................................................................................... 30 2.4 Related Studies ........................................................................................................................... 31 2.5 Gaps in the Literature .................................................................................................................. 34 CHAPTER THREE .......................................................................................................................... 36 METHODOLOGY ........................................................................................................................... 36 3.1 Introduction ................................................................................................................................ 36 3.2 Research Philosophy ................................................................................................................... 36 3.3 Research Design