Department of Accounting

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Accounting and navigating legitimacy in NGO's
(2005) Assad, Mussa Juma; Goddard, Andrew
Accounting and navigating legitimacy in Tanzanian NGOs
(Emerald Group Publishing Limited, 2004) Goddard, Andrew; Assad, Mussa Juma
This paper investigates the phenomenon of accounting in non-governmental organisations (NGOs). It seeks to understand accounting processes and reporting practices in NGOs and the conditions that sustain those processes and practices. NGOs have become important institutions in world affairs but accounting research has not developed significant interest in their operations. Premised on an interpretive theoretical orientation this research executes a grounded theory strategy as the principal line of inquiry (Strauss and Corbin, 1990; 1998). Fieldwork was undertaken in three Tanzanian NGOs. The research established the importance of accounting in the process of avigating organisational legitimacy. This was achieved due to its important role in symbolising organisational competence. When accounting was perceived to be adequate, organisational legitimacy was enhanced. Two principal strategies were employed by organisations in navigating legitimacy - building credibility and bargaining for change. Although accounting emerged as predominant in the process of navigating legitimacy, its importance was symbolic rather than functional. Indeed accounting had little relevance to the internal management of the organisations.
Accounting choices and their determinants in Oil and Gas Activities of Global Major Companies
(Business Management Review, 2019-01) Chalu, Henry
One of the two objectives of this study was to determine whether there is significant variation in accounting treatment choice of oil and gas activities of major oil and gas companies, and the second objective was to identify critical factors for accounting choice. To achieve the objectives, the study collected data from 25 major oil and gas companies using a checklist of items (index) which was used to review accounting policies covered by the financial statements of these companies. The data collected was analysed using both descriptive and inferential statistics whereby non-parametric tests were used. The study findings show that in case of accounting treatment choices, there are significant variations in accounting treatment on oil and gas activities. In case of determinants, the study found that company size has influence on initial measuring decommissioning liability, using proved reserves as basis for unit of production, using fair value as well as recognition of both cash payments and value of future assets in case of unproven reserves. Company location was found to have influence on use of LIFO to value inventories, not recognising deferred taxes at initial recognition of decommissioning liability, use of proved reserves as a basis for unit of production, recognition cash payments received only in case of unproven reserves, as well as application of successful efforts method. Duration was found to influence the use of reducing balance method to depreciate its assets as well as not recognising deferred taxes at initial recognition of decommissioning liability. The study suggests that accounting standard setters have to strike a balance between harmonisation and accounting flexibility, to ensure that accounting data is both comparable and informative.
Accounting Ethics: A Study of Professional independence Status of Accounting Firms in Botswana
(2004-09) Kitindi, Ernest G.
The purpose of this study was to determine if auditing firms in Botswana have begun to provide services beyond traditional auditing. It also sought to establish whether income from such services was significant compared to income from auditing, and whether audit firms in Botswana have in place mechanisms to assure quality audit work. In view of these, an attempt was made to establish the professional independence status of Botswana public auditors.Data for the study was collected from thirteen audit firms on the basis of the register of auditors maintained by the Botswana Institute of Accountants. The results showed that audit firms in Botswana provided other services beyond the traditional audit work. The collective income obtained from these other services exceeded that generated by professional audit work. We also found that audit firms had some mechanisms in place to ensure quality audit work. However, most of the audited companies did not use audit committees and the audit firms did not recommend their use. The evidence was not sufficient to explicitly judge independence, but the results suggested that perceived auditor independence could be affected.
Accounting in non-governmental organisations: towards a theory of navigating legitimacy
(2001) Assad, Mussa Juma
Accounting Information Systems and Governance Issues in Local Government Authorities in Tanzania
(2015) Chalu, Henry; Kessy, Severine S. A.
Among the strategies identified by MKUKUTA to improve good governance in Local Government Authorities (LGAs) in Tanzania are those concerned with strengthening financial management, accounting, financial reporting, auditing and budgeting. The opinion is that strengthening those processes requires an effective accounting information system (AIS). Therefore this study had two aims; first to explore the role played by AIS in promoting accountability, participation, predictability and transparency; and second to identify factors influencing the effectiveness of AIS in fulfilling those roles. To achieve these objectives, the data analysed were collected from four LGAs through 23 interviews, 3 focus group discussions and documentary analysis. The findings show that AIS plays a minimum role in the achievement of good governance and the reasons for this are also identified. The study recommends that to achieve good governance, there is a need to design and install AIS that includes good governance components.
