| dc.description.abstract | Disclosure of financial information is important. It facilitates
understandability of financial reports by the users. Several
regulatory agencies have stipulated minimum disclosure
requirements. However there is no 'policing' system to
enforce adherence to such disclosure requirements.
Given this atmosphere, do companies actually adhere to
minimum disclosure requirements? If they do, then to what
extent? Are there categories of companies that adhere more
than others? Which group if any is more lax in it's adherence
to these requirements?
This study attempted to answer some key questions on the
extent of adherence to mandatory disclosure requirements
by public companies in Kenya. The specific objectives of the
study were:
1. To determine the extent to which public companies in Kenya
adhere to mandatory-disclosure requirements of the companies Act.
Chapter 486 of the laws of Kenya, the rules and regulations of
the Nairobi Stock Exchange and the Kenya Accounting Standards of
the Institute of Certified Public Accountants of Kenya.
2. Compare the level of adherence to mandatory disclosure
requirements by v~rious categories of companies viz:
Listed and Unlisted Companies.
Large and Small Companies.
Those audited by large audit firms and those audited by
small audit firms.
Various industrial classification of
companies i.e. manufacturing, finance, wholesale/retail and
agriculture.
The conclusion of the study is that the overall level of
adherence to disclosure requirements is quite high in Kenya. The
highest level of adherence is 93% by a small listed firm, audited
by a large audit firm. The lowest level of adherence is by a
small unlisted firm, audited by a small audit firm. the levelis 41%
The overall level of adherence is 78.16%. Listed companies have
an adherence level of 85.7% while unlisted ones have 70%.
Companies audited by large firms have an adherence level of
84.11% while those audited by small firms have a level of 75.09%.
Manufacturing companies have an adherence level of 84.31%,
Finance ones 72.53%, wholesale companies 78.18% while
agricultural companies have a level of 85%. The Chi-square test
of independence showed all these differences in the means to be
statistically si..gnificant .
When it comes to size of company large companies had a mean level
of 84.11% while small ones had a level of 75.09%. However, upon
being tested statistically using the Chi-square test of
independence the difference was determined to be statistically
insignificant. This means that size has no impact on the level
of adherence to disclosure requirements. The first three
variables i. e. listing status I audit firm size and industrial
classification do have an impact on the level of adherence to
disclosure requirements. | en |
