RP-Accounting and Finance Department

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Browsing RP-Accounting and Finance Department by Subject "accounting standards"

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    Public Sector Accounting Standards and Financial Reporting in Central Region County Governments, Kenya
    (International Academic Journals, 2018) Nderitu, Anthony George; Koori, Jeremiah
    Over the years, through the Institute of Certified Public Accountants of Kenya, practitioners have championed the adoption of Public sector accounting standard (IPSAS) in Kenya. However, much of this took place in boardrooms, conferences and seminars. It was not until 2014 when treasury, the auditor general and Ernest and Young teamed up to steer the IPSAS adoption in the central government, that the implementation actually commenced. This research assessed the impact of implementation of International Public Sector Accounting Standards on financial reporting in the public sector in Kenya and more specifically the status of implementation of IPSAS on the basis of accountability, comparability and reliability of financial reporting in county governments in the central region of Kenya. This study was premised on a theoretical foundation based on the organizational theory of the firm, stakeholder’s theory and positive accounting theory. The general objective of this study was to establish the effect of public sector accounting standards on financial reporting of county governments in the central region of Kenya. The specific objectives were: to establish how preparation of public sector financial information affected financial reporting in the central region county governments in Kenya, to examine how the disclosure of public sector financial information affected financial reporting in the central region county governments in Kenya, to determine the upshot of presentation of budget information in financial statements on financial reporting in the central region county governments in Kenya and further to explore the relevance of service concession agreements on financial reporting in the central region county governments in Kenya. The study targeted lower, middle and top level managers in the central region county governments in Kenya. The study employed a descriptive research design and the researcher relied on both primary and secondary sources of data. The researcher sought permission from the public relations officers of county governments, before embarking on collection of primary data from respondents and secondary data from the records of the accounting departments. A questionnaire designed with both open and closed structured questions being employed to collect data from 266 respondents selected using the stratified random sampling method. The data collected was analyzed using Statistical Package of Social Sciences (SPSS). Descriptive and inferential methods of data analysis were used to interpret the data. The analyzed data was presented using charts, tables, graphs, frequencies and percentages. It was discovered that the counties have limited access to financial information sources which can enlighten the stakeholders and the general public on how their funds are being utilized. The information contained in financial reports of the county governments of Kenya is very useful in terms of investment decision making and monitoring. The study realized that the financial reporting standardization has enhanced budget information reporting in the public sector in Kenya. IPSASB’s standardization of presentation of financial statements was found to have a significant contribution to accountability and transparency enhancement, reducing complexity of current financial reporting and improving decision usefulness of financial information to the stakeholders. The study concluded that IPSASB’s standardization of service concession agreements has improved financial reporting among the devolved units in Kenya. Further it was realized that the PFM Act has greatly improved financial reporting in the public sector and it is crucial in management of public funds and transparency. The study recommends public participation in financial management, disclosure and proper presentation of financial information that is easily understood by the consumers of the information.