FINANCIAL REPORTING TRANSPARENCY AND SHAREHOLDER INVESTMENT DECISIONS IN MANUFACTURING FIRMS IN UGANDA-A CASE STUDY OF QUALITY CHEMICALS INDUTRIES LIMITED

Abstract

This research examined the impact of the transparency of financial reporting on shareholder investment decisions within Uganda’s manufacturing industries, using Quality Chemical Industries Limited (QCIL) as the study focus. Utilizing a descriptive and correlational study design, incorporating a quantitative method, the study looks into the effect of the accuracy, timeliness, and completeness of financial disclosure on shareholder actions. Data was obtained from 189 respondents, comprised of 137 potential shareholders, 26 financial analysts, 6 investment managers and 20 other participants. The total sample population was 405 respondents. The total sample size was 242 respondents. Pearson correlation and regression tests indicate that the accuracy and completeness of financial disclosure significantly ensure shareholder investment choices, as indicated by positive association measures that show their effectiveness in minimizing asymmetries of information and boosting investor confidence. Worthwhile, timeliness of reporting is insignificant, thereby revealing that quality outruns speed for most shareholders. These results present an insightful picture of the essentiality of proper and extensive financial reporting for building confidence and making informed choices within Uganda’s manufacturing industries. It is recommended that manufacturing companies such as QCIL intend to define robust internal auditing processes, apply international reporting standards, and enhance disclosures for non-financial measures such as ESG factors. Moreover, an enhanced body of corporate governance, as well as investor enlightenment, can help reporting processes converge toward shareholder expectations. Future scholars can examine limited effects of reporting promptness and cross-comparison of transparency processes between various African countries to expand the body of knowledge on investor preferences within emerging nations.