Influence of External Auditing Non-compliance on the Performance of Savings and Credit Co-operative Societies in Tanzania
Abstract
Purpose: This study employed thematic and descriptive analysis to investigate the influence of non-compliance with external auditing recommendations on the performance of savings and credit co-operative societies (SACCOS) in Tanzania. The study specifically investigated how improper recording in the financial statements, non-compliance with regulations, and negligence by SACCOS leaders and staff in pertinent SACCOS matters affected SACCOS performance in Tanzania.
Design/Methodology/Approach: The data were derived from the findings of 1,879 SACCOS audited in 2020 across Tanzania. The in-depth analysis used data from 330 audited SACCOS in the Dar es Salaam region. The thematic analysis involved 22 SACCOS (14 from Dar es Salaam and 8 from the Morogoro, Arusha, Tabora, Songwe, and Ruvuma regions). Moreover, primary interviews data collected from four areas with numerous SACCOS (Dar es Salaam, Arusha, Dodoma, and Mbeya) from December 12th to 18th, 2025, validated the secondary data findings.
Findings: The findings indicated that SACCOS’ performance in Tanzania was hindered by improper financial statement recording, non-adherence to rules and regulations, and negligence by SACCOS staff and leaders in failing to follow up on issues that expose SACCOS to risk. The findings suggest that ignoring audit recommendations makes SACCOS vulnerable to fund mismanagement and embezzlement and promotes weak internal control mechanisms. This practice undermines good governance, erodes members’ trust, and undermines SACCOS performance.
Implications/Originality/Value: SACCOS should train and hire qualified, honest staff who can present SACCOS information clearly in financial statements. Likewise, regulators should enforce SACCOS’ compliance with regulations and closely monitor them to address negligence-related challenges. This is the first study to explore how external audit recommendations contribute to the performance of Tanzanians SACCOS.
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