Corporate governance and compliance with IFRSs: the case of Tanzanian Savings and Credit Cooperatives

Figures & data

Table 1. Tanzania SACCOs Legal and Regulatory Framework.

Legislation	Nature of Regulation	Specific issues to note in improving IFRSs Compliance
The Cooperative Audit and Supervision Act No. 15 of 1982, amended in 2005.	All cooperatives must be audited by COASCO. Private audit firm must be approved by registrar	Emphasis the compliance with IFRSs, SACCOs are audited based on accounting standards.
The Cooperative Societies Act, 2013 (Cap 112).	Registration of all types of cooperatives including SACCOs	It provides emphasis on preparations of financial reports based on IFRSs
The Savings and Credit Cooperative Societies Regulations of 2016	It regulates SACCOs licensing, inspection and supervision of product offered	It provides emphasis on compliance with standard on financial reporting
The Microfinance Act, No. 10 of 2018.	It regulates the licensing of all types of MFIs including SACCOs	The law requires the MFIs including SACCOs to provide financial reports based on accounting standards.
The Microfinance (SACCO) Regulations, 2019.	It regulates SACCOs licensing, inspection and supervision and consumer protection of SACCOSs products	Appointment and outsourcing of internal auditor to improve financial reporting process.

Source: Author conception from different Tanzania cooperative laws.

Table 2. Operationalization of the study variables.

Variable	Measurement	Source of data	Literature source
Dependent variables
IFRS Compliance Index (CINDEX)	Measured in percentage (extent) of total number of disclosed items divided by the total applicable presentation and disclosure requirements	Annual report of SACCOs (2013–2020)	Kaaya (2019), Alnaas (2017), Sellami and Tahari (2017), Alfraih (2016), Al-Sartawi et al. (2016), Okafor et al. (2016).
Independent variables
Board size (BSZ)	Measured as the total number of board directors	Annual report of SACCOs (2013–2020)	Agyei-Mensah (2017), Alnaas and Rashid (2019), Alfraih (2016); Barbu et al. (2014); Matolcsy et al. (2012)
Board Skills (BSK)	Measured as the proportion of members with an accounting knowledge and skills to the total board members	Annual report of SACCOs (2013–2020)	Mnif and Znazen (2020), Fama and Jensen (2019), Juhmani (2017); Alfraih (2016), Al-Shammari (2014), Kent and Stewart (2008)
Board Gender Diversity (BGDIV)	The number of female members as a percentage (%) of the total number of members on the board	Annual report of SACCOs (2013–2020)	Kaaya (2019), Alnaas, 2017), Sellami and Tahari (2017), Agyei-Mensah (2017)
Board Meetings (BDM)	Measured by the number of board meetings per year	Annual report of SACCOs (2013–2020)	Alnaas and Rashid (2019), Alfraih (2016), Barbu et al.(2014); Matolcsy et al. (2012), Al-Shammari et al. (2008).
Supervisory Committee Skills (SCSK)	Measured as the proportion of members with an accounting knowledge and skills to the total board members	Annual report of SACCOs (2013–2020)	Mnif and Znazen (2020), Fama and Jensen (2019), Juhmani (2017), Alfraih (2016), Al-Shammari (2014), Kent and Stewart (2008)
Control variables
SACCO Age (AGE)	Measured as the number of years since foundation to the end of 2020	Annual report of SACCOs (2013–2020)	Almujamed and Alfraih (2020), Alnaas and Rashid (2019), Al-Shammari et al. (2008)
SACCO Size (SIZ)	The natural log of total assets will be used to measure it.	Annual report of SACCOs (2013–2020)	Alnaas and Rashid (2019), Alfraih (2016), Barbu et al.(2014), Matolcsy et al. (2012), Al-Shammari et al. (2008).

Table 3. Descriptive statistics for the dependent and independent variables.

Variable	Obs	Minimum	Maximum	Mean	SD	Skewness	Kurtosis
Dependent variable
CINDEX	1616	0.3	0.711	0.442	0.108	1.19	2.61
Independent variable
Board Size (#)	1616	3	10	6	1.511	0.46	2.58
Board Skills (%)	1616	0	0.6	0.286	0.153	0.48	2.83
Board Gender Diversity (%)	1616	0	87.5	34.61	17.72	0.81	2.93
Board Meetings (#)	1616	4	12	6	2.022	0.86	3.07
Supervisory Committee Skills (%)	1616	0	0.523	0.305	0.131	1.01	3
Control variables
SACCOs Age (#)	1616	3	48	14	11	−0.94	3.06
SACCOs Size (#)	1616	7.216	12.072	9.651	1.328	0.96	3.14

Source: Field Data.

Table 4. Correlations matrix.

	Variables	1	2	3	4	5	6	7	8	VIF
1	CINDEX	1
2	Board Size	−0.0396	1							1.128
3	Board Skills	0.146***	0.0264	1						1.064
4	Board Gender Diversity	0.0992**	−0.00061	−0.0553	1					1.057
5	Board Meetings	−0.0192	0.110**	0.00544	−0.146***	1				1.029
6	Supervisory Committee Skills	0.0388	−0.0714**	0.0625	0.00345	0.0699	1			1.057
7	SACCOs Age	0.122***	0.0528	0.226	−0.0802*	−0.184***	0.0845*	1		1.108
8	SACCOs Size	0.174***	−0.0957**	0.0313	0.217***	−0.111**	−0.0127	0.106**	1	1.017

***, ** and * represents significance level at 1, 5 and 10%.

Table 5. Regression results Corporate Governance characteristics and CINDEX.

Variables	Predicted sign	Coefficient	p-value	VIF
Board Size	+	−0.005	0.1821	1.128
Board Skills	+	0.0749***	0.0012	1.064
Board Gender Diversity	+	0.2096***	0.0024	1.057
Board Meetings	+	−0.0131	0.1758	1.029
Supervisory Committee Skills	+	0.3393***	0.0033	1.057
Saccos AGE	+	0.0134	0.1234	1.108
Saccos SIZE	+	0.0874**	0.0014	1.017
Constant		1.8003***	0.0011
Observations		1,605
R-squared		0.1789
Adjusted R 2		0.1497
F- statistics		6.42
Number of Unique_ID		201
Mean VIF				1.066

Notes: ** and *** denote significance at the 5 and 1% levels, respectively.

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Data availability statement

The data set for this study will be available upon reasonable request.