Strategic choice and performance of audit firms in Kenya
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Date
2015-11Author
Githinji, Stella W
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
The business environment within which the audit firms operate has been very volatile. Audit
firms respond to competition in different ways. Some opt to move into service improvement,
some into divestiture and diversification, while others enter into new markets and others
merge or buy out competitors. With the increasing competition that firms are facing today,
rewards will accrue to those who can read precisely what the clients want by continuously
scanning the environment and delivering the greatest value to the clients. There is limited
empirical evidence on the strategies used by audit firms to improve performance in Kenya.
This study sought to fill the existing research gap by answering the following research
questions, is there a relationship between strategic choice and performance of audit firms in
Kenya? This research problem was studied through the use of a census survey. The
population of this study comprised of 156 employee of (4) Four Audit Firms (Ernst &
Young, Price Waterhouse Coopers, KPMG and Deloitte & Touche) at their Head Offices in
Nairobi. A sample of 78 respondents was selected for this study. The study used a survey
questionnaire administered to each member of the sample population. Quantitative data
collected was analyzed by the use of descriptive statistics using SPSS (Version 22) and
presented through percentages, means, standard deviations and frequencies. The information
was displayed by use of bar charts, graphs and pie charts and in prose-form. Content analysis
was used to test data that is qualitative in nature or aspect of the data collected from the open
ended questions. The study revealed that cost leadership strategy protects the organization
from new entrants, which can be attributed to their adoption of the cost leadership strategy,
which has helped them have lowest costs as well as offer their services in a broad market at
the lowest prices. The study further revealed that perceived quality and brand loyalty
insulates company from competition in an industry. The study further revealed that firms that
adopt the focus strategy have been able to target a particular segment of the market. There is
need for the audit firms to differentiate their services so as to stand out from the crowd. This
way, the firms will be able to offer unique services that are not being offered by their
competitors. Potential investors be informed on various strategies adopted or applied byaudit
firms already operating and therefore prepare themselves accordingly before entering the
industry. The study finding will assist Partners and top management managers to know the
appropriate strategies applicable byaudit firms and adopt the same. The research findings are
useful to policy makers on design policies to assist audit firms in Kenya to improve
performance. The study findings will be useful ICPAK to put in place policies which will
promote competition in the audit industry and put measures in place which will ensure
growth of audit firm. The study findings will add to the existing body of knowledge on
strategies used by audit firms to improve performance.
Publisher
University of Nairobi