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BACKGROUD OF THE STUDY

The National Social Security Fund (NSSF) is a National Saving Scheme mandated by Government through the National Social Security Fund Act, Cap 222 (Laws of Uganda) to provide social security services to employees in Uganda. It was established by an Act of Parliament (1985) to provide for its membership, payment of contributions to, and payment of benefits out of the Fund. NSSF is a provident fund (pays out contributions in lump sum). It covers all employees in the private sector including Non Governmental Organizations that are not covered by the Government's pension scheme. It is a scheme instituted for the protection of employees against the uncertainties of social and economic life. The principal activity of the Fund is to ensure members contributions are collected and invested in a professional manner to earn a good return to meet the benefit obligations to its members. The fund is financed by the employees and employers contributions. The total contribution is 15% of the employees gross salary, of which 10% is paid by the employer and 5% is paid by the employee. The NSSF Board of Directors, through Management has a legal and fiduciary obligation to act in the best financial interest of the Fund's beneficiaries and to exercise the highest standard of care. Premised on the above, the Fund has established Investment Policy Guidelines and Strategies that are vital to all the Fund's stakeholders. NSSF believes that the projected pension benefits can best be met by having the proper long term asset mix, including proper diversification as well as prudent management of risks. NSSF has an array of permissible investments covering almost all sectors of the economy. These include; real estate development, energy, water, education, health, mortgage finance (both primary and secondary) and SME developments. Management must allocate limited resources between competing opportunities (projects) . Making this investment, or capital allocation, decision requires estimating the value of each opportunity or project, which is a function of the size, timing and predictability of future cash flows and this where the Financial Statement Reports come in.Within a corporate context and the (IAS1), financial statements cover four types of accounting data sets. These include a balance sheet, a statement of profit and loss, a statement of cash flows and a statement of retained earnings which must be prepared in line with the GAAPs. A corporate balance sheet is also known as a statement of financial condition or statement of financial position. It provides information about a company's assets, liabilities and equity capital. Assets are economic resources that a company owns. Liabilities are debts an organization must repay. Equity capital represents funds that financial market participants invest in a company. An organization's income statement is an important report on which investors, financial analysts and corporate business partners rely to gauge a company's economic health. A treasure trove of corporate information, this statement provides data on a firm's expenses and revenues, indicating whether the firm is profitable or not. A company's business partners include suppliers, customers and lenders. A cash flow statement indicates liquidity movements within a company's operations. In other words, the report tells the tale of the company's cash payments and receipts over a period of time. The statement indicates (in this order): cash flows from operating activities, cash flows from investing activities and cash flows from financing activities.

The Equity Statement also known as a statement of retained earnings, a corporate equity statement provides insight into the ownership of a company. In short, the report helps identify who owns the company. Corporate owners are also referred to as shareholders or equity holders. They receive periodic dividend payments and make profits when share prices increase. A typical equity statement indicates retained earnings --- that is, the portion of corporate income not distributed to shareholders, dividend payments and equity shares. To make a good investment decision basing on the data from the financial statements and reports the management has to carry out a process called financial statement analysis. Financial statement analysis involves analyzing the firms financial statements to extract information that can facilitate decision-making. For example, an analysis of the financial statement can reveal whether the firm will be able to meet its long-term debt commitment, whether the firm is financially distressed, whether the company is using its physical assets efficiently, whether the firm has an optimal financing mix, whether the firm is generating adequate return for its shareholders, whether the firm can sustain its competitive advantage etc; While the information used is historical, the intent is clearly to arrive at recommendations and forecasts for the future rather than provide a picture of the past. Financial analysis is performed by both internal management and external groups. Firms would perform such an analysis in order to evaluate their overall current performance, identify problem/opportunity areas, develop budgets and implement strategies for the future. External groups (such as investors, regulators, lenders, suppliers, customers) also perform financial analysis in deciding whether to invest in a particular firm, whether to extend credit etc. There are several rating agencies (such as Moodys, Standard & Poors) that routinely perform financial analysis of firms in order to arrive at a composite rating.

