EFFECT OF INTERNAL CONTROL SYSTEM ON THE OPERATIONAL PERFORMANCE OF ORGANIZATION: A CASE STUDY OF KENYA REVENUE AUTHORITY (KRA) HEADQUARTER, KENYA

Lorna Chepkorir Chepkonga - Student, Master of Public Policy and Administration, Kenyatta University, Kenya

Daniel Mange Mbirithi - Lecturer, Department of Educational Management, Policy and Curriculum Studies, Kenyatta University, Kenya

ABSTRACT

The issue of financial crisis has persisted despite the fact that internal control systems have been in place for many years in the majority of organizations. However, the current research aims to determine the effect of the internal control system on operational performance of Kenya Revenue Authority. The survey objectives were; to explore the effect of control environment, risk assessment, control activities and automation on the performance of Kenya Revenue Authority. The survey was anchored by New Public Management theory and Contingency Theory. A descriptive research design was utilized. The research targets 640 employees working at finance, administration and internal audit departments. The study sampled 128 respondents. Questionnaires were utilized to gather primary data. Both quantitative and qualitative data were collected. Secondary data were gathered from annual financial reports. Quantitative data were analyzed descriptively and inferentially. Qualitative data were analyzed through themes and presented in verbatim forms. Only frequency, percentage, means, and standard deviations were utilized in descriptive statistics. Regression modeling and product moment correlation were used for inferential statistics. Graphs and tables were used to display the findings. The findings show that coefficient of correlation was 0.865, an indication that the study variables significantly influenced operational performance of KRA. Coefficient of adjusted determination was 0.724 which translates to 72.4%. This indicates that variations in dependents variable was explained by the independent variables (risk assessment, control environments, control activities and automation). Also, the findings from regression coefficients revealed that risk assessment, control environments, control activities and automation significantly affect the operational performance of KRA since the P-value is less than 0.05. The study concludes that internal control systems have statistically significant relationship with operational performance of Kenya Revenue Authority. The study concludes that KRA should establish strong internal control policies that will help the firm achieve its goal of optimizing revenue collection. The study recommends that management needs to be dedicated to the system's operations, set policies and processes for authorizations at a high enough level, and make sure that clear lines of authority and responsibility have been established to guarantee policy and procedure compliance. Additionally, managers need to make sure that roles in the department responsible for collecting revenue are clearly defined, train personnel on how to use the accounting and financial management system, and finally make sure that management promptly explains any differences between actual and budgeted income.

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CONSISTENCY TEST OF DIVIDEND PAYOUT DETERMINANTS IN GHANA

Eliasu Nuhu - Faculty of Business Administration (Department of Finance), Islamic University College, Ghana

ABSTRACT

This study investigated the consistence of the determinants of dividend payout in Ghana. Secondary data collected for a 10 year period (i. e 2005-2014) which was divided into two periods of 2005-2009 and 2010-2014 for the purpose of ascertaining the consistent determinant(s) of dividend payout in Ghana were analyzed using the Ordinary Least Squares (OLS) panel regression technique. The findings revealed that, of all seven factors considered to have influence on dividend payout in previous studies in Ghana (i. e profitability, the square of profitability, board size, board independence, leverage, audit type, and taxes) only board size showed significant consistence across the two span period considered for the study. The outcome of this study was also consistent with the signaling theory, agency theory and the tax-effect hypothesis.

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FUND CHARACTERISTICS AND FINANCIAL PERFORMANCE OF COLLECTIVE INVESTMENT SCHEMES IN KENYA

Kalekye S. Ndanu - Master of Business Administration (Finance) Kenyatta University, Kenya

James M. Gatauwa (PhD) - Department of Accounting and Finance, Kenyatta University, Kenya

