Factors influencing compliance with accountants code of ethics in county governments of Kenya. (a case of accountants in selected county governments)

Abstract

Financial Scandals continue to rock businesses all over the globe. In Kenya, the situation is no different. The Finance dockets of these businesses are manned by accountants who are members of professional bodies and are governed by a code of ethics whose compliance remains a mirage. This research sought to find reasons as to why accountants fail to adhere to their code of ethics; with a specific focus on County Governments. The general objective of the study was to establish Factors Influencing Compliance with Accountants Code of Ethics in County Governments of Kenya. The specific objectives of the study was to establish the effects of internal controls on the compliance with Accountants’ code of ethics in county governments of Kenya, determine the effects of remuneration on the compliance with Accountants’ code of ethics in county governments of Kenya and assess the effects of independence on the compliance with Accountants’ code of ethics in county governments of Kenya. Four Counties with a fairly large number of registered accountants as per the ICPAK website was researched on; Nairobi, Kiambu, Murang’a and Machakos Counties. The sampling frame of accountants used for this research will be 151 out of a population of 245. The sample was picked randomly from the ministry of finance of the four counties. A questionnaire was administered comprising of both closed and open ended questions. The collected data was analyzed by use of frequency distributions, percentages, mean and standard deviation and Regression analysis .The analyzed data was presented in the form of tables. From the findings of the study it was established that internal controls, remuneration and independence of accountants influenced compliance with accountants’ code of ethics by 72.3%. The study established a positive significant relationship of internal controls, remuneration and independence of accountants on compliance with the code. This was indicated with regression co-efficient of the variables. Thus the study concluded that the three independent variables influence compliance of accountants with their code of ethics. The study recommends the need for county governments and other stakeholders to upgrade, digitalis, maintain strong internal controls, equitably pay accountants as well as involve them in decision making.