Influence of Management Training on Compliance With International Financial Reporting Standards By Saccos in Nyeri County, Kenya.

Abstract

Despite IFRS compliance being mandatory requirement in Kenya and high compliance levels in other sectors, the level of compliance in Kenyan SACCOs has been found to be so wanting that they cannot be benchmarked with most of IFRS. This study aimed at establishing the influence of management training on compliance with international financial reporting standards by SACCOs in Nyeri County. The study was anchored on theory of isomorphism. Empirical review of related literature was done. The target population for this study was all SACCOs which have been operating in Nyeri County for at least five years as at end of year 2013 which were 53 SACCOs according to data from the Ministry of Industrialization and Enterprise Development. A sample size of 47 SACCOs was drawn. Stratified random sampling technique was used after categorizing SACCOs based on activities and membership. After stratifying the population, a simple random sample was drawn from each strata. Proportional allocation method was used to allocate a sample size for each stratum. Primary data collection instrument was a semi-structured questionnaire. The questionnaire was tested for reliability through computing Cronbach’s Coefficient Alpha. Validity test of the instrument was done using two groups of experts. Secondary data, for corroborative purposes, was obtained from the financial statements of the SACCOs by use of secondary data collection sheet. Statistical Package for Social Sciences (SPSS) software was used for data analysis .Both descriptive statistics and inferential statistics were conducted. Specifically, model fitness R ANOVA and regression coefficients were generated from a bivariate linear regression model. Presentation of findings was done through tables and graphs. The study found that management training had a significant relationship with compliance with IFRS at 95% confidence level. Training affected compliance with IFRS to a great extent with 69.3% of change in compliance with IFRS being explained by management training. The study concluded that lack of management training had a negative effect on compliance with IFRS among SACCOs in Nyeri County. It was recommended that SASRA should make it mandatory for SACCO managers to attend trainings organized by professional bodies. SASRA should also organize its own trainings to improve SACCOs managers level of training on IFRS.