Digital Transformation and Quality of Financial Reporting in City County Government, Kenya
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Date
2024-07
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Kenyatta University
Abstract
The eagerness of organizations to use technological advancements in order to enhance the quality of their financial reports contributes to a global trend toward the digitization of governmental auditing processes. Failure to undergo digital transformation have resulted in inadequate financial reports from public entities, thereby limiting the ability to hold their management accountable for public resources. In an effort to address this issue, the Nairobi City County Government has implemented policies aimed at ensuring high-quality financial reporting to enhance accountability and transparency. Yet, in spite of these initiatives, there remain deficiencies in the overall level of financial reporting, as demonstrated by a rise in deceptive practices that have reduced public trust in financial reporting in general. Even though empirical research was already in existence emphasizes how crucial digital transformation plays in increasing financial reporting's transparency, several of the aforementioned studies had conceptual shortcomings and are methodologically and contextually insufficient. Therefore, by examining the effects of digital transformation on the financial reporting quality within Kenya's Nairobi City County Government, this study closed these gaps. The specific objective was to explore how big data, block chain, cloud computing, and robotic process automation influence the quality of financial reporting. Furthermore, the research sought to ascertain the moderating impacts of innovation readiness on the link between digital transformation and the quality of financial reporting in the Nairobi City County Government. Diffusion Innovation Theory, Systems Theory, Agency Theory, Technology–Organization–Environment Theory, and Dynamic Capability Theory served as the foundation for this study's theoretical framework. Targeting 287 people who worked in the Nairobi City County Government's finance and economic planning department, the study employed a descriptive and explanatory research design. Probability sampling techniques was utilized to select a sample size of 105 respondents. Structured questionnaires wase used to gather primary data, and an examination of the Nairobi City County Government's numerous financial records yielded secondary data. Using SPSS version 22.0, multiple regression analysis as well as other descriptive and inferential statistics was used to analyze the collected data. Diagnostic tests such as normality, multicollinearity, autocorrelation, and heteroskedasticity was conducted. The study adhered to all ethical considerations throughout its execution. The study concludes that big data technology has a post give significantly high affected on quality of financial reporting in NCCG.
Description
A Research Project Submitted to the School of Business, Economics and Tourism in Partial Fulfilment of the Requirement for the Award of Degree of Master of Business Administration (Accounting Option) of Kenyatta University, July 2024.
Supervisor
Grace Kariuki