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INTERNAL FACTORS INFLUENCING EXTERNAL AUDITORS INDEPENDENCE AMONG PRACTICING ACCOUNTANTS IN KENYA
Full text linkPurpose – Auditors independence holds sway in ensuring that the public has confidence in financial reporting. Therefore, this study focus was to examine the factors that determine external auditors’ independence in Kenya. Methodology - The study employed a cross-sectional descriptive study design and used primary data. The collected data was analyzed with the help of the SPSS software version 22 and presented with the help of frequency distributions, computation of mean and standard deviation. The association between the research variables was presented using an ordinal a regression model. Findings – The study established that internal factors influence auditor independence by 31.7%. From the results of the research, it also revealed that there is a significant relationship between audit tenure, audit firm size and audit independence. This was indicated with a p-value of 0.029 and 0.009. The study also established that there is no significant relationship between audit committee and audit independence with a p-value of 0.465. The study concludes that audit tenure and firm size affect audit independence and thereby the study recommends the need for ICPAK to develop a policy that will guide audit tenure and audit committee. Implications –The study findings suggest that ICPAK develops a policy that will guide the audit tenure and audit committees, this will in essence promote an understanding of the auditors’ independence in the profession. The study also further suggested that similar studies should be carried and focus on the perception of users such as institutional and private investors, audit committees and members of regulatory bodies. Value -The findings of the study concludes that audit tenure and firm size affect audit independence and thereby the study recommends the need for the Institute of Certified Public Accountants of Kenya (ICPAK) to develop a policy that will guide audit tenure and audit committee. Key words: Audit Committee, Auditor Independence, Auditor, Audit tenure, Audit Quality
EFFECTS OF CAPITAL FLOWS ON ECONOMIC GROWTH IN KENYA
Full text linkPurpose -This study investigated the immediate and lagged effects of the various forms of capital flows - FDI flows, portfolio flows and “Other investments capital flows” (which mainly represents corporate, financial institutions and general government borrowings as well as remittances from the diaspora) - on economic growth in Kenya over a 30 year period from 1984 to 2014. Methodology – The study adopted a quantitative research design in the form of an econometric model known as Auto Regressive Distributed Lag Model (ARDLM). Findings -FDI and portfolio investments flows have a negative impact on the GDP growth rate and that their impact is not statistically significant.However, other investments flows, which mainly represent corporate, financial institutions, general government borrowings and remittances from the diaspora, have a positive impact on GDP growth rate and the impact is statistically significant.Based on the study findings, it can be inferred that a significant slowdown or a reversal in capital flows in form of “Other investments capital flows” into Kenya result into significant slowdown in economic growth in the country. Implications -Policy makers may lay much emphasis on attracting portfolio investment flows and “Other investments capital flows”, while investors and firms should consider the upside opportunities that may be created by increase in other investments capital flows and the downside risks that could results from a significant slowdown or a reversal in these forms of capital flows into the country
Effects of Working Capital Management on Financial Performance of Energy and Petroleum Companies Listed at Nairobi Securities Exchange
Full text linkPurpose – This paper sought to establish the effect of Working Capital Management on the financial performance of Energy and Petroleum Companies listed at the Nairobi Securities Exchange. Methodology – The study was modelled as correlation survey. A data collection sheet was used to collect secondary data from the published financial statements of all Energy and Petroleum companies listed at Nairobi Securities Exchange for a period of eight years between 2007 and 2014. Both descriptive and quantitative analyses were adopted. Pearson correlation, regression and ANOVA analysis were also conducted. Findings - The study suggests that Working Capital Management influence the Return on Assets significantly. 17.8% of the variations in profitability were influenced by variations in the Working Capital Management. The study establishes that the influence of Working Capital Management on profitability is statistically significant. The study finds weak negative associations between profitability and inventory conversion period, accounts collection period, accounts payable period and cash conversion cycles. The study establishes that the negative relationships between accounts payable period, cash conversion cycle and profitability are statistically significant. The relationships between accounts collection period, inventory conversion period and performance are not statistically significant. Implications - It is incumbent upon the Finance Managers of Energy and Petroleum companies listed at Nairobi Securities Exchange to understand the Energy and Petroleum business operations, and put in place robust Working Capital Management framework because of significant and positive impact on the financial performance of these companies. Value - A vibrant and profitable Energy and Petroleum sector has been identified as a key pillar to the achievement of Kenya’s Vision 2030. It is critical therefore, to re-evaluate existing Working Capital Management framework of these companies for robustness in order to realize the Vision 2030
