Analysing the Influence of Accounting Conventions on the Financial Performance of Commercial Banks in Kenya

• Autorzy: Mercy Wangari Macharia , Martin Onsiro Ronald
• Języki publikacji: EN

Abstrakty

EN

The collapse of some commercial banks in Kenya in the recent past has raised the question of the credibility of financial information as a tool for investors to make informed decisions. The study sought to analyse the disclosure practices of accounting conventions on the financial performance of commercial banks in Kenya. The following specific objectives guided the study: to establish the influence of the disclosure, consistency, prudence and materiality of financial reports on the performance of commercial banks in Kenya. A cross-sectional survey was adopted. The target population was 42 respondents who formed the sample size by the census method. The data was collected through questionnaires, secondary data and annual reports and analysed quantitatively and qualitatively. Quantitative data was analysed using descriptive statistics and inferential statistics. The finding shows a moderate positive relationship between disclosure and the performance of commercial banks. The relationship is significant (r = 0.322, p>0.01). The result shows a moderate positive relationship between consistency and performance of commercial banks. The relationship is significant (r = 0.369, p>0.01). The results also show a moderate positive relationship between prudence and the performance of commercial banks at a significance of (r=0.500, p>0.01). On establishing the relationship between materiality and performance of commercial banks, it was found there is a moderate positive relationship with a significance of (r = 0.317, p>0.01). Respondents indicated that the consistency of financial reports has little effect on the net profit of commercial banks. Respondents indicated that prudence of financial reports leads to better organisational performance. The materiality of financial reports affects organisation performance. Prudence in financial reporting affected the decision-making among the investors in the banking industry. The study recommends that commercial banks' management ensure transparency, honesty, consistency and reliability during financial reporting. (original abstract)

Słowa kluczowe

EN

Bank accounting; International Accounting Standards (IAS); Financial performance; Disclosure of financial statements

PL

Rachunkowość bankowa; Międzynarodowe Standardy Rachunkowości (MSR); Wynik finansowy; Jawność sprawozdań finansowych

• Czasopismo: Economics, Management and Sustainability
• Rocznik: 2023
• Tom: 8
• Numer: nr 2
• Strony: 32--43

Twórcy

autor

Mercy Wangari Macharia

• Mount Kenya University, Thika, Kenya

autor

Martin Onsiro Ronald

• Mount Kenya University, Thika, Kenya

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Identyfikatory

DOI

10.14254/jems.2023.8-2.3