FINANCIAL AUDITING AND FINANCIAL SUSTAINABILITY OF KISII COUNTY GOVERNMENT, KENYA
Abstract
This study investigated the influence of financial auditing on financial sustainability in county governments in Kenya; a case of Kisii County Government, Kenya. The study was informed by the lending credibility theory, theory of inspired confidence and agency theory. Explanatory survey design was used to explain hypothesized relationships. The study targeted 109 respondents comprising of mainly auditors, finance officers, revenue officer, economist and accountants working in Kisii county government. From a target population of 109 respondents, a sample size of 86 was calculated as per Taro Yamane’s proportional sampling technique formula. Primary data was collected by means of self-administered structured questionnaires. Collected data was coded, cleaned, tabulated and analyzed using descriptive and inferential statistics with the aid of specialized Statistical Package for Social Sciences, version 26. Descriptive analysis such as frequencies, means, and standard deviation was utilized whereas analyzed data presented in tables and graphs. Further, inferential statistics assessed nature and the strength of the relationships. SPSS version 26 is the analysis computer software that was used to compute statistical data. From 86 questionnaires that were dispatched for data collection, 81 questionnaires were returned completely filled. Both descriptive and inferential statistics revealed that all of the study’s independent variables (auditors’ competency, auditors, independence, internal audit standards, audit reporting structure) significantly influenced the dependent variable (financial sustainability in Kisii County Government, Kenya). The study concluded that one, both internal and external auditors’ competency significantly influences audit quality which consequently deters financial mismanagement that can make county governments not able to sustain their budgets; two, well monitored internal audit standards can deter deliberate accounting errors and save county government huge finances hence enable them sustain their financial expenditures. The study recommends that one, county government 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 county governments; two, county governments should support effective internal audit standards that do not compromise audit quality; and finally, county governments should have a transparent and effective audit reporting structure that does not compromise the independence and quality of the internal audit reports.
Key Words: Auditors’ Competency, Auditors’ Independence, Internal Audit Standards, Audit Reports
CITATION: Kinamdali, P. A., Miroga, J., & Otinga, H. (2024). Financial auditing and financial sustainability of Kisii County Government, Kenya. The Strategic Journal of Business & Change Management, 11 (2), 710 – 734. http://dx.doi.org/10.61426/sjbcm.v11i2.2940
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