The Effect of Adoption of International Financial Reporting Standards on the Quality of Accounting Information of Deposit Taking Saccos in Nairobi County

Abstract

The objective of the study was to investigate the effect of adoption of International Financial Reporting Standards on the quality of accounting information of deposit taking SACCOS in Nairobi County. The study adopted descriptive research design. The target population was deposit taking SACCOs in Nairobi County that were dully registered with SASRA. There were 34 deposit taking SACCOs in Nairobi County, and this formed the population of the study. The study adopted a census study approach. The study collected primary data through a closed and open-ended questionnaire. The respondents to the questionnaire were the managers of the Saccos. The data collected was edited, coded, and entered into Statistical Package for Social Sciences (SPSS) which also aided in the data analysis. This study was expected to generate qualitative and quantitative data. The quantitative data analyzed using descriptive and inferential statistics. The qualitative data was generated from the open ended questions and was categorized in themes in accordance with research objectives and reported in narrative form along with quantitative presentation. The quantitative data was analyzed by using descriptive statistics which included frequency distribution tables and measures of central tendency (the mean), measures of variability (standard deviation) and measures of relative frequencies. The inferential statistics included a regression model which established the relationship between variables. Data was presented using tables, charts and graphs. The study found out that as a result of adoption of IFRSs, majority of the SACCOs were transparent and honest in disclosure and presentation of financial statements and that the presentation of accounting information was uniform with other institutions which had adopted IFRSs. Moreover, the financial statements of the SACCOs were comparable with those of other institutions that have adopted IFRSs. It was concluded that adoption of IFRSs in the SACCOs had improved the timely preparation and presentation of financial statements and related disclosures., it had improved the relevance, reliability and understandability of accounting information provided in the financial statements and related disclosures. The study recommends that IFRSs should be fully complied with and more accounting standards that can improve business performance should be adopted. There is also need for increased training so that both the management and the general employees understand the importance of adoption of IFRSs to SACCOs.