The Effect of Computerized Accounting System on Financial Reporting Quality Among Firms Listed at the Nairobi Securities Exchange

Abstract

The overall objective of this study is to establish the effects of computerized accounting systems on the financial reports quality among firms listed at the NSE. A cross-section survey was adopted targeting 62 listed firms at the NSE and census was used. Information was sought from first hand sources and analyzed descriptively and inferentially. The study established that leadership quality had the largest beta (β=.950) that was significant (p<0.05), followed by corporate governance structure (β=.757, p<0.05) and lastly computerized accounting systems (β=.402, p<0.05). The study concludes the computerized accounting system has significant effect on financial reports quality among firms listed at the NSE. The study recommends that the senior managers among the listed firms in Kenya should demonstrate quality strategic leadership to support the quality of financial reports. The internal audit managers of the listed firms at NSE should strengthen the existing internal controls to enhance the quality of financial reports. The policy makers at the Capital Market Authority should stipulate strict regulations with regard to corporate governance and leadership of the listed firms to ensure credible financial reports are generated. The policy makers of the listed manufacturing firms in Kenya should strengthen the existing policies with regard to corporate governance and leadership among these firms.