Accounting
Edwin K Sitienei
Abstract
This study sought to address the effects of earnings quality on the financial performance of Non-financial firms listed at the Nairobi Securities Exchange(NSE). Three attributes of earnings quality; predictive value, feedback value, and earnings accruals quality, were adopted as measures of earnings ...
Read More
This study sought to address the effects of earnings quality on the financial performance of Non-financial firms listed at the Nairobi Securities Exchange(NSE). Three attributes of earnings quality; predictive value, feedback value, and earnings accruals quality, were adopted as measures of earnings quality. The study adopted returns on assets (ROA) to measure financial performance. A 5-year data (2018-2022) for the 44 non-financial firms listed in the Nairobi Securities Exchange were obtained from secondary data sources. The data were analyzed using Stata 17, and the findings showed that accrual quality and feedback value exhibited a significant positive relationship with financial performance. The predictive value of the earnings revealed an insignificant negative relationship with financial performance. The model was significant at a 10% significance level with a coefficient of 0.492. This implies that earnings quality constructs significantly and positively affect the performance of Kenyan public-listed non-financial firms. The findings of this study have important implications for users of financial information in ascertaining the importance of earnings quality on the performance of Kenyan public non-financial firms. This study is also beneficial to standard setters in Kenya that view the earnings quality as an indirect indicator of the quality of financial reporting standards that have been issued.
Accounting
Edwin Sitienei
Abstract
This study explores the relationship between corporate governance traits and discretionary accruals among non-financial firms listed in NSE. Our study discovered that the board size has a relatively insignificant negative impact on the discretionary accruals of non-financial firms listed in the NSE using ...
Read More
This study explores the relationship between corporate governance traits and discretionary accruals among non-financial firms listed in NSE. Our study discovered that the board size has a relatively insignificant negative impact on the discretionary accruals of non-financial firms listed in the NSE using a sample of 44 publicly traded non-financial firms based on 2012-2021 data. The findings on board independence indicate a significant positive relationship at 10% significance. The results suggest that board independence doesn't reduce discretionary accruals in non-financial firms listed in NSE Kenya. The CEO duality, on the other hand, revealed a statistically positive insignificant effect on discretionary accruals, contrary to expectations. The research findings also pointed to income-decreasing accruals earnings management as depicted by a mean of -.083 discretionary accruals in the descriptive statistics. On the effects of board meetings on discretionary accruals, the study found an insignificant negative relationship. The findings of this study may be useful for regulators to re-evaluate their laws and mandates regarding firms and their corporate governance structure, as well as for legislators who have the power to nominate board members to select competent and knowledgeable personnel.
Accounting
Edwin Sitienei
Abstract
This study examines the relationship between Audit Committee Attributes and Changes in Financial Reporting Quality Among Manufacturing Firms in Kenya. Using a sample of publicly listed firms based on 2010-2018 data, our study finds that the expertise of the Audit Committee has an insignificant positive ...
Read More
This study examines the relationship between Audit Committee Attributes and Changes in Financial Reporting Quality Among Manufacturing Firms in Kenya. Using a sample of publicly listed firms based on 2010-2018 data, our study finds that the expertise of the Audit Committee has an insignificant positive impact on the financial reporting quality of financial reports, measured by accrual quality. Audit committee size and financial reporting quality show mixed findings for two measures of financial reporting quality. The results show a positive, statistically significant effect between the size of the audit committee and discretionary accruals. On the contrary, the size of the audit committee shows a statistically positive insignificant relationship with accruals quality. Audit committee independence has a statistically significant effect on both accruals' quality and discretionary accruals as measures of financial reporting quality. Finally, audit committee meetings on the financial reporting quality show a negative nonsignificant relationship between audit committee meetings on both accruals' quality and discretionary accruals. The results of this research may be of interest for policymakers who have the authority over the appointment of audit committee members to choose independent and expert individuals, for regulators to reconsider their rules and mandate concerning corporations and their corporate governance structure.