Antioxidant and anti-inflammatory activities of selected medicinal plants from western Kenya
Full text linkBackground: Globally, the increase in the burden of diseases related to oxidative damage and inflammation, coupled with the high cost of medication and the side effects of these therapies necessitates a need for more effective, affordable and safer remedies. Thus there still exists a demand for new antioxidant and anti-inflammatory agents. Objectives: To screen selected medicinal plants from Kakamega County for their antioxidant and anti-inflammatory activities. Methodology: Seven medicinal plants used to treat ailments related to oxidative damage and inflammation were selected and extraction was carried out using methanol. Antioxidant activity was screened using 2, 2-diphenyl-1-picrylhydrazyl assay while carrageenan induced rat paw edema assay was used to screen for their anti-inflammatory activity. Results: The methanolic leaf extracts of Rhus vulgaris and Phyllanthus fischeri displayed good antioxidant activity with percentage inhibition of 71.4% and 66.7 % respectively. Furthermore, the methanolic leaf extract of Rhus vulgaris displayed significant anti-inflammatory activity while Phyllanthus fischeri had mild activity. Results were considered to be statistically significant when (P<0.05). Conclusion: These results support the use of Rhus vulgaris and Phyllanthus fischeri in traditional medicine to remedy oxidative damage and inflammatory related diseases. These two plants are potential sources of natural antioxidant and anti-inflammatory agents. Key words: Medicinal plants, Kakamega County, Antioxidant, Anti-inflammator
In vitro anthelmintic activity of Albizia gummifera, Crotalaria axillaris, Manilkara discolor, Teclea trichocarpa and Zanthoxylum usambarense using sheep nematodes
Full text linkBackground: Albizia gummifera, Crotalaria axillaris, Manilkara discolor, Teclea trichocarpa and Zanthoxylum usambarense are used to treat different ailments in many parts of the world. For instance, A. gummifera is used to treat stomach pains, malaria, diarrhoea and sleeping sickness while C. axillaris treats ophthalmic disorders and kidney problems. Manilkara discolor stem bark infusion is used to treat stomach disorders and as an astringent while T. trichocarpa has been used to treat malaria, helminth infections and fever. Zanthoxylum usambarense is used to treat rheumatism, backache, painful joints, fever, sore throat, tonsillitis, chest pains, malaria, abscesses and wounds. Objective: The aim was to determine whether the crude plant extracts have in vitro anthelmintic activity. Materials and methods: Different parts of the plants were acquired from Ngong Hills forest, Kajiado County, Kenya in May 2012, dried and macerated to exhaustion with dichloromethane: methanol (1:1, v/v) solution. Nematode eggs (Haemonchus Spp, Trichostrongylus Spp and Oesophagostomum Spp) were obtained from infected sheep rectums at Department of Vet Farm, University of Nairobi based at Kabete. Varying concentrations of water solutions of the dry crude extracts were prepared. Egg hatch (EHA) and larvae development assays (LDA) were used to test the extracts’ effects on nematode egg hatching and larvae development, respectively Results: Albizia gummifera (root bark) and Zanthoxylum usambarense (stem bark) showed high activity (IC50 below 300 μg / mL) in both tests. Albizia gummifera (root, stem bark and pods), Zanthoxylum usambarense root bark, Crotalaria axillaris twigs and Teclea trichocarpa root and stem bark showed high activity in LDAbut moderate activity (300 μg / mL < IC50 < 500 μg / mL) in EHA. Teclea trichocarpa twigs showed moderate activity in LDA but low (IC50 > 500 μg / mL) activity in EHA. Manilkara discolor extracts showed low activity in both tests. Conclusion: Different extracts of the plants tested may inhibit nematode growth and development and hence warrant in vivo tests would support their ethnomedicinal application. Key words: Anthelmintic activity, egg hatch, larval development, Haemonchus, Trichostrongylus, Oesophagostomu
Anticonvulsant activity of methanol stem bark extract of Boswellia dalzielii Hutch. (Burseraceae) in mice and chicks