ABSTRACT

A collective investment scheme is a plan where many investors who share the same financial goal pool together funds and appoint a professional manager of these funds to do the investment on their behalf at a fee. This makes investment in collective investment schemes more cost effective in accessing a several shares/ equity, bonds, fixed deposits and treasury bills. Managing performance of collective investment schemes involves use financial ratios such as profitability ratios and leverage ratios. The general objective of this research project was to determine the effect fund characteristics on the financial performance of collective investment schemes in Kenya. The specific goals of the study were; to investigate the impact of that institutional factors, investment strategy, the regulatory framework and lastly to the scheme products on the performance of collective investment schemes in Kenya financially. The study was grounded on theories such as: the Capital Asset Pricing Model (CAPM), the Keynesian Theory, the Arbitrage Pricing Theory (APT) and the Theory of Financial Deepening. The researcher used secondary data in the study and the 21 Nairobi based CISs constituted the target population. Because of the small CIS population, Census was used in the study. The stata method was also used by the researcher in the analysis of data. Diagnostic tests and panel data modeling was carried out simultaneously. The study took ethical considerations into account. Study findings will bridge the knowledge gap and also make an improvement on the academic reference material on performance of Kenyan CIS. This study also expanded the available empirical evidence by using return on investment (ROI) metric as measure of the CIS performance. It concluded that institutional factors have a significant effect on return on investment (ROI), the findings further showed that scheme products had an effect on the CIS performance. The study concentrated on Collective investment schemes in Kenya which operated between 2018 and 2022, a period during which possibly some CISs that either had not existed or were just starting up leading to unbalanced panels being generated. Secondary data that was used could also have resulted into undetected errors. The research suggested that further studies can be done focusing on examining the effect of funds characteristics on other institutions within the capital markets in Kenya. This will help in improving the available knowledge on the elements that promote returns on investments of new players in the country’s finance industry.

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EFFECT OF SOCIAL MEDIA STRATEGIES ON COMPETITIVENESS OF INVESTMENT MANAGEMENT FIRMS IN KENYA

Allan Mbugua Munene - Mount Kenya University, Kenya

Dr. Rebeccah Ann Maina - Mount Kenya University, Kenya

ABSTRACT

Investment management firms play a crucial role in the capital raising process for firms. Kenya's investment sector is yet to realize its full potential despite being one of the most competitive in East Africa. The use of social media is slowly catching up though the move has been very gradual. This is evidenced by the presence of a significant number of organizations using Twitter, Facebook, You-tube and other social media networks. However, little is known about the usefulness of social media in distinguishing investment management firms from their rivals. This study therefore sought to establish the effect of social media strategies on competitiveness of investment management firms in Kenya. The study specifically focused on the effect of social media advertisement strategy, social media knowledge sharing strategy, search engine optimization, and social media customer engagement (customer relations) strategy on competitiveness of investment management firms in Kenya. This study was hinged on the social exchange theory and supported by the following theories: social penetration theory, resource based theory, and Technology Acceptance Model. The study used descriptive research design. The target population was 13 homogeneous investment management firms in Kenya. The unit of analysis was 681 respondents including senior, middle and lowlevel management staff. The study selected the respondents using stratified proportionate random sampling technique. The primary research data was collected from the management staff working at Investment management firms using a questionnaire. The quantitative data in this research was analyzed by descriptive statistics using IBM Statistical Package for the Social Sciences (SPSS) version 27. Descriptive statistics included mean, frequency, standard deviation and percentages to profile sample characteristics and major patterns emerging from the data. In addition to measures of central tendencies, measures of dispersion and graphical representations were used to tabulate the information. To facilitate this Likert Scale was used to enable easier presentation and interpretation of data. Content analysis was also used in processing of this data and results were presented in prose form. The analyzed data was then interpreted and presented in frequency tables, graphs and pie charts. In addition, the researcher conducted a Pearson’s correlation and a multiple regression analysis so as to determine the relationship between variables. The research established that social media increased PR activity, and provides the most persuasive possible selling message to the right prospects. Moreover, the study found that knowledge shared between supervisors and subordinates. Further, the study found that it was uncertain whether social media: allows instant messages between the customers and the organization, and keeps in touch with the customers. The study further found that it was uncertain whether customer feedback on their social media pages is a major key to discovering and solving their customer problems. The study concluded that social media advertisement strategy had the greatest effect on competitiveness of investment management firms in Kenya, followed by social media customer engagement (customer relations) strategy, then social media knowledge sharing strategy, while search engine optimization strategy had the least effect on competitiveness of investment management firms in Kenya. The study recommends that the firms should increase brand awareness by interacting and knowing their audience on their terms and making engagement easy and attractive, this will drive more sales and revenue. The study also recommends that the investment management firms need management to enhance the use search engine optimization to optimize the websites so as to attract more visitors to their sites reach and cover larger target audience in order to extend their reach to broader geographical areas at lower costs.

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