Top Management Team Diversity and the moderating effect of Discretionary Accounting Choices on Financial Reporting Quality among Commercial State Corporations in Kenya

The study aims to examine the moderating effect of discretionary accounting choices on the relationship between top management demographic diversity and financial reporting quality among state commercial firms in Kenya based on 248 firm-year observations for 2004 -2015. The study used correlational research design to achieve the sought objectives. It lays a broad foundation for the future research work into the theory and practice of financial reporting quality in commercial state corporations. The findings clearly reveal that, there exist both positive and negative relationship between discretionary accounting choices and financial reporting quality. However, the relationship varies with each financial reporting quality proxy measures. The demographic variables that were statistically significant in explaining FRQ were; age, education, tenure, gender and functional background diversity. Hence, managerial characteristics matter in explaining discretionary accounting choices and financial reporting quality in the companies. Despite the findings showed minimal significant effects on earnings quality and timeliness. Discretionary accounting choices should not be used by the management opportunistically but should be used to enhance quality reporting. The study recommends that stakeholders in commercial state corporations should ensure that discretionary accounting choices is improved to decrease manipulations of accounting information in order to increase the quality of reporting

Payment Delays and Financial Performance of Construction Firms in Vihiga County, Kenya

The purpose of this study was to establish whether payment delays affect financial performance of construction firms. The study employed cross sectional research design, stratified simple random sampling and census survey of 32 construction firms. The study relied on secondary data from audited financial reports. Data was analyzed using both descriptive and inferential statistics - multivariate analysis. There was no statistical significant effect between delayed payments and financial performance as measured by Net profit margin and current ratio, probably other factors or measures such as management style and strategies could have affected the two variables. Our conclusion however, is that late payments in commercial transactions by the public or generations  and private entities have detrimental effects on the business environment,  especially by exacerbating the burden of already financially constrained firms which can ultimately push them out of business. The study was only limited to one financial year and construction firm

Corporate governance and modified audit opinion : evidence from state owned enterprises in Kenya

Purpose: The purpose of the study was to examine the relationship between corporate governance practices and modified audit opinion in the commercial and manufacturing sector of state owned enterprises in Kenya. -- Design/Methodology/Approach: The study collected data from 25 companies in the commercial and manufacturing sector covering the period 2013 to 2016. Logistic regression technique was adopted to analyze the variables. -- Findings: The study findings established negative and significant effect of both board size and board independence on modified audit opinion. This results suggest board size and percentage of independent directors significantly influenced the likelihood of state owned enterprises receiving modified opinion. Results on the effect of control variables; leverage and return on assets were statistically insignificant. -- Originality/Value: This study contributes to both theoretical literature and empirical evidence in the corporate governance in public sector context.peer-reviewe

The Impact of Audit Committee Diligence on Modification of Audit Opinion: State Owned Enterprises in Kenya.

The study examined the effect of audit committee meetings as a proxy for audit committee diligence on modification of audit opinion in commercial and manufacturing state owned enterprises in Kenya. The study examined data from 28 companies in the commercial and manufacturing sector covering the period of 2007 to 2016. The data was analysed using a logistic regression model. The study established significant negative relationship between number of audit committee meetings as proxy for audit committee diligence and modified audit opinion. The study findings imply that increased number of audit committee meetings reduced the likelihood of receiving modified audit opinion. This means increased quality of supervision by diligent audit committee led to improved quality of financial reporting. Diligent monitoring could reduce opportunistic behaviours by management as suggested by the agency theory. The findings from this study will contribute significantly practitioners in corporate governance in the public sector to be more diligent in order to improve quality of financial reporting. In addition, the findings will be beneficial to both internal and external auditors to engage with audit committee to ensure smooth audit process and reporting. Key Words: Modified Audit Opinion, Audit committee diligence, Firm size, State Owned enterprises. DOI: 10.7176/RJFA/12-6-10 Publication date:March 31st 202

Board Structure and Firm Performance: Evidence from State Owned Enterprises in Kenya

The study examines the relationship between board structure and firm performance in the state owned enterprises in Kenya. Data was collected from 25 state owned enterprises in the commercial and manufacturing sector covering the period 2014 to 2016.  To establish the relationship between the variables the study employed panel data regression, with fixed and random effects. The study findings established that board size had a positive and significant effect on firm performance. In contrast board independence had negative and significant effect on firm performance. The study findings indicate that that large boards improved firm performance while board independence had a negative impact on firm performance. Results for control variables firm size and firm age were positive and statistically significant. The findings from this study contributes to literature in corporate governance in public sector where comparatively empirical evidence is limited. The findings will prove useful in guiding policy in corporate governance practices in the public sector in Kenya. Keywords: Corporate governance, Board size, board independence, Firm Performance, State Owned enterprises. DOI: 10.7176/RJFA/11-16-04 Publication date:August 31st 202