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The Intervening Effect of Internal Controls on the Relationship Between Budgeting Process and Performance of Churches in Kenya

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  • Norman Gachoka
  • Josiah Aduda
  • Erasmus Kaijage
  • Kennedy Okiro

Abstract

Budgeting process and internal control are essential components of the financial management of an organization. The study sought to establish the intervening effect of internal control on the relationship between budgeting process and performance of Churches. Study findings have reported conflicting findings on the effectiveness of budgeting process and internal controls in Churches. Little attention has been paid to internal control as an intervening variable to budgeting process and performance of religious organizations such as Churches. Furthermore, not many studies linked budgeting process and internal controls to the performance of churches, and none combined the three variables in one study. It was hypothesized that there is no intervening effect of internal controls on the relationship between budgeting process and performance of Churches in Kenya. The study used positivistic research design and descriptive design. Collected data from 104 Churches in Kenya were analyzed using statistical tests and correlational analysis. Multi regression analysis was used to test the hypothesis. This study finds that Internal Controls have intervening effects on the relationship between budgeting process and the performance of churches in Kenya. The study further found that budgeting process and internal controls are adequately practiced in Kenyan Churches resulting to a positive effect on their performance. The study recommends that Churches integrate internal controls in the budgeting process for them to experience greater membership growth. Furthermore. Umbrella bodies should consider budgeting process and Internal Controls as they develop training materials for membership growth strategies. JEL classification numbers: H110, H610

Suggested Citation

  • Norman Gachoka & Josiah Aduda & Erasmus Kaijage & Kennedy Okiro, 2018. "The Intervening Effect of Internal Controls on the Relationship Between Budgeting Process and Performance of Churches in Kenya," Journal of Finance and Investment Analysis, SCIENPRESS Ltd, vol. 7(2), pages 1-4.
    • Handle: RePEc:spt:fininv:v:7:y:2018:i:2:f:7_2_4
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    References listed on IDEAS

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    1. Lau, Chong M. & Sholihin, Mahfud, 2005. "Financial and nonfinancial performance measures: How do they affect job satisfaction?," The British Accounting Review, Elsevier, vol. 37(4), pages 389-413.
    2. Shields, J. F. & Shields, M. D., 1998. "Antecedents of participative budgeting," Accounting, Organizations and Society, Elsevier, vol. 23(1), pages 49-76, January.
    3. Vincent Okoth Ongore & Gemechu Berhanu Kusa, 2013. "Determinants of Financial Performance of Commercial Banks in Kenya," International Journal of Economics and Financial Issues, Econjournals, vol. 3(1), pages 237-252.
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