Accounting Practices in Tanzanian Local Government Authorities: Towards a Grounded Theory of Manipulating Legitimacy
(Emerald Group Publishing Limited, 2015) Goddard, Andrew; Mzenzi, Siasa I
Purpose-This paper examines accounting practices and legitimacy in Tanzanian Local Government Authorities (LGAs). Methodology/approach-It uses data from multiple sources, including interviews, observations and documents, to provide theoretical and practical understanding on how accounting has been practiced and the conditions which sustain its undertaking. It applies a grounded theory method to develop a theory systematically from the raw data. Findings-The principal research ﬁndings from the data concern the central phenomenon of ‘manipulating legitimacy’. This involved the purposeful and deliberate use of accounting techniques to inﬂuence and control (and sometimes even to falsify) the perceived reasonableness of the Councils’ operations. The paper revealed that the effective operations of the Tanzanian LGAs were highly constrained by their context. This had forced the LGAs’ ofﬁcials to use important accounting practices such as budgeting, ﬁnancial reporting, auditing and performance measurement, to manipulate the organisational legitimacy, a process which ensured the availability of resources to both LGAs and the individual ofﬁcials. Research limitations/implications-The main limitation of the research is that the data was collected from a limited number of local authorities in just one developing country. It is hoped that future research in other developing countries will be undertaken to broaden and deepen our understanding.
Adoption and Implementation of Epicor Accounting System in the Two Tanzanian Local Government Authorities: A New Institutional Sociology Perspective
(2015) Mzenzi, Siasa I
This is one of the series of papers emanating from the study of accounting practices in the Tanzanian Local Government Authorities (LGAs). In particular, it traces the adoption and implementation of EPICOR accounting system in the two Tanzanian LGAs. The paper theorises the adoption process and subsequent implementation of the system to the studied organizations using data from multiple sources, including interviews, observations, and documents. The paper finds that the adoption and implementation of EPICOR accounting system was mainly influenced by the Government and donors. This was mainly motivated by an attempt to integrate public financial management systems and to enhance budgetary and financial controls at the LGAs. However, lack of supporting environment and limited functions of the system had forced LGAs’ officials to maintain it in a loosely coupling state. In the light of New Institutional Sociology (NIS), the findings support Oliver’s (1991) assertion that actors are not passive adopters of the institutional pressure. Therefore, in order to ensure effective implementation of the adopted structures and systems in the institutionalized organizations like the studied LGAs, contextual factors and their related consequences need to be considered and modeled accordingly.
Adoption and Implementation of New Public Management Accounting Reforms in the Public Sector Organisations of Developing Countries (Motive, Nature and Theoretical Philosophy)
(The Addis Ababa International Conference on Business and Economics (AAICBE), 2017-12-17) Mbelwa, Latifa
The paper reviews motives, nature and theoretical philosophy along the adoption and implementation stages of New Public Management (NPM) - accounting reforms in the Public sector of developing countries. The paper finds the main motive along the stage of adoption and implementation of NPM accounting reforms is characterized with an aspect of gain legitimacy of accessing the financial support from donors of different levels who create coercive and normative pressure of increasing efficiency in public sector operations. Among others the nature of NPM reforms which undertaken by public sector of developing countries is mostly focused to the accounting and at most accrual accounting systems. The theoretical philosophy pertains the adoption and implementation of NPM reforms in the sector is focused on New institutional theory which argues that adoption and implementation is contributing more by external environment pressures with coercive, normative and mimeticmechanisms; in which public sector of developing country organizations tend to respond them in order to gain financial resources. This resulted intoo little internal efficiency due to manipulation and loose coupling practices by the public sector actors in daily operations. Therefore, in order to effectuate implementation and success of the practices of NPM accounting reforms in the developing country public sectors, the adoption motive should be developed from internal structure and demand for efficiency with political will and coexisting of pressure from both internal and external institutionalized environments.
Analysis of Stakeholder Factors Influencing the Effectiveness of Accounting Information Systems in Tanzania's Local Authorities
(University of Dar es Salaam Business School, 2012) Chalu, Henry
This paper assesses the stakeholder-related factors which influence Accounting Information Systems (AIS) effectiveness in Tanzania’s Local Authorities (LAs). Using data collected from 19 LAs in Tanzania, we tested six factors: management support, qualification of accounting staff, education of councilors, and availability of AIS consultants, external auditor specialization and councilors’ involvement in AIS matters using canonical correlation analysis (CCA). The results from CCA show that management support, external auditors’ specialization and councilors’ involvement are the most critical factors in ensuring AIS effectiveness in the country’s local authorities. Next were the qualifications of accounting staff and the education level of councilors, which were established as strong factors for AIS effectiveness in LAs. The study, therefore, concludes that for LAs to have effective AIS they need to take measures such as recognizing the importance of AIS effectiveness in organizational operations, allocate sufficient resources and time for the development and implementation of AIS, provide training on computerized AIS, attract qualified personnel as well as raise the mandatory minimum education level requirement for LA councilors.
