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Browsing by Author "Kariuki, Samuel N."

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Application Of Internal Control System In Fraud Prevention In Banking Sector
(2020-03) Nyakarimi, Samuel N.; Kariuki, Samuel N.; Kariuki, Peter
The main purpose of the study was to establish the effect of internal control system on fraud prevention in banking sector in Kenya. The study involved all the banks where branch managers, operations managers and cash supervisors were sought for the study. The study analysed 117 questionnaires from respondents. Factor analysis was used to reduce the number of variables for analysis purposes. Correlational research study and structural equation model were applied in the study to establish the relationship between variables and in analysis of hypotheses. The study found that control environment and control activities have no statistically significant effect on fraud prevention whereas risk assessment, monitoring of activities and communication of information have statistically significant effect on fraud prevention. Discussions based on the results and related studies were provided. Limitations of the study were highlighted. Recommendations based on the findings were provided. The recommendations were on policy, practise and further research in the same or related areas.
Determinants of Corporate Capital Structure among Private Manufacturing Firms in Kenya: A Survey of Food and Beverage Manufacturing Firms
(Human Resource Management Academic Research Society, 2014-07) Kamau, Guandaru C.; Kariuki, Samuel N.
The purpose of this study was to investigate factors influencing corporate capital structure in private firms in Kenya. Although the capital structure issue has received substantial attentio n, it is noteworthy that most of the empirical work done focuses on data derived from developed economies that have many institutional similarities and their applicability in developing markets such as Kenya is not documented. Yet, the maintenance of an optimal capital structure is considered as one area where decision makers can influence the company’s value and risk. Specifically, the objectives of the study were to establish whether growth opportunities, firm size, firm profitability, and asset tangibility influence corporate capital structure. The study adopted a descriptive survey research design. The study population comprised 121 Food and Beverage private manufacturing firms registered with the KAM that are located in Nairobi and surrounding area. A sample of 36 firms was selected for the survey using stratified random sampling technique from which 30 questionnaires were returned. Primary data was sourced through personally administered questionnaires to the CFOs. Data was analyzed using descriptive statistics and inferential statistics. Multiple regression analysis was used to determine the interplay between the independent variables and dependent variable. Based on the findings, the study concludes that growth opportunities positively influence capital structure; firm size negatively influences the capital structure, there is an insignificant negative relationship between firm profitability and the capital structure, and there is insignificant positive interaction between asset tangibility and the capital structure of private firms in Kenya.
Determinants of Corporate Cash Holdings: Evidence from Private Manufacturing Firms in Kenya
(GreenField Advanced Research Publishing House, 2015-06) Kariuki, Samuel N.; Namusonge, Gregory S.; Orwa, George O.
Cash is an important requirement to ensure continued operations, yet excessive cash holdings might result in many problems which include; higher opportunity costs of holding cash, cash abuse, a tool for obtaining the controlled self-interests and the higher agency costs. The study established that there is a negative and insignificant linear relationship between growth opportunities and corporate cash holdings. The study also revealed that leverage is a significant positive determinant of corporate cash holdings in line with the precautionary motive. In regard to firm size, the study findings indicate that firm size positively determines corporate cash holding. Further, the study revealed that there is a negative linear relationship between likelihood of financial distress and cash holdings. The findings also confirmed a positive relationship between cash flow variability and corporate cash holdings. The study therefore concludes that; leverage, firm size, likelihood of financial distress and cash flow variability determine corporate cash holdings among private manufacturing firms in Kenya.
Determinants of tax compliance by small and medium businesses in Embu County, Kenya
(2019-04) Kariuki, Samuel N.; Njeru, Zachary Mukundi J.
Small and medium enterprises are a key engine of economic growth in both developing and developed countries. Small and medium businesses being profit making institutions are expected to pay taxes to the government. Therefore, tax compliance is critical in all economies which recognize the role played by revenue collected from tax in national development. Nonetheless, developing countries are dominated by low tax compliance levels, in the face of the frequent appeal from tax collectors for voluntary compliance. As a result, identification of tax evasion approaches and ways to diminish it is one of the central aims of many governments’ agenda with the view of achieving higher levels of compliance. As such, many governments have embraced administrative measures such as fines, penalties, rates and tax audits to enforce tax compliance. Interestingly, despite the phenomenal growth of small and medium businesses, the tax collection from the sector is still low. This study therefore, sought to establish the determinants of tax compliance among small and medium businesses in Embu County, Kenya. The study sampled 185 enterprises in Embu County using stratified random technique. The findings show that fines and penalties, tax compliance costs and tax knowledge and education significantly influence tax compliance among small and medium businesses in Embu County. The study recommends that the Kenya Revenue Authority should prepare education and training programs to ensure that small and medium businesses embrace voluntary compliance with all the tax requirements. Further, the study recommends that Kenya Revenue Authority should also evolve policies to decrease tax compliance cost incurred by small and medium businesses to avoid curtailing their growth potential and inspire voluntary tax compliance.
