FDL\JlCllL HEPORTLTG PHACTICT:;S

m m~}TYAlr PUBLIC COHPAlTIES..----. -------.--

A Survey of Pu.blishc<l .Annual Reports oi' 58 Kenyan

Public CompzrJiesi'or the Fiscal Years Ended :in

1974, 1975, and 19.'6.

Rr:ancis Marco

A -"c!J".::sissubBitted DJ. pa..rt fUlfilment for the

dec;ree of lIaster of :i:llsi.l'1ess Adm-i"'1j..str2.tioll

1978

A B S T RAe T

The accounting field is full of manyacceptable .•.•78."J'S and

methods of doing things: there are manywa:.:jB of treating and

accounting for certain i terns of accourrts, ll1B..."1Y varieties of

reporting formats, etc. All these are aummed up in what is

normally referred to as "~nerally Accepted Accounting Principles

(GMJ;)It. The accountant is therefore faced with the problem of

chooSing, from the manyacceptable ways and methods, the way or

me+hod to use in ro:ry particular situation. It is also true ..t(jhat

acCOUlltingor financial reportiP~ practices have been changir~

ovez- time. These changes have been brought about by several

factors which include the following:

(1) Recommendationsby accounting bodies allover the world,

including recommendationsby individual accoth~tants§

(2) Changea in the legal l'equirenents and s tatrutee governing

accounting and f~~ial reportL~ practicesj and

(3) Changes in the business '!i'lOrldthat affect .eccourrtfng and

fL~ial reporting practices either directly or indirectly •

. This thesis presents the results of a survey study of the»>

pubf.Lshed annua.L reports of 58 Kenyan public ccmpam.es for the

fiscal years ended in 19741 1975 and 1976. The survey W[)J3 o.i:ned

at eX8nD.:r.d.r..g the finan.cial reporting prac·ci.ces followed by the

58 companf.es OV'81:' the triree year survey pcriccl.~ The thesis

D-l'lalJ'Siscovers mattez-s such as typos of fil1(:U.'lC:i.alstatements

presented, fOl'm and tcrm.:..l:clOf;-Yuscd, accountang trea.tment of

(vi)

(vii)

statC!:J.onts, form and content of tho auditors' report, rom

some other general accounting ini'ormai;ion rclati.."lg to the

survey companies. Particular emphasas has been placed on

the requirements of the CompaniesAct, ~~ references ore

made to the Act from ti.ile to time in the dincussion of most

of the survey itemn. Examples are given in the thesis i'ron

the published annual reports in order to highlight aorae

points made in discussion of sene of the survey i tens 0-

The theois starts, in C'llapter 1, by introducing the

reader to the theoretical framework within WhiC!laccounting

practice loperates. A statement of the purpose of the thesis

is also made in tb~ Chapter. Chapter 2 discusses the methods

used in collection and analysis of>the data f>or the thesis,

and also gives some general ~~tion on the 58 sUl~y

compa-nies. SUl--veyresults are presented in Chapters 3 and 4.

Chapter 3 deals nainly with the survey relating to general

accountd.ng iniorr::lation, '<711ileCh2.pt·~r4 c1eals with the ?e.lance

Sheet and the Profit and. Loss Aecount , Ohapter 5 contains a

summaryof the naf,n eurvey f>indings and possible conclusions on

tho survey r-eaul.ta , The last part of Chapter 5 makes

r-ecommendatzions a.s to t110possible wa;]'1'.1 or iL1proyj.neaccourrta.ng

:?J1dfin.:mcial· reporting practice in KenJ"a~ and suegests poee.i.bl,e

ro:-es..::; of' further r-ceeurch a..nd s tudy in tIle field of UCCOU'::lti:"l;~

ill KCIlYS.c