Antecedents of Perceived Auditors’ Power Deterioration Vis-A-Vis Pressure Groups’: Dar-Es-Salaam Case Study
(World Business Conference, 2015-04-22) Bahati, Victor; Bahati, Victor
The purpose of this paper was to test the usefulness of auditors versus pressure groups power in enforcing accountability in public sector. It explored potential reasons that make pressure groups seemingly more powerful compared to auditors.It draws much knowledge from mobilization and lobbying model while using key literatures in the expectation gap. The paper demonstrates mobilization and lobbying model and uses data, collected from Dar es Salaam, to test significance of difference in perception between accountants and non-accountants towards pressure groups. Many-Whitney U-test has been used as a technique of testing similarity between the two groups and factor analysis as a method of finding underlying factors for pressure groups popularity over auditors. The outcomes of this study have verified that both accounting and non-accounting professionals have trust to auditors for power to influence accountability of public sector. Further, the study finds out three factors that make pressure groups more popular in the eyes of people. These factors have been identified as; first, kind of evidence that auditors seek, second, execution outcome and types of actors involved and third exposure of reports and ethical issues. Measures like educating the public on the expected role of auditors and provide for expanded audit reports by means of changing standards could best be used to reduce such perceptions. The study focuses on a single case and therefore it may not be appropriate to generalize findings in different political and cultural settings.
ANTECEDENTS OF PERCEIVED AUDITORS’ VIS-À-VIS PRESSURE GROUPS’ POWER IN PUBLIC SECTOR: A CASE STUDY OF DAR ES SALAAM
(University of Dar es Salaam Business School, 2017-06-30) Bahati, Victor
This paper examines the usefulness of auditors-versus-pressure groups’ power in enforcing accountability in the public sector. The paper demonstrates mobilisation and lobbying model and uses data, collected from Dar es Salaam, Tanzania, to test the significance of difference in the perception of accountants and nonaccountants of the pressure groups. Many-Whitney U-test was used to determine the similarity between the two groups, with the factor analysis being deployed to establish the underlying factors for pressure groups’ popularity over auditors. The study found three reasons that make pressure groups more popular in the eyes of the people. The first reason is the kind of evidence that auditors seek; the second is the execution outcome and types of actors involved; and third is the exposure of reports and ethical issues. The paper is based on the findings of a study that focused on a single case and, therefore, it may not be appropriate to generalize findings in different political and cultural settings without qualification.
ANTECEDENTS OF PERCEIVED AUDITORS’ VIS-À-VIS PRESSURE GROUPS’ POWER IN PUBLIC SECTOR: A CASE STUDY OF DAR ES SALAAM
(Business Management Review, 2017-06-30) Bahati, Victor
This paper examines the usefulness of auditors-versus-pressure groups’ power in enforcing accountability in the public sector. The paper demonstrates mobilisation and lobbying model and uses data, collected from Dar es Salaam, Tanzania, to test the significance of difference in the perception of accountants and nonaccountants of the pressure groups. Many-Whitney U-test was used to determine the similarity between the two groups, with the factor analysis being deployed to establish the underlying factors for pressure groups’ popularity over auditors. The study found three reasons that make pressure groups more popular in the eyes of the people. The first reason is the kind of evidence that auditors seek; the second is the execution outcome and types of actors involved; and third is the exposure of reports and ethical issues. The paper is based on the findings of a study that focused on a single case and, therefore, it may not be appropriate to generalize findings in different political and cultural settings without qualification.
Appeal for Pragmatic Research in Emerging Economies: Findings from an Analysis of the Business Management Review (BMR) Journal Articles, 1993-2014
(University of Dar es Salaam Business School, 2015-01) Mzenzi, Siasa I
This paper reports the findings stemming from a review of 97 articles published in the Business Management Review (BMR), a journal hosted by the University of Dar es Salaam Business School (UDBS) of the University of Dar es Salaam (UDSM), Tanzania. The overall aim of the review is to present the status of the published papers and their research implications in the context of emerging economies. The papers were classified and analysed according to research discipline, research settings, theoretical approach, nature of research, methodological approach, research methods, research location, residency (institutional affiliation), and number of authors. As part of corroborative evidence, semi-structured interviews with the chief editors, members of the editorial board, the journal administrator, and selected authors were conducted. The findings show that papers from three disciplines—economics finance, and entrepreneurship have higher representation in the journal than other disciplines. Also, a sizeable number of the papers reviewed focus on Small and Medium Enterprises (SMEs). Furthermore, very few papers extensively discuss theoretical issues underpinning a study under consideration. The review further shows that most of the reviewed papers are quantitative in nature and used questionnaires as the main data collection method. On the basis of these findings, the paper suggests embracing and fostering paradigmatic research in the context of emerging economies, using a broad set of theories, methodologies, methods, and research topics. In terms of resource dependency theory, the findings partly suggest that research and its dissemination in the emerging economies is dependent upon the influence of international research funding agencies. Thus, to enhance paradigmatic research in the emerging economies it is equally important for local institutions to spearhead research initiatives.
