Ethical leadership, audit quality, and financial reporting of local governments : a case of Bukedi sub region local governments.
No Thumbnail Available
Date
2026
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Busitema University
Abstract
The study investigated the mediating effect of audit quality in the relationship between ethical leadership and financial reporting in Bukedi LGs. The study was guided by the following objectives: to determine the effect of ethical leadership on financial reporting of LGs in Bukedi sub region; to assess the effect of ethical leadership on audit quality of LGs in Bukedi sub region; to examine the effect of audit quality on financial reporting of LGs in Bukedi sub region; and to establish the mediating effect of audit quality in the relationship between ethical leadership and financial reporting of LGs in Bukedi sub region. A cross-sectional research design was adopted for this study using a quantitative approach. Data was collected through a questionnaire tool from a sample of 117 LGs in Bukedi sub-region. The study found that ethical leadership positively and significantly affect financial reporting; the study findings also showed that ethical leadership positively and significantly affect audit quality; the study further revealed that audit quality positively and significantly affect financial reporting; and finally, the mediation effect of audit quality in the relationship between accounting information system and financial reporting was found to be partial. The study was rooted on the stewardship theory by Davis and Donaldson (1997) and the social exchange theory by Blau (1964). The study further concluded that while ethical leadership independently influences financial reporting, its effect is strengthened when supported by strong audit mechanisms that operates at the level of verification and enforcement providing independent scrutiny, technical expertise, and a deterrent effect against both deliberate fraud and unintentional error. The study therefore recommended that LGs should institutionalize regular monitoring and evaluation mechanisms by embedding ethical leadership and audit quality into their governance frameworks so as to foster a culture of integrity that reduces managerial manipulation, while rigorous audits ensure financial data accuracy, thereby enhancing transparency and stakeholder trust in its financial reporting.
Description
Dissertation
Keywords
Citation
Tino, P. N. E. (2026). Ethical leadership, audit quality, and financial reporting of local governments : a case of Bukedi sub region local governments. [Unpublished dissertation]. Busitema University.