PROBLEM STATEMENT
The principal activity of the NSSF is to ensure members contributions are collected and invested in a professional manner to earn a good return to meet the benefit obligations to its members. But according to the investment history of the fund it is not going as planned. Over the last 10 years, four NSSF MDs have been fired amidst investment scandals. This means that average life expectancy of management is 2.5 years. Some of these scandals include the case of grossly over valuing UDYAM House (now known as the NSSF House) to the tune of 3.3 billion Ugandan shillings. It was sold at a controversial price of 9.7 billion Ugandan shillings much higher than the market price at the time. Then latter, the infamous Nsimbe Estates scandle followed an inflated valuation of the project. It is believed that in this 2004 version of investment choices, the price of land purchased by NSSF was inflated by over 4 billion Ugandan shillings. The parliamentary Committee on Statutory Enterprises has just been investigating how NSSF purchased land in Temangalo, Wakiso District from Arma Ltd. A number of measures ranging from firing CEOs to diversifying investments and even NSSF was consequently transferred from the Gender and Lab56our Ministry to that of Finance and Economic Planning for what was believed to be proper supervision. But alas! This did not help much. This instigated the researcher to study the effect of Financial reporting and its relevancy in making investment decisions.

VARRIABALES Independent variable; Financial reports and Financial statements Dependent variable; Investment decision making. Intervening variable; Financial statements analysis. Moderating variables; Managements policies on investment decision making. Extraneous variables; Amount of investment funds available.

CONCEPTULA FRAMEWORK

Moderating/control variable Management policies on investment decision making.

Independent variable. Financial reports/Financial statements.

Intervening variable. Financial statement analysis

Dependent variable. Investment decision making.

Extraneous variable. Amount of investment funds available.

OBJECTIVES OF THE STUDY (a) To determine the firms performance relative to the industry. (b) To assess the firms performance relative to the leading firms in their industry. (c) To examine the current year performance compared to the previous year(s). RESEARCH QUESTIONS (a) How is the firm performing relative to the industry? (b) How is the firm performing relative to the leading firms in their industry? (c) How does the current year performance compare to the previous year(s)? METHODOLOGY The Research Strategy and Design; The researcher will use a case study of the National Social Security Fund (NSSF). The reason of choosing NSSF is because is one of the biggest investor in the Ugandan economy. The researcher will use descriptive research design, evaluative research and analytical longitudinal research in order to archive the objectives of the study. Also correlation analysis will be utilized to establish if there is existence of a relationship between accounting data in productivity measurement and strategic decision making. Survey Population; The study population will constitute the employees in the Accounting and finance department of the NSSF the board members in charge of investing. Sampling Design and Techniques; The researcher will use purposive sampling because employees in the accounts and finance department are the one with the most required information. Also convenience (haphazard) sampling will be employed since practically, it is not easy to guarantee the availability of the board members that are in charge of making investment decisions.

Sample size; The study will constitute a sample size of 35 respondents of NSSF in the accounts and finance department and also those in charge of making investment decisions.

Sampling procedure; Non probability sampling methods will mainly be used because they target specific individuals. Purposive samples will be used to purposely select individuals to survey. Volunteer subjects will also be used. Haphazard sampling will be used to ask for information from individuals who can be easily reached. Data sources; Data will be collected from primary and secondary sources. 1) Primary sources Primary data will include structured interviews whereby the researcher will approach the respondents with already prepared questions (interview guides) and responses from the interviewees will be filled in by the researcher. Also, structured questionnaires will be used which will be given to the respondents to fill.

2) Secondary sources Secondary data will be obtained from libraries, internet sources, text books, journals, magazines, brochures, NSSF website, reports, and previous researches.

Data collection tools;

The researcher will use questionnaires and interview guides to collect primary data from the respondents. Data processing and analysis; For qualitative analysis of data, data pieces collected through document search, the researcher will analyze data involving data reduction, frequency distribution and cross interviewing analysis. Data derived the document search will be analyzed using SPSS (Statistical Package for Social Scientists) to ascertain the relationship between Financial reporting and Investment decision making. MEASUREMENT; Independent variable will be measured on using operationalized data obtained from the offices of the accounts and finance department and any rating agency that NSSF might have hired. Dependant variable will be measured on a dichotomous scale based on how the boards behavior on making investment decisions. References: 1. 2. 3. 4. 5. Frank Wood, Business Accounting Book 2 Tenth Edition Nkundabanyanga K Stephen, Advanced Accounting First Edition
http://www.ibm.com/investor/financialguide/

http://www.nssfug.org www.wekipedia.com

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