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1. Introduction

Accountability has gained significant attention in discussions surrounding the legitimacy of
international institutions, given the absence of a global democratic system. Global administrative
bodies, such as the World Bank and the International Monetary Fund, face criticisms for their
perceived accountability gaps. This literature review focuses on the accountability challenges of
these institutions, which are supported by affluent nations and provide aid to developing nations
(Stewart, 1984).


The dimensions of accountability in the public sector are diverse, ranging from financial and
process accountability to performance, program, and policy accountability (Stewart, 1984).
Financial accountability, which involves transparency, record-keeping, and financial reporting, is
a key focus of this study (Minja, 2013; Nyamori, 2009; Porter, 2009; Rob, Bebbington, & Collison,
2006).


In the realm of corporate governance, the separation of management roles from ownership, as posited
by the Agency-Principal theory, marks its inception (Fisher, 2004). The importance of governance,
accounting, and accountability in state-owned enterprises (SOEs) and charitable organizations has
been highlighted (Dellaportas, Langton, & West, 2012; Grossi, Papenfuß, & Tremblay, 2015). However,
the link between corporate governance and accountability in developing countries like Uganda
remains underexplored.


Effective governance and management of SOEs are vital for efficient public service provision and
budget consolidation (Grossi, Papenfuß, & Tremblay, 2015). Prior studies have established positive
associations between audit committee effectiveness and accountability in Ugandan statutory
corporations (Bananuka et al., 2018), as well as between corporate governance and internal controls
over financial reporting in microfinance institutions (Nalukenge, Tauringana, & Ntayi, 2017).
Furthermore, governance in founder firms influences learning and capability development through
incentives, authority relations, and norms of legitimacy (Gedajlovic et al., 2004).


This literature review aims to investigate and analyze the dimensions and significance of
accountability in international institutions, public sector financial accountability, and the link
between corporate governance and accountability, particularly in developing countries like Uganda.
By reviewing existing research and identifying gaps, this study contributes to a better
understanding of accountability's implications for organizational effectiveness and societal
well-being.

2. Literature review

Recently, accountability has become an important topic in the discussion about the legitimacy of
international institutions. Because there is no global democracy to which organizations must be
accountable, global administrative bodies are often criticized as having large accountability gaps.
One paradigmatic problem arising in the global context is that of institutions such as the World
Bank and the International Monetary Fund which are founded and supported by wealthy nations and
provide aid, in the form of grants and loans, to developing nations.


There are a number of dimensions of accountability of public officials. Stewart (1984) set these
dimensions in the form of a ladder which runs from accountability by standards to accountability by
judgment. In Stewart’s ladder of accountability, there are five steps which translate into five
dimensions of accountability. In the first three steps where public officials are required to
demonstrate their compliance with statutes while observing recognized prudent practices, there is
financial accountability—which is the major focus of this study, process accountability and
performance accountability. The last two steps include program accountability and policy
accountability. Accountability should reflect the traditional financial information in addition to
outcomes (Dunne, 2013; Stewart, 1984). Financial accountability in the public sector is seen to
mean visibility of activities (physical output), record keeping and financial reports/annual
accounts (Minja, 2013; Nyamori, 2009; Porter, 2009; Rob, Bebbington, & Collison, 2006). To
accomplish the objective of financial accountability, FASB (2006) postulates that financial
reporting and accounting should communicate information about an entity’s financial position as
reflected by assets and liabilities, transactions and other events and circumstances that change
them in terms of financial performance and cash flows.


The origins of modern corporate governance can be traced back to a point in time when the role of
managing an entity got separated from the ownership and is premised on the Agency—Principal theory
(Fisher, 2004). In their study on governance and accountability in Australian charitable
organisations, Dellaportas, Langton, and West (2012) document that the public is entitled to
receive high quality financial disclosures from charities. In their guest editorial, Grossi,
Papenfuß, and Tremblay (2015) note that corporate governance, accounting and accountability of SOEs
are crucial and growing topics in public management and other research disciplines. The authors
further document that Public service provision and budget consolidation cannot be realized
effectively and efficiently without powerful governance and management of SOEs. Studies that link
corporate governance and accountability are evident though not common in Uganda—a developing.
Previous scholars document a positive association between audit committee effectiveness and
accountability in Ugandan statutory corporations (see Bananuka et al., 2018) while other scholars
provide evidence on the positive and significant association between corporate governance and
internal controls over financial reporting in Microfinance institutions (see Nalukenge, Tauringana,
& Ntayi, 2017). Gedajlovic et al., (2004) extend an agency perspective on governance to suggest
that particular blend of incentives, authority relations and norms of legitimacy in founder firms
interacts with the external environment to affect the nature and pace of learning and capability
development. Corporate governance deals with how the shareholders (principals) incentivize
management (agents) to effectively align management goals with shareholder goals, and also to
ensure that there was adequate information flow to enable proper monitoring and control of
management actions (Millson & Ward, 2005).