Assessing the Relationship between Human Resource Strategies and Local Content in Tanzania Oil and Gas Industry
(Maxwell Scientific Organization, 2015-08-15) Kalufya, Nuru; Michael, Francis; Chalu, Henry
Localisation of workforce is the major driving force for Human Resource Strategies in the OG Industry. However implementation of local content policy in the industry is facing major challenges. This study focused on assessment of HR strategies used in implementing the localisation in OG industry and also to determine the factors affecting localisation of Human Resource in the industry. Four case studies selected from the industry were employed to collect in-depth information. The study finds that all of the cases studied companies seem to be committed to local content policy. However it was observed that the practicability of their commitment to local content compliance was facing challenges during the implementation as there is a lack of locals with the needed qualifications in the industry, there are no local training institutes specialized in Oil and Gas, also many of the companies in the industry in Tanzania are new and some in early stages of their operations. It was further observed that local businesses are facing the same challenges of qualifications of locals and their business in rendering the services as per international or desired standards. Lack of localisation related HR Strategies and Government system support and commitment to the localisation seems to be the main factors affecting the localisation of Human resource in Tanzania. So in order for the Local content to be achieved, Human Resource strategies has to be localisation related and the Government has to be fully committed and support the localisation in the industry.
ASSESSMENT OF FACTORS THAT INFLUENCE MANAGEMENT RELIANCE ON INTERNAL AUDIT FUNCTION: EVIDENCE FROM OIL AND GAS COMPANIES OPERATING IN TANZANIA
(Business Review Management Journal, 2019-03) Mbelwa, Latifa; Munyangabi, Lenatusi
The study investigated factors that influence reliance by senior management over internal audit function in the Tanzanian oil and gas companies. The research applied positivism paradigm, and it involved 17 oil and gas companies operating in Tanzania Mainland. Forty-two (42) questionnaires were returned out of fifty one (51) which had been administered to Chief Executive Officers (15), Chief Finance Officers (10) and Members of Audit Committee (17). Data analysis was performed specifically to identify the modelling and relationships of both dependent variable (reliance of internal audit function) and independent variables (communication, independence, objectivity, competence, work performance). The study found that the senior management personnel (CEOs, CFOs and Members of the Audit Committee) were seen to have overall reliance on works of their internal audit functions whereas some differences were revealed between propositions on competence requirements in the oil and gas sector and non-oil sectors. The study further revealed lack of significant independence of internal auditor’s function and interference of senior management in day-to-day operations of the internal audit department. The study generally recommends re-examination of the position of internal audit function in the studied oil and gas companies.
Audit Quality Differences amongst Audit Firms in a Developing Economy: The Case of Uganda
(Emerald Group Publishing Limited, 2016-08-08) Kaawaase, Twaha K.; Assad, Mussa Juma; Kitindi, Ernest G.; Nkundabanyanga, Stephen Korutaro
Purpose To report findings of audit quality differences amongst audit firms in a developing country. Specifically, we examine the assumption of marked audit quality differences amongst large audit firms (Big 4s) and the Small and Medium Practices (SMPs). Design/methodology/approach First, we develop scales for assessing perceived audit quality in the financial services sector based on qualitative data obtained from 106 audit practitioners, 31 Credit Analysts and 13 Board members. We use NVivo© to analyse the 13 transcribed interviews and follow ‘cross-case analysis’ to visualise dimensions and scales of audit quality. Then we use measurement scales developed and obtain quantitative data from 183 board members and top executives in the financial services sector and test for perceived audit quality differences amongst audit firms using a Mann-Whitney U test. Findings Our findings suggest that audit quality is a multi-dimensional construct comprising of levels of discretionary accruals; compliance of audited accounts to accounting standards, law and regulations; and audit fees. Based on these measures, we find that Big 4 audit firms ensure more compliance with accounting standards, Law and other regulatory requirements than SMPs. However, taking all the three audit quality dimensions together reveals no significant differences in audit quality levels between Big 4 and SMPs. Research limitations/implications In terms of auditor selection and retention, it is important that audit firms are assessed based on their ability to constrain discretionary accruals, to produce audited accounts that comply with requirements of accounting standards, the law and regulations; and to examine the fees they charge in relation to quality of service, than on their size. Also, as the results of this study suggest that Big 4 audit firms might be needed for compliance with accounting standards, Law and other regulatory requirements, their audit ties in with the most basic level of auditing requiring probity and legality which, in practice, requires a low level of judgement to be exercised by those performing the audit. It might be useful for Big 4 and other audit firms to embark also on higher level of auditing requiring higher level of judgement. Future research may wish to examine auditing firms’ proclivity to higher-level judgment audit. Originality/value Previous research reveals no consistent way of measuring audit quality and has been inconclusive on the subject of audit quality differential amongst audit firms. We create audit quality scales which can be used in assessing perceived audit quality in a developing country context and provide initial evidence of no significant differences between large audit firms and the Small and Medium Practices regarding audit quality in Uganda.
