Determinants Influencing the Use of Accounting Services by Investment Groups in Kajiado County, Kenya

Abstract

This study will establish the determinants that influence use of accounting services on investment groups in Kajiado County, Kenya. This study analyzed how managers knowledge on accounting services, competence of accountants, trust in professional accountants and size growth of a group influence utilization of accounting services. Resource Based View, Transaction Cost Economics and Agency theories are used to support this study. RBV states that a firm should utilize all the resources it has at its disposal to gain competitive advantage. External accountants are viewed as resources that assist in gaining competitive advantage. TCE states that a firm will prefer to utilize accounting services to reduce its transaction cost if trust exists between the firm and accountants. Agency theory is used to acknowledge that problems will exist between the firm and the accountants and trust will play a major role in resolving conflicts arising. A survey was carried out on investment groups in Kajiado County that are registered with the Ministry of Cooperative and are active. To select sample population, stratified random sampling was applied. Data collection was done by administering questionnaires which had both structured and unstructured questions. Descriptive statistics analysis such as mean and inferential statistics such as regression was used. It was concluded that most of the respondents were conversant with almost all of the accounting services. It was also observed that the mangers perceived the accountant to be competent and that they trusted the accountants. This study confirmed what had been observed by Kamyabi and Devi (2011) that knowledge, competence, size growth and trust in professional accountants had a positive and significant relationship on utilization of accounting services. They also observed that use of advisory services had a positive effect on performance of SMEs. This study recommends the Ministry of Cooperative should educate these groups on importance of utilizing accounting services so as to be able to maximize their benefits. The mangers of the groups should also be trained on basic accounting techniques and management of the groups. Lastly accounting firms should ensure that these groups are aware of the services they provide and at affordable rate.