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EFFECT OF CORPORATE GOVERNANCE ON FINANCIAL REPORTING QUALITY AMONG NON-FINANCIAL LISTED FIRMS AT THE NAIROBI SECURITIES EXCHANGE, KENYA
The study sought to establsh the effect of corporate governance on financial reporting quality among non-financial listed firms at the Nairobi Securities Exchange, Kenya. The study adopted correlational research design while targeting 36 non-monetary listed entities on Nairobi Securities Exchange, Kenya. The study collected secondary from the Nairobi Securities Exchange print outs and the financial statements of the respective firms on a five year period ranging from 2017-2021. The analysis of the gathered evidence was executed through SPSS tool utilizing means and standard deviations as well as correlation and regression analysis and presented through tables. It was evident that audit quality (β=.443, p<0.05 & t>1.96) had the greatest significant effect on financial reporting quality a followed by firm leverage (β=.058, p<0.05 & t>1.96), board independence (β=.049, p<0.05 & t>1.96) and liquidity (β=.018, p<0.05 & t>1.96). The study concludes that corporate governance is a significant predictor of financial reporting quality. The study recommends the board of directors in the non-financial listed firms at the Nairobi Securities Exchange; Kenya should play a more effective oversight role to enhance the corporate governance mechanisms. The shareholders of the non-financial listed firms at the Nairobi Securities Exchange; Kenya should demand a more accountable and active role on the side of the management. The policy makers working in the non-financial listed firms at the Nairobi Securities Exchange; Kenya should formulate and implement sound policies in regard to corporate governance and financial reporting.
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