An independent working group was set up by the sport's governing body, the Irish Amateur Boxing Association, in the wake of claims made last year by a boxing club based in Belfast's Sandy Row area.
The club had compiled a 57-page document outlining what it called a hate campaign by nationalist boxing supporters against its members over the course of the last decade.
On Tuesday, the group which investigated the allegations released its report and acknowledged that there were incidents of sectarianism and racism.
It recommended that the IABA should work to eliminate "a number of identified chill factors" and added that a process of intervention and a robust disciplinary process should be developed.
The Independent Working Group acknowledged that there were incidents of sectarianism and racism and therefore believes that the IABA should work to eliminate a number of identified chill factors.
Dr Duncan Morrow, chairman
"However, the Independent Working Group believes that the creation of a separate federation for boxers in Northern Ireland would deepen and accelerate sectarian divisions - potentially splitting boxing for generations to come on sectarian lines," chairman Dr Duncan Morrow, Director of Community Engagement at the University of Ulster, said.
"We have also recommended a strategic review of the IABA's current governance structures in Ulster, which will be important in driving the organisations future agenda, ensuring that key focus goes back on boxing."
The IABA contacted every club in Ulster to offer the opportunity to speak to the working group.
The investigation also raised the issue of national identity as one affecting boxing and other sports.
Under the terms of the Good Friday Agreement, individuals have the right to identify themselves as Irish, British or both as they see fit.
The situation can cause complications for athletes who have to choose a country to represent.
Sandy Row have lifted the lid on a serious problem ... It should act as a catalyst for change in boxing, and indeed other sports in Northern Ireland where people are denied the right to represent the United Kingdom on the international stage.
Jim Allister, TUV
"The Independent Working Group believes that the implications of the right to identity choice, as established in the Belfast Agreement, should be clarified to ensure that young athletes in all sports are not disenfranchised and can express themselves appropriately," Dr Morrow added.
"We recognise that the issue of national representation will require serious engagement between sporting bodies and politicians across the jurisdictional divides."
A number of recommendations have been made following the report's publication, including a plan to accommodate boxers who might represent Team GB at elite level.
It has also been suggested that the IABA modernises its branding to incorporate all the boxers it represents and that it develops a code of conduct around the flying of flags and emblems at bouts.
Sports Minister Carál Ní Chuilín has welcomed the report and acknowledged the good work carried out within boxing.
"As well as providing health and emotional well-being benefits, it has broken down divisions and brought people together," she said.
"Its impact goes beyond individuals and into the wider community."
While issues of national identity are a matter for the individual athlete, it is important that such issues do not disenfranchise our stars of the future from progressing through their sport.
Sports Minister Carál Ní Chuilín
Ms Ní Chuilín added: "This report was dealing with a small minority of cases, based on factors which originate outside the sport, and usually prompted by those with no interest in boxing.
"It should not undermine the positivity within boxing, nor take away from the hundreds of people who have found it a positive force for good.
"However, as the sport continues to grow and develop, this report raises a number of key issues to be addressed. It provides the IABA with a path to take boxing into the future and enhance its reputation of bringing together communities from across the north of Ireland and beyond.
"It is clear that there is no room for sectarianism in sport and the IABA must take the necessary actions to address this issue."
TUV leader Jim Allister welcomed the report's findings, but added that he "fundamentally disagrees" with its view that a separate governing body for boxing in Northern Ireland is not needed.
"When Sandy Row bravely put their head above the parapet, they were met by cat calls claiming the problems they highlighted did not exist," he said.
"This report proves they do. Those who have dismissed the claims of SRABC within the boxing fraternity owe them an apology."