Critical External Institutional Pressures towards Effective Implementation of IFRS in the Tanzanian Private Hospital Sector
(2020-01-20) Mbelwa, Latifa; Mahangila, Deogratius Ng‘winula
Critical External Institutional Pressures towards Effective Implementation of IFRS in the Tanzanian Private Hospital Sector Latifa Hamisi Mbelwa16 Deogratius Ng‘winula Mahangila17 Abstract This paper reports the findings of a study that investigated the critical external institutional pressures-related factors in emerging economies that influence the effective implementation of International Financial Reporting Standards in the private hospital sector. The study had employed an explanatory research design that entailed the collection of 72 questionnaires from ten major private hospitals in Tanzania. The data were then subjected to multiple linear regressions. The study established four critical external factors to influence the effective implementation of International Financial Reporting Standards. These factors are pressure from successful hospitals; pressure from lending and financial institutions; International Financial Reporting Standards requirements; and the National Board of Accountants and Auditors’ pronouncements. In the meantime, pressure from donors and the Tanzania Revenue Authority seemed to have moderate and weak influences, respectively. In a broad sense, the findings revealed the role of New Institutional Sociology in advocating for the influence of coercive pressures associated with financial resources dependence from lending institution; and normative institutional pressures associated with the role of local and international accounting boards in issuing pronouncements. However, the strong influence comes from memetic pressures associated with the modelling of successful organisations practices through employees transfer and turnover in such competitive and private natural environment, which result in the shaping of the private hospital sector towards effective implementation of International Financial Reporting Standards. On the whole, the paper highlights critical external institutional pressures for International Financial Reporting Standards effective implementation in an emerging economy using the case of Tanzania in which the private hospital sector is backing the public hospital sector. Keywords: International Financial Reporting Standards, Institutional Pressures, Private Hospital Sector and New Institutional Sociology
Determinants of Pension Benefits Portability in Tanzania
(2013) Chalu, Henry; Mbwile, Patrick
This study attempts to identify determinants of pension funds benefits portability in Tanzania. This study used primary data collected from 100 members of pensions schemes through questionnaire. Utilizing regression analysis, this study examines the influence of administrative costs, information availability, pension funds, membership and economic factors on members’ preferences for portable pension schemes in Tanzania. The results reveal that factors that significantly influence the portability of pension funds include pension schemes factors, member factors and economic factors. The study recommends that to make effective portability regulators should design portability policies that are beneficial to both pension schemes and members. Likewise, policies should take into consideration economic factors. One limitation of this study is that data collected from a small sample and only five factors were tested. Hence, future studies can use large numbers and test more factors.
Earnings Management on the Verge of Privatization: The Case of Air Botswana
(2006-12) Kitindi, Ernest G.
Privatization is often associated with a change in the management of the company, which means existing management might consider such news adversely. Available literature suggests that the management may respond by indulging in earnings management. This study seeks to establish whether this is applicable to the case of Air Botswana. Using data from Air Botswana, the first parastatal that was put in the privatization process, the study tests for evidence of earnings management in the period surrounding the announcement of privatization. The equality of performance and expenditure in the period prior to and after the privatization announcement was tested. The results largely suggest the absence of any significant difference in performance and expenditure between the two periods. Where differences are suggested, the change is for the betterment of the company. The study finds little evidence to suggest that management indulged in earnings management. However, the government action to restructure the company before inviting prospective investors is considered to be consistent with earnings management. It is opined that the findings of this study are indicative of what could be the situation surrounding privatization, and suggests a similar study at a later stage including more parastatals that are being privatized.

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