The standards of corporate governance therefore are determined by the measures, which companies
take for them to improve the way they are directed and controlled, and by the legal, financial, and
ethical environment in which they work (Cadbury,2003) . Where there is inadequate accountability,
resources will be used inefficiently and ineffectively; thus, inadequate accountability can result
in devastating consequences for millions of people and compromising the operations of an
organization (Eikenberry & Kluver, 2004 Eikenberry, A. M., & Kluver, J. D. (2004). The
marketization of the nonprofit sector: Civil society at risk? Public Administration Review, 64(2),
132–140.

). Accountability is an obligation to present an account of and an answer for the execution of
responsibilities to those who entrusted those responsibilities, the principal/agent relationship
(Eikenberry & Kluver, 2004). Accountability forms the basis of the trust in organizations, so when
accountability relationships are undermined then our trust in organizations is damaged.

3. Conclusion

In conclusion, accountability has emerged as a critical concern in discussions surrounding the
legitimacy of international institutions. The absence of a global democratic framework has led to
substantial accountability gaps in these organizations, such as the World Bank and the
International Monetary Fund. The dimensions of accountability in the public sector, including
financial, process, performance, program, and policy accountability, play a vital role in ensuring
transparency and responsible governance.


Corporate governance, rooted in the separation of management and ownership, holds significant
implications for accountability. Effective governance and accountability are crucial in state-owned
enterprises and public service provision. However, research linking corporate governance and
accountability in countries like Uganda remains limited.


It is evident that inadequate accountability can lead to inefficient resource utilization and
severe consequences for organizations and society at large. Therefore, addressing accountability
gaps is essential for promoting effective organizational performance and maintaining public trust.


This literature review has shed light on the dimensions and significance of accountability in
international institutions, the public sector, and corporate governance. By identifying research
gaps and exploring these issues, this review contributes to a deeper understanding of
accountability's role in organizational effectiveness and societal well-being. Moving forward,
further research is needed to develop robust accountability frameworks and practices that can
address the challenges faced by international institutions and promote responsible governance
worldwide.


4. Resources:

Stewart, J. D. (1984). The role of information in public accountability. Issues in Public Sector
Accounting, 2(4), 13–34.


Minja, D. (2013). Accountability practice in Kenya’s public service: Lessons to guide service
improvement. International Journal of Business and Management Review, 1(4), 54–63.


Porter, A. B. (2009). The audit trinity: The key to securing corporate accountability. Managerial
Auditing Journal, 24(2), 156–182.


Rob, G., Bebbington, J., & Collison, D. (2006). NGOs, civil society and accountability: Making the
people accountable to capital. Accounting, Auditing & Accountability Journal, 19(3), 319–348.


Nyamori, O. R. (2009). Making development accountable. Journal of Accounting & Organizational
Change, 5(2), 197–227.


Fisher, E. (2004). The European Union in the age of accountability. Oxford Journal of Legal
Studies, 24(1), 495–515.


Dellaportas, S., Langton, J., & West, B. (2012). Governance and accountability in Australian
charitable organisations: Perceptions from CFOs. International Journal of Accounting & Information
Management, 20(3), 238–254.


Grossi, G., Papenfuß, U., & Tremblay, M. (2015). Corporate governance and accountability of
state-owned enterprises. International Journal of Public Sector Management, 28(4/5), 274–285.


Bananuka, J., Nkundabanyanga, S. K., Nalukenge, I., & Kaawaase., T. K. (2018). Internal audit
function, audit committee effectiveness and accountability in the Ugandan statutory corporations.
Journal of Financial Reporting and Accounting, 16(1), 138–157.


Nalukenge, I., Tauringana, V., & Ntayi, J. M. (2017). Corporate governance and internal controls
over financial reporting in Ugandan MFIs. Journal of Accounting in Emerging Economies, 7(3),
294–317.


Gedajlovic, E., Lubatkin, M. H., & Schulze, W. S. (2004). Crossing the threshold from founder
management to Professional Management. A Governance Perspective. Journal of Management Studies,
41(5), 899-912.


Cadbury, A. (2003). The report of the Committee on the Financial Aspects of Corporate Governance:
The Code of Best Practice. Gee Publishing.


Eikenberry, A. M., & Kluver, J. D. (2004). The marketization of the nonprofit sector: Civil society
at risk? Public Administration Review, 64(2), 132–140.

Financial Accountability Standards Board Issue (2006). An amendment of the FASB statements No. 133
& 140. Norwalk, CT February 16, 2006..