Financial accounting standards:An analysis of the standard Settting process in Kenya
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This study attempts to provide a conceptual and analytical framework against which financial accounting standard setting process in Kenya can be evaluated and reformed. Section one shows that a need exists for financial standards and identifies the key areas which require to be standardized. Section two analyses the various forces and considerations involved in the standardization process. On the basis of this analysis, a normative conceptual model which captures the salient issues that affect the quality of standards is constructed. Section three is descriptive and deals with the current institutional arrangements and processes that have been built to set Kenya Accounting Standards. The overriding influence of the U.K. accounting practice is emphasized. Section four is a critical review of the weaknesses in the current standard setting process. It utilizes the model developed in section two as a measuring yardstick. It is shown that all the requirements necessary to enable the setting of optimal standards are absent. The constraints contributing to this state of affairs are also identified and discussed. ·The paper ends with a call for the establishment of a Kenya Accounting Standards Authority along similar lines to the Kenya Bureau of Standards.