Authors : MURUNGI Joyce; Dr. Thomas TARUS

Volume/Issue : Volume 7 - 2022, Issue 11 - November

Google Scholar : https://bit.ly/3TmGbDi

Scribd : https://bit.ly/3nm7h1x

DOI : https://doi.org/10.5281/zenodo.7768986

Abstract : - Accounting ethics is an important element for enhancing the quality of financial reporting in commercial banks because it requires bank staffs to exercise integrity, objectivity and professional competence and due care. This study sought to examine the effect of accounting ethics on quality of financial reporting in commercial banks in Rwanda. The specific objectives of the study were to investigate the effect of accounting integrity, accounting objectivity and professional competence and due care on the quality of financial reporting in Bank of Kigali PLC and I&M Bank Rwanda PLC. The researcher used an explanatory and correlation design in order to establish the statistical significance of the relationship between accounting ethics and quality of financial reporting in the selected commercial banks. Data was collected from 201 bank staffs whowere selected by use of stratified and simple random sampling techniques. The questionnaire andinterview guide were used for data collection. The validity of research instruments was determinedby use of the content validity index while reliability was verified through pilot-testing. Quantitative data was analyzed using descriptive (frequency and percentage distribution tables) and inferential statistics (multiple linear regression analysis) while content analysis was used to analyze qualitative data from interviews. Findings show that all predictor variables under accounting ethics have a positive and statically significant effect on the quality of financial reporting in the surveyed commercial banks. This is confirmed by the regression coefficients of β1=.245(accounting integrity), β2=.433 (accounting objectivity) and β3=.568 (professional competence and due care) which show that 24.5%, 43.3% and 56.8% of the changes in the quality of financial reporting of the two commercial banks are explained by accounting integrity (X1), accounting objectivity (X2) and professional competence and due care (X3) respectively. Therefore,the research rejects the null hypotheses (H01, H02 and H03) and adopts the alternative hypotheses (Ha1, Ha2, and Ha2) in explaining the statistical significance of the relationship between accounting ethics and quality of financial reporting. It is hoped that the study will enable commercial banks to improve ethical practices and competences among staffs so as to enhance quality of reporting. Other academicians will find the study valuable in benchmarking their studieson the same subject.