Equity financing and financial performance of small and medium enterprises in Embu Town, Kenya.
(2017-05) Njagi, Irene K.; Maina, Kimani E.; Kariuki, Samuel N.
Capital structure comprise of a mix of debt and equity. Managers used various combinations of debt and equity that increases the net worth of business at the same time reduces the cost of obtaining finance. Financial decisions affected the financial performance of SMEs but vary from one firm to another. This is due to the limited access to finances and ability of the manager to fully utilize the resources available. SMEs are of significance to the economic development of any state regardless of the development status. Despite their importance SMEs are characterized with slow growth rate and three out of five SMEs fail in their first three years of operation. The continued poor performances have led to decline in growth and eventually death of the SMEs. The growth of the SMEs highly depended on the investment decisions made by the entrepreneurs and lack of access to finances has created financial gaps that have fueled the challenges that SMEs face. The study therefore analyzed the effect of equity financing on financial performance of SMEs in Kenya. The study adopted a descriptive survey research design. The target population of study was 300 SMEs from which a sample size of 60 SMEs was drawn. Pretesting of the research instrument was done to determine the reliability of the questionnaire by use of Cronbach alpha coefficient. Content validity of the questionnaire was used to ensure that the questionnaire answered the research questions. The primary data was collected using self-administered questionnaire while secondary data was obtained from audited financial statements and analyzed by use of SPSS. Data analyzed capture descriptive statistic which included mean, standard deviation and variance. Inferential statistic included Pearson’s correlation and multiple regressions. The study revealed that SMEs had greater preference for contribution from friends and ploughing back profit as a source of equity finance. Angel investors as a form of equity financing has not gained acceptance as a source of finance. From the study it was evident that equity finance had a positive relationship to financial performance of the SMEs. Equity offered a lifelong financing option with no or minimal cash outflow inform of interest. The study also noted that the performance of the SMEs was largely affected by the source of finance and the liquidity position of the business. The study therefore recommended that SMEs should embrace angel investors as equity financiers since they provide the start-up capital to the SMEs. Angel investors also provide managerial and book keeping skills to the entrepreneurs thus enhancing the accountability and efficient use of the financial resources at hand. The financial institutions need to create awareness and educate the entrepreneurs on other products available to finance the SMEs.
Exploring internal auditor independence motivators: Kenyan perspective
(Science Publishing Group, 2014-03) Kamau, Guandaru C.; Kariuki, Samuel N.; Mutiso, Agnes N.
The institute of internal auditors expressed the role of internal audit as that providing objective assurance and consulting services designed to add value and improve an organization’s operations. In performing thisrole the internal auditors are required by the international standards to exercise professional independence and objectivity. Audit independence means freedom from conditions that threaten mental attitude which is unbiased. The literature suggests several factors which affect the audit independence in Kenya, which are explored in this study. The study collected its data using a self-made questionnaire which was distributed amongauditors in Kenya so as to establish the status ofinternal auditor’s independence in Kenya. The data collected was subjected to multiple regression analysis so as to testhypotheses and make conclusions on internal audit independence and its motivators in Kenya. The study established that that auditor’s involvements in management and audit committee effectiveness, among other factors have significant influence on the internal auditor’s independence in Kenya.
Factors Influencing Sample Size for Internal Audit Evidence Collection in the Public Sector in Kenya
(IJAME Publication, 2012) Kamau, Guandaru C.; Kariuki, Samuel N.
The internal audit department has a role of providing objective assurance and consulting services designed to add value and improve an organization’s operations. In performing this role the internal auditors are required to provide an auditor’s opinion which is supported by sufficient and reliable audit evidence. Since auditors are not in a position to examine 100% of the records and transactions, they are required to sample a few and make conclusions on the basis of the sample selected. The literature suggests several factors which affects the sample size for audit purposes of the internal auditors in the public sector in Kenya. This research collected data from 32 public sector internal auditors. The research carried out simple regression and correlation analysis on the data collected so as to test hypotheses and make conclusions on the factors affecting the sample size for audit purposes of the internal auditors in the public sector in Kenya. The study found out that that materiality of audit issue, type of information available, source of information, degree of risk of misstatement and auditor skills and independence are some of the factors influencing the sample size determination for the purposes of internal audit evidence collection in public sector in Kenya
Financial Statements Manipulations Using Beneish Model and Probit Regression Model. A Case of Banking Sector in Kenya
(2020-03) Nyakarimi, Samuel N.; Kariuki, Samuel N.; Kariuki, Peter
The main objective of the study was to establish whether the banks in Kenya were involved in financial statement manipulations. The study involved all the banks registered and operating in Kenya and whose financial statements are published for public consumption. Beneish five-variable model was first used to categorize the banks as likely non-manipulators and likely manipulators. The probit regression model was used to determine non-manipulators and manipulators based on the averages derived from non-manipulators using Beneish five-variable model. The results obtained showed that 78.8% of all banks were not involved in financial statement manipulations while 21.2% were involved in financial statement manipulations. The study concluded that some banks that were involved in financial statement manipulations. The study recommended that both internal and control auditors should compute individual indices to determine whether the preparers of financial statements were involved in manipulations. Further it was recommended that the organizations should enhance and strengthen the ICS to seal the loopholes utilized in financial statement manipulations.