Full text linkBackground: Boswellia dalzielii is a widely used medicinal plant in African traditional medicine. The efficacy of its stem bark extract in management of convulsions is well acclaimed among communities of Northern Nigeria. Objective: To evaluate the anticonvulsant potentials of methanol stem bark extract of Boswellia dalzielii in mice and chicks. Methodology: Phytochemical screening, elemental analysis and acute toxicity studies was carried out. The extract was evaluated for anticonvulsant activity against electrically-induced seizures in chicks and against pentylenetetrazole, strychnine, picrotoxin and 4-aminopyridine-induced seizures in mice at doses of 20, 40 and 80 mg/kg. Results: The intraperitoneal LD50 was estimated to be 280 and 570 mg/kg in mice and chicks respectively. The extract at 20 mg/kg provided 40% protection and significantly (p<0.05) increased the mean onset of seizure in MEST. A dose-dependent and significant (p<0.05) increase in the mean onsets of pentylenetetrazole and strychnine-induced seizures were produced by the extract at 80 mg/kg. Similarly, a dose-dependent and significant increase (p<0.05 and p<0.01) in latency to picrotoxin-induced convulsions was observed at 40 and 80 mg/kg respectively. Conclusion: These findings suggests the methanol stem bark extract of Boswellia dalzielii possesses anticonvulsant activities and thus supports the ethnomedical rationale for its use against convulsions. Keywords: Anticonvulsant, Boswellia dalzielii, Epilepsy, Pentylenetetrazole, Picrotoxi
Effects of Operating Environment Factors on Infrastructure Finance Flows in the Capital Markets in Kenya
Full text linkPurpose – This study sought to establish the whether the operating environment factors affect efficient infrastructure finance flows in the capital markets in Kenya. Policy framework, legal environment, regulations and institutions are the operating environment factors which influence the infrastructure finance flows through the capital markets. Methodology – The study was undertaken using descriptive research design where a questionnaire was used targeting a population of 100 infrastructure related institutions. The questionnaire used to collect quantitative data was on the Likert scale with numerical scores 1 to 5. Descriptive and regression analysis were conducted on the data to show how each independent variable of the operating environment factors influences the infrastructure finance flows. Findings – Majority of respondents think that there are inadequate policies, laws and regulations while half of these respondents believe that the institutions lack the necessary capacity to operate efficiently and effectively. From the results, majority of these respondents agreed that there is need for an urgent review of the existing financial sector policies and institutions. Half of the respondents want the regulations revised but majority of these respondents believe that the existing laws do not require review. The results indicated that the policy framework, legal environment, regulations and institutions significantly affect the infrastructure finance flows through the capital markets in Kenya. From the results, it can be concluded that there are no adequate policy, legal, regulatory and institutional arrangements to facilitate the uptake of infrastructure finance in the capital markets. Further, it can be deduced that the policy, legal, regulatory and institutional regimes are poorly configured to deliver financing of infrastructure projects in the capital markets of Kenya. Finally, it can be inferred that the financial sector policies, regulations and institutions are not strong enough to provide a supportive environment in delivery of infrastructure finance. Implications – The financial sector policies, laws, regulations and institutions need to be reviewed in order to create a conducive operating environment for financing of infrastructure investments. Benchmarking studies are critical for enhancement of policies, laws, regulations and institutions based on the international best practices for efficient and effective delivery of infrastructure finance through the capital markets in Kenya. Further research is recommended on effects of operating environment factors on infrastructure finance flows in the capital markets in Kenya
Organizational Innovation, Technology, Strategic Planning and Competitiveness: Conceptual Perspective
Full text linkOrganizations need to study their past operations and review the current status ofcompetitiveness so as to inform their future strategic planning process if they are to remaincompetitive. Changes in the business environment emanating from globalization,internationalization of firms and developments in information, communication andtechnology have called on firm to constantly rethink their strategies if they are to remaincompetitive in a given industry. Technology enable organizations to gather informationabout their competitors with the offering hence lead to better product development andhigher customer satisfaction. Through technology, firms are able to develop new and betterways of going about internal affairs hence operational efficiency. Technology offersorganizations a platform for them to leverage their operations for efficient operationscompared t their competitors. Organizations have to constantly come up with new ways ofdoing things by investing in research and development. The competitive advantage of anorganization is never constant because the competitors are always plotting to stay ahead ina given industry. Strategies developed for competitiveness are always concerned withmaking an organization unique and different from its peers in a given industry. Innovationenables firms to respond to changing customer preferences and tastes hence remainrelevant in their decision making process. This study was anchored on four theories:Innovation diffusion, Resource Based View, Technology acceptance Model and the fiveforces Theory. These theories are conceptualized in the context of strategic planningcovering strategy formulation, implementation to monitoring and evaluation. It alsopresented the technological advancements and how they have affected businesses’competitiveness through innovation. Innovativeness mediates the relationships betweenfirm performance and the formal strategic planning process and planning flexibility
