valuating Effects of Digital Transformation on Quality of Financial Reporting in Nairobi City County Government, Kenya
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Date
2024
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Asian Journal of Economics, Business and Accounting
Abstract
Despite the Nairobi City County Government's implementation of policies designed to ensure highquality financial reporting and enhance accountability and transparency, these measures have not
fully achieved their intended outcomes. Persistent deficiencies in financial reporting quality, coupled
with an increase in deceptive practices, have undermined public trust. While digital transformation
holds promise for improving financial reporting, existing empirical research is limited by conceptual,
methodological, and contextual gaps. This study evaluates the impact of digital transformation on
financial reporting quality within Nairobi City County Government. The target population comprised
287 officers from the Finance and Economic Planning Department, from which a sample of 105
respondents was purposively selected. Utilizing both descriptive and explanatory research design the study employed structured questionnaires to collect primary data, which were analyzed to
produce descriptive and inferential statistics. The study concludes that big data technology has a
significantly positive effect on quality of financial reporting (p<0.01; r= 0.618; β = 0.185) as block
chain technology has a significantly positive effect on the quality financial reporting (p<0.01; r=;0.447
=0.254) and cloud computing technology has a significantly positive effect of quality of financial
reporting in Nairobi City County Government (p<0.01; r= 0.696; β= 0.599). Additionally, there is a
positive significant effect of robotic process automation on the quality of financial reporting in Nairobi
City County Government (p<0.01; r= 0.5.2.5; β=0.368). Furthermore, readiness to innovate
significantly moderates the relationship between digital transformation indicators and financial
reporting quality, with a moderating effect of 5.07%, which negatively impacts financial reporting
quality in Nairobi City County Government. The research would provide decision-makers in Nairobi
City County Government with valuable insights into the dynamics of digital transformation. This
information would be used to formulate regulations aimed at enhancing the quality of financial
reporting
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Citation
Faith, Chepkorir, and Grace Kariuki. 2024. “Evaluating Effects of Digital Transformation on Quality of Financial Reporting in Nairobi City County Government, Kenya”. Asian Journal of Economics, Business and Accounting 24 (9):146-65. https://doi.org/10.9734/ajeba/2024/v24i91483