Integrated Financial Management System and Financial Reporting In Selected Commercial Banks in Bujumbura, Burundi

Abstract

The quality and standard of financial reporting among Burundian commercial banks do not match the international standard of reporting in the banking sector of more developed countries. lack of clarity on the extent to which integrated financial management system influences financial reporting will therefore continue to inhibit common understanding and explanation which might deter financial reporting improvement in selected commercial banks in Bujumbura, Burundi.

The study analyzed the relationship between integrated financial management system  and financial reporting  in selected commercial banks in Bujumbura, Burundi and it was hypothesized that. Commercial banks have come under spotlight for cases of poor financial reporting standards. Lack of empirical studies to assess the impact of integrated financial management system on the financial reporting of commercial banks in Burundi is the motivation behind this study. Therefore, this study is important not only because it fills the gap, but also it set out to address this evident knowledge gap

 The study adopted phenomenological, epistemology and quantitative-qualitative methodology dimension with cross sectional and correlation designs. the unit of analysis was selected commercial banks, and employees were the units of inquiry. Hierarchical regression, linear regression analysis were used to test the predictive power of the variables and indicate precisely what happens to the model as different predictor variables are introduced in the model fit

The study revealed that cash management significantly affect the financial reporting of commercial banks (Adjusted R²=0.562, p=0.000). Furthermore, the study revealed that budgeting significantly affect the financial reporting of commercial banks Adjusted R²=0.439, p=0.000).In addition, the study found that accounting system significantly affect the financial reporting of commercial banks (Adjusted R²=0.612, p=0.000). The study concluded that IFMS influences financial reporting. The study recommended that the management of the banking industry should involve all the stakeholders in the development of cash management framework that is used in the planning, implementation, auditing, supervision, monitoring and maintenance of the IFMS to streamline all roles and responsibilities of all the users of the system so that no cash is mismanaged. Furthermore, the study recommended that the management of the banking industry should promote efficient and clear budgeting by incorporating it with the IFMS. In addition, the study recommended that commercial banks should adhere to strict IFMS guidelines such as payment terms, credit limit, and automatic voucher number. Similarly, the study recommended that the management of the banking industry should ensure that IFMS easily adapts to the changes in cash management, budgeting and accounting system practices without complete overhaul of the system so as to ensure efficient and timely financial reporting. The current study added to the body of knowledge that IFMS in terms of cash management, budgeting and accounting system are synonymous in ensuring clear and quality financial report.