Financial Reporting Practices And financial Performance Of SACCOS In Uasin Gishu County, Kenya

Abstract

The purpose of this study was to determine the effect of financial reporting practices on financial performance of SACCOs in Uasin Gishu County, Kenya. The specific objectives of the study were to; establish the effect of disclosure of financials on performance of SACCOs, examine the effect of comprehensiveness on performance of SACCOs, assess the effect of audience consideration on performance of SACCOs. The study was guided by Stakeholders Theory and Agency Theory. The study adopted a descriptive survey design. Study was carried out in SACCOs in Uasin Gishu County, Kenya. According to the SASRA and the Ministry of Trade and Cooperatives, there are 34 SACCOs in Uasin Gishu County, Kenya. The study therefore targeted 34SACCOs and in each 2 respondents were selected (1 manager and 1 accountant). The target population was therefore 68 respondents. Since the population is small (68) census was used to select the sample from the entire population. Questionnaire was used in data collection. The researcher conducted pilot study to ascertain validity and reliability of research instruments. Descriptive statistics as well as regression analysis with the aid of SPSS were used to analyze the collected data. The study findings indicated that there was a significant relationship between disclosure of financials and financial performance (p=0.000); there was a significant relationship between comprehensiveness and financial performance (p=0.000) and that there was a significant relationship between audience consideration and financial performance (p=0.000). The study concluded that financial position reporting is done on a full disclosure basis and that monthly summaries of comprehensive income are prepared and used in the firm. Also the entire financial reporting exercise in the SACCO considers the information usage of all internal users. The study recommended that there is need to improve on the financial reporting practices of the referred companies to improve its financial reporting standards.