Effects of Owner Accounting Practice Competencies on the Financial Performance of Small and Medium Enterprises in Kenya - A Case of Kasarani Sub County, Nairobi City County

Sep 4, 2026

Uploaded by James

Study examines how owner accounting practice competencies affect the financial performance of Small and Medium Enterprises (SMEs) operating in Kasarani Sub-County, Nairobi City County, Kenya. The research addresses dismal SME financial outcomes and high collapse rates, attributed to limited accounting competencies. Four variables—accounting information systems, human resource accounting, accounting outsourcing, and owner accounting orientation—are tested using descriptive design with 254 respondents from 754 SMEs. Results indicate statistically significant positive relationships and explain 27.19% of financial performance variation at the 0.05 level.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages130

Reading Time5 h 28 min

AccessFree to download

Declaration

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EFFECTS OF OWNER ACCOUNTING PRACTICE COMPETENCIES ON THE FINANCIAL PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN KENYA. A CASE OF KASARANI SUB COUNTY, NAIROBI CITY COUNTY BY WANJIRU MINJO REG: 17/00413 A DISSERTATION SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF DEGREE OF MASTER OF SCIENCE IN FINANCE AND ACCOUNTING IN THE SCHOOL OF BUSINESS AND PUBLIC MANAGEMENT, KCA UNIVERSITY, KENYA SEPTEMBER 2018 DECLARATION I declare that this dissertation is my original work and has not been previously submitted or published elsewhere for award of degree. I also declare that this contains no material by other people except where due reference is made and author duly acknowledged. Student Name Reg No. Sign Date I do hereby confirm that I have examined the master’s dissertation of Wanjiru Minjo And have approved it for examination Sign Date Dr. Alfred Nzomo Kithusi Dissertation supervisor KCA University ABSTRACT The study was carried out in the field of finance and accounting practices competencies with focus being on the performance of Small and Medium Enterprises (SMEs) . The study had four variables which had several indicators to determine their effect on financial performance. Performance is contingent to many factors; This study sort to establish the influence of owner accounting practice competencies on the financial performance of SMEs operating in Kasarani Sub-County, in Nairobi City County, Kenya. The Kenyan Small and Medium Enterprise sector immensely contributes to economy and employment generation. However, its financial performance is still dismal as evidenced by the high collapse rate of SMEs in Kenya and specifically in Nairobi City County where very few SMEs survive up to the third generation. This might be attributed to poor accounting competencies by the SME Owners/Managers in the country. There is limited research on the relationship between; accounting information system, human resource accounting, accounting outsourcing and owner accounting orientation, and how they influence performance of SMEs in Kenya. Hence there is dire need for research such as the current one to establish these relationships. It is in this light, that the present study was conducted to lock this knowledge gap by providing recommendations on suitable approaches that can improve performance of SMEs in Kasarani Sub County. In its main objective, the study assessed the effects of owner accounting practice competencies on the financial performance of small and medium enterprises in Kasarani Sub County in Nairobi City County. Four specific objectives were developed and four hypothesis were tested to ; Establish Effects of Accounting Information Systems, Effects of Human Resource Accounting, Influence of Accounting Outsourcing and Effects of Owner Accounting Orientation on Financial Performance of SMEs in Kasarani Sub County, Nairobi City County. The study is anchored on three theories; Resource Based view Theory, Transactional Cost Economics Perspective and Human Capital Theory. The study utilized a descriptive research design, having the Kasarani Sub County’s 754 SMEs as its target population and using 254 respondents as its sample size. The study employed stratified sampling to determine the number of respondents from each ward of Kasarani Sub-county, selected randomly using simple random sampling. In its data collection, structured questionnaire was used as a tool to collect primary data. Validity and reliability tests were done on the research tool before administration. Quantitative analysis technique was employed to produce descriptive statistics and inferential analysis carried out thereafter to establish a study model. The findings established that; accounting information systems, human resource accounting, accounting outsourcing and owner accounting orientation had statistically significant influence on financial performance of SMEs in Kasarani Sub County, Nairobi City

FAQs

What is the main purpose of the study?

The study establishes the influence of owner accounting practice competencies on the financial performance of SMEs in Kasarani Sub-County, Nairobi City County, Kenya.

Which factors are analyzed as determinants of SME financial performance?

The study tests four variables: accounting information systems, human resource accounting, accounting outsourcing, and owner accounting orientation.

What research approach and data collection method were used?

A descriptive research design was used. Structured questionnaires collected primary data from a sample of 254 respondents selected from 754 SMEs using stratified and simple random sampling.

Sep 4, 2026

Uploaded by James