Public Sector Accounting Standards and Quality Financial Reporting in Nairobi City County Government, Kenya

Abstract

Financial reports are of primary significance not just to the final consumers but to society as a whole, as they influence financial decisions that have a substantial influence on humanity. Various key issues are constantly impeding the quality and productivity of the county government financial reporting functions. This is related to weak proper accounting factors on the performance, poor management, insufficient financial guidelines for decision support, low employee desire, and negative mindsets about accounting and responsibility. In the context of this, this investigation seeks to determine the effect of adoption of public sector accounting standards on financial reporting of Nairobi city county government, Kenya. Its specific objective is to examine the effect of preparation of financial statements, disclosure of financial information, presentation of budget information of Nairobi city county government in Kenya. The investigation was anchored on stakeholder, institutional and the theory of Isomorphism. The investigation targeted a population of 102 Employees of Nairobi city county government in the finance and planning division mainly. This investigation adopted descriptive and inferential analysis for analyzing the data, a sample of eighty-one (81) employees was chosen using a stratified random sampling technique. The investigation used questionnaires that were given to the finance persons in the finance and planning division under the planning division of Nairobi city county government staff.  Findings from the survey displayed that presentation of financial statements has a significant positive effect on the overall quality of financial reporting; the effect of financial information disclosure on the quality of financial reporting was both significant and negative; and while the presentation of budget information had a positive and insignificant effect on the quality of financial reporting, this effect was not statistically significant in Nairobi City County government in Kenya. The survey recommends that the county government should prioritize the improvement of the presentation of financial statements. This can be achieved by implementing standardized reporting formats that adhere to established accounting principles, ensuring consistency and clarity in financial disclosures.

Keywords: Financial Reporting, Public Sector Accounting Standards, Financial Statements, Information Disclosure, Budget Information

DOI: 10.7176/EJBM/16-9-10

Publication date: November 30th 2024