Internal Control Systems and Revenue Collection A Case of Uganda Revenue Authority, Bushenyi Branch

ABSTRACT 

This study was done to establish the relationship between internal control systems and revenue collection in Uganda, through a case study of Uganda Revenue Authority (URA) Bushenyi Branch. The objectives of the study were; to find out the relationship between the control environment and revenue collection at URA, Bushenyi Branch, to establish the relationship between risk assessment and revenue collection at URA, Bushenyi Branch, and to establish the link between control activities and revenue collection at URA Bushenyi Branch. The researcher used cross sectional and co-relational research designs. A representative sample of 38 respondents was selected to represent the entire study population of 42 people. The researcher used both questionnaires and interviews to collect data. The collected data was properly processed and analysed by using two computer packages; MS Excel and SPSS version 17.0 to generate tables and statistics that enabled the researcher to draw conclusions from the analysed data. The researcher established that in the opinion of 59.5% of the study respondents, revenue at URA, Bushenyi branch was moderate. The researcher established that there was a significant relationship between the control environment and the level of revenue collection at URA, Bushenyi Branch, The study also revealed that there was no significant relationship between risk assessment and revenue collection at URA, Bushenyi Branch. Finally, the researcher Ibund out that there was a significant relationship between the control activities and revenue collection at URA, Bushenyi Branch. Therefore, basing on the study findings, the researcher established that only two variables of internal control systems namely control environment and control activities had a significant relationship with revenue collection at URA. Bushenyi Branch. From the study findings, the researcher recommended that URA management and BOD should always monitor and supervise its employees since it was found out that revenue collection depended on proper and close supervision of junior staff at URA, the ICT department should strive to continually upgrade the systems so as to keep the systems well updated with the growing capacity of operations and the provision of early attention to any system challenges. The researcher further suggested that a detailed study may be done on the effect of risk assessment on revenue collection in URA.

TABLE OF CONTENT

DECLARATION .1

APPROVAL

DEDICATION

ACKNOWLEDGEMENTS

LIST OF TABLES

LIST OF FIGURES

LIST OF ACRONYMS

ABSTRACT

CHAPTER ONE

GENERAL INTRODUCTION 1

I .0 Introduction

• I Background to the Study 1

1.1 . I Historical perspective

1.1 .2 Theoretical perspective 3

1.1.3 Conceptual perspective 4

• I .4 Contextual perspective 6

1.2 Statement ofthe Problem 7

1.3. Purpose ofthe Study 7

1.4. Objectives ofthe Study 8

1.5. Research Hypotheses 8

1 .6. Scope ofthe Study 8

1.6.1 Content scope 8

l.6.2Areascope 8

1.6.3 Time scope 8

1 .7. Significance ofthe Study 9

1 .8 Conceptual Framework 10

CHAPTER TWO 11

LITERATURE REVIEW 11

2.0. Introduction II

2.1 Conceptual review of Internal control Systems and Revenue collection 12

2.2 Control Environment and Revenue collection 17

2.3 Risk Assessment and Revenue collection 1 8

2.4 Control Activities and Revenue collection 19

2.5 Synthesis of Literature 19

CHAPTER THREE ~21

RESEARCH METHODOLOGY 21

3.0 Introduction 21

3.1 Research Design 21

3.2 Study Population 21

3.3. Sampling and Sample Size 21

3.4 Data Sources 22

3.4.1 Primary data 23

3.4.2 Secondary data 23

3.5 Data Collection Procedures 23

3.6 Data Collection Instruments 23

3.7 Quality Control 24

3.7.1 Validity ofthe instrument 24

3.7.2 Reliability ofthe instrument 24

3.8 Data Processing and Analysis 25

3.8.1 Data editing 25

3.8.2 Data presentation and analysis 25

3.8.3 Data interpretation 25

3.9 Ethical Consideration 26

3.9.1. Informed consent 26

3.9.2. Privacy and confidentiality 26

3.9.3. Anonymity 26

3.9.4. ResearcherTh responsibility 26

3.9.5 Benefits and risks 26

3.10 Limitations and Delirnitations ofthe Study 26

CHAPTER~FOUR 28

DATA PRESENTATION, ANALYSIS AND INTERPRETATION 28

4.0 Introduction 28

4.1 Demographic Characteristics of Respondents 28

4.3 Descriptive Statistics on Revenue Collection 30

4.4 The Control Environment and Revenue Collection at URA, Bushenyi Branch 3 1

Table 4.4.1: Descriptive statistics on control environment variables and revenue collection 31

4.2.3 The relationship between Control Environment and Revenue Collection at URA, Bushenyi Branch 35

4.3 Risk Assessment and Revenue Collection at URA, Bushenyi Branch 35

4.3.1 The relationship between risk assessment and revenue collection in URA, Bushenyi Branch. 40

4.4 Contr6l Activities and Revenue Collection at URA. Bushenyi Branch 40

4.4.1 The relationship between control activities and revenue collection 43

CHAPTER FIVE 45

DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS 45

5.0 Introduction 45

5.1 Discussion 45

5.1.1 Relationship between control environment and revenue collection at URA, Bushenyi Branch. 45

5.1.2 Relationship between the Risk Assessment and Revenue Collection 47

5.1 .3 Relationship between the control activities and revenue collection 49

5.2 Conclusion 49

5.3 Recothmendations 51

5.4 Areas for further Research 51

REFERENCES 52

APPENDICES

Appendix 1: Informed Consent Form ss

Appendix II: Questionnaire for Respondents 56

Appendix Ill: Interview Guide 60

Appendix IV: Introductory Letter 62