Evaluation of malaria rapid diagnostic tests among children in a malaria endemic region in coastal Kenya
Full text linkBackground: In Kenya, malaria case management is based on clinical suspicion and detection of parasite in blood by parasitological or confirmatory diagnosis. Confirmatory diagnosis can be achieved with either microscopy or Rapid diagnostic tests (RDTs). RDTs are relatively new technologies, and their performance in actual conditions of use needs to be evaluated to provide information for appropriate use and to support decision making in procurement. Objectives: To evaluate performance and operational characteristics of three malaria RDTs: CareStart™, First Response®, and SD Bioline™ in the field for diagnosis of infection by Plasmodium falciparum monospecies as well as mixed infections with P. ovale and P. malariae. Methodology: A prospective study with blind comparisons to a gold standard was carried out at Pingilikani dispensary in Kilifi County, Kenya. Blood samples were obtained from 500 febrile children. Three RDTs: CareStart™, First Response® and SD Bioline™ were evaluated against microscopy of Giemsa stained blood films for detection of Plasmodium falciparum and non-falciparum malarial parasites. RDTs specific for P. falciparum only (HRP2 RDTs) and non-falciparum malarial parasites (HRP2/pLDH (Pf/pan) RDTs) were evaluated. Results: Plasmodium sp were detected by microscopy in 242 (48.40%) study participants. Plasmodium falciparum species were the most prevalent (93.3%) in comparison with other Plasmodium species: P. ovale and P. malariae whose prevalence were 2.89% and 3.71% respectively. Compared to microscopy the sensitivities of CareStart™, SD Bioline™, and First Response® RDTs for Plasmodium falciparum using Pf (mono species) kits were: 95.04% (95% CI: 92.34 - 97.73), 95.04% (95% CI: 92.34 - 97.73) and 94.21% (95% CI: 91.3 - 97.11) respectively while the specificities were 78.12% (95% CI: 72.98 - 83.25), 81.10% (95% CI: 76.23 - 85.96) and 78.74% (95% CI: 73.65 - 83.82) respectively. Sensitivities of CareStart™, SD Bioline™ and First Response® RDTs for Plasmodium falciparum using Pf/Pan kits were: 99.02% (95% CI: 98.92 - 99.15), 99.04% (95% CI: 98.92 – 99.15) and 97.56% (95% CI: 97.78 – 97.99), respectively while the specificities were 78.46% (95% CI: 77.61 - 79.30), 78.46% (95% CI: 75.78 - 81.13) and 80.28% (95% CI: 76.73 - 83.82) respectively. CareStart™, SD Bioline™, and First Response® RDTs for non-falciparum sp using Pf/Pan kits both had 100% sensitivity and specificity. Conclusion: Data from this study demonstrate that CareStart™, SD Bioline™ and First Response® RDTs have good operational characteristics and are reliable alternatives to microscopy for diagnosing malaria in children. Key words: malaria, rapid diagnostic tests, microscopy, Plasmodiu
Effect of Remittances from Diaspora on Financial Sector Deepening in the East African Community
Full text linkPurpose – This paper investigated the effect of diaspora remittances on financial sector deepening in the East African Community. Personal diaspora remittances were used as a measure of remittances from diaspora. The three proxies for financial deepening that were employed in the study were domestic credit as a ratio of GDP, total credit provided by the financial sector as a percentage of GDP and degree of monetization, M2 as a percentage of GDP. Methodology – The study adopted an explanatory research design. It employed panel data analysis - fixed effects method, to model the linear regression equation. The population of the study was the five East African Community member countries and covered a 20-year period (1997 to 2016). The data for this study was obtained from the World Bank statistics website. Findings – This study established that there exists a positive relationship between remittances from diaspora and financial sector deepening in the EAC but this relationship is not significant. The three models analyzed in this study, show that a 0.31, 0.08 and 0.28 change respectively, in remittances in the respective models, leads to a unit change in the level of financial sector deepening in the EAC. Implications – The results of this study show that an increase in the level of remittances leads to increased financial deepening in the EAC economies. There is therefore need for the government in liaison with the private sector, to provide a conducive environment for development of financially innovative products that ease and reduce the cost of sending remittances as this will foster further financial deepening, which has the positive effect of financial inclusion, access to credit and economic growth. Value – This study recommended the fostering of activities that are geared towards the ease of sending remittances and cost reduction of sending the remittances through employment of new financial technologies. Further studies have also been recommended to increase the frontiers of the study especially on developed countries in order to gain more conclusive understanding and generalizability of the remittances-financial sector deepening nexus