| dc.description.abstract | The stakeholders in global business want to know what should be reported to them in
terms of the profit or wealth maximization objectives and this can only be possible if the
correct and necessary accounting reports are provided to them. Private entities with
scarce resources (funds, personnel, among others) constitute the family member types of
these accounting services, which have emerged with some privilege, in view of providing
services and outsourcing of these services. The following general research question
formulated the overall study:; What is the impact of outsourcing accounting services on
the quality of financial reports among the Small and Micro enterprises in Nairobi County,
Kenya? The following specific goals will serve as the foundation for the research: The
specific objectives of the study are as follows: The research aims to: to assess the effects
of outsourcing book keeping services on the quality of financial reports in Kenya; to
assess the effects of outsourcing auditing services on the quality of financial reports in
Kenya; to assess the effects of outsourcing tax reporting services on the quality of
financial reports in Kenya; and to assess the effects of outsourcing IT on the quality of
financial reports in Kenya. Our investigation on the impact of outsourcing tax
preparation, bookkeeping, auditing, and other IT services on the calibre of financial
reporting is built around two primary research techniques: Regression Analysis and
correlation within the scope of Correlational Research Methodology. The target
population of the study was 3330 SMEs, and 358 SMEs from the population were
selected out of a obtained by using Taro Yamane proportional sampling technique
formula. Nakuru was employed as a pilot study to determine the viability of the
questionnaire, and the reliability of the instrument was assessed by use of Cronbachs alpha for test re-test intention. These findings provide empirical evidence that support
previous studies, which indicate that outsourcing leads to an enhancement in financial
reporting quality. There is also empirical support on the fixed variables obtained from
regression analysis supporting the arguments, asserting the impact of outsourcing on the
quality of audit on financial reporting. The results suggest that accounting outsourcing,
especially with respect to bookkeeping, auditing, tax reporting, and IT services, enhances
the financial reporting quality among SMEs. Hypothesis Chooses analysis the results,
with the help of regression coefficient, it can be seen that there is a direct relationship
between quality of financial reporting and level of outsourcing. In this respect, the
findings of this study are relevant from a theoretical perspective to the sundry theories
that stipulate aspirations and goals as important determinants of individuals’ behavior and
decisions. From an academia standpoint, the study contributes to newly advance
knowledge on two research topics and specifically, outsourcing and financial reporting
quality in the context of SMEs and offer substantive evidence about the characteristics of
the potential gains of outsourcing strategies for the SMEs. This research is valuable as the
findings could be useful as the focus in today’s context is on the quality of the financial
reporting and its improvement with special regard to the owners, managers and even
policymakers to determine and define role and potential advantage that can be obtained
from the outsourcing for the improvement of the quality of the financial reports which are
very essential for making appropriate decisions. This has helped to provide the
answerability and competitive edge of SME in the market place. | en_US |
