INFLUENCE OF AUDITORS’ INDEPENDENCE ON FINANCIAL SUSTAINABILITY OF PUBLIC UNIVERSITIES IN KENYA; A CASE OF MASINDE MULIRO UNIVERSITY OF SCIENCE AND TECHNOLOGY, KENYA
Abstract
In most public universities in Kenya, there are reported cases of financial instability in both public and private university which threatens their financial sustainability. More interestingly, despite complaints from the public and Office of the Auditor General about financial sustainability issues in public universities in Kenya, most audit reports are either politicized or cancelled as malicious and lacking authenticity; a gap that motivated this study to investigate the influence of auditors independence on financial sustainability in public universities in Kenya, a case of Masinde Muliro University of Science and Technology. The study was informed by Limperg’s theory of inspired confidence. Explanatory survey design was used to explain hypothesized relationships, thus the influence of the independent variable (auditors’ independence) on financial sustainability (dependent variable). The study targeted 54 respondents comprising of mainly Financial Officers, Accountants, Heads of Department and Internal Auditors at Masinde Muliro University of Science and Technology. The study assumed census sampling technique. Primary data was collected by means of self-administered structured questionnaires and for purposes of validity and reliability checks, all components of the questionnaires were checked and coded to ensure clarity of words and the accuracy of the statements, then pretested in Moi University, Eldoret. Pertaining data analysis, collected data was coded, cleaned, tabulated and analyzed using descriptive and inferential statistics with the aid of specialized Statistical Package for Social Sciences, version 24. Descriptive analysis such as frequencies, means, and standard deviation was utilized whereas analyzed data was presented in tables and graphs. Further, inferential statistics assessed the nature and the strength of the relationships. Both descriptive and inferential statistics revealed that auditors’ independence significantly influenced financial sustainability in Masinde Muliro University of Science and Technology. The study recommended that public universities finance managers should foster auditors’ independence without compromising or conspiring with them, so as to give authentic audit reports that dully identify financial mismanagement in public universities.
Key Words; Auditors Independence, Financial Sustainability, Public Universities
CITATION: Lung’ayia, M., & Malenya, A. (2020). Influence of auditors’ independence on financial sustainability of public universities in Kenya; A case of Masinde Muliro University of Science and Technology, Kenya. The Strategic Journal of Business & Change Management, 7(3), 1295 – 1304.
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DOI: http://dx.doi.org/10.61426/sjbcm.v7i3.1742
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