Fintech, Asset Portfolio Modeling and Financial Performance of Investment Firms in Kenya
(IDOSI Publications, 2021) Gitonga, Elizabeth N.; Kariuki, Peter W.; Kariuki, Samuel N.
The purpose of this study is to determine the influence of fintech asset portfolio modeling on the financial performance of investment firms in Kenya. The study was guided by capital asset pricing model. Both descriptive and explanatory research designs were employed in this study. The study population was 57 investment firms. Data was collected using questionnaires and an in-depth interview guide. The use of robo advice, online asset visualization, use of passive investment funds in managing investment portfolios and asset management services have positive and significant relationship with performance of investment firms. However, automated trading has a positive but insignificant with performance of investment firms. However, personal financial management is negatively and significantly related with performance of investment firms. The study concluded that fintech asset portfolio in the management assets enhance financial performance; however, the services remain underdeveloped in some investment firms. The study thus recommends for the use of fintech asset portfolio in the management firms assets. Robo-advisors may help create an opportunity for asset managers looking for cheaper alternatives to receive advice on how to manage assets.
Firm Characteristics and Corporate Cash Holdings: A Managerial Perspective from Kenyan Private Manufacturing Firms
(GreenField Advanced Research Publishing House, 2015-04) Kariuki, Samuel N.; Namusonge, Gregory S.; Orwa, George O.
The purpose of this study was to investigate the managerial perspectives on the firm characteristics and corporate cash holdings among in private manufacturing firms in Kenya. Several international studies show that companies retain important cash holdings. Yet, the prevalent questions have been: Why do firms hold huge amount of cash? Is there an optimum level of cash holdings? A review of the extant literature reveals that mostly the current studies depend on secondary data to provide evidence on corporate cash holdings. This survey-based study sought to bridge this gap in the literature by examining chief finance officers of private manufacturing firms to comprehensively investigate the corporate cash holdings from a managerial perspective. A sample of 156 firms was selected for the survey using stratified random sampling technique from which 117 questionnaires were returned. The primary data was sourced through personally administered survey questionnaires to the chief finance officers. Data was analyzed using descriptive statistics and inferential statistics (independent sample t-test). The study concludes that CFOs of private manufacturing firms in Kenya are of the view that growth opportunities, leverage and debt structure, firm size, likelihood of financial distress and cash flow variability are all important drivers of corporate cash holding policy.
Interest rate regulation and sustainability of microfinance institutions in Nairobi County, Kenya.
(2017-05) Kathomi, Ann; Maina, Kimani E.; Kariuki, Samuel N.
Microfinance Institutions services have continued to play an important role in Kenyan economy. It is viewed as the provision of financial services to the poor and low income group. Microfinance Institutions in Kenya have gained wide recognition since 1990’s for the role they play in providing financial services to the low-income households, and their contribution to poverty alleviation. Despite this vital role, the interest rates charged by the MFIs in Kenya have been relatively high ranging between 20% - 30%. This has raised concerns with policy makers on how MFIs can fulfill their social obligations while charging their clients interest rates that are higher than those offered by non-microfinance institutions such as traditional commercial banks and SACCOs. The objective of the study was to determine the effects of interest rate regulation and sustainability of microfinance institutions in Nairobi County, Kenya. The study was guided by liquidity preference theory. The study employed a cross - sectional descriptive survey research design. The target was 49 microfinance institutions operating in Nairobi County, Kenya. A census was conducted on all the 49 microfinance institutions in Nairobi County. The primary data was collected by use of questionnaires whereas secondary data was collected by use of a record survey sheet. Pretesting was done to determine the reliability and validity of the questionnaire. The data collected was analyzed using Statistical Package for Social Sciences (SPSS). The study established that changes in interest rates by the government affected sustainability of MFIs. The Pearson correlation and ANOVA results showed that the relationship of lending rate and sustainability of MFIs is negative and statistically significant. This means that increasing the interest rate reduces the return thus rendering the MFIs unsustainable. The government and other policymakers should come up with better interest rates policies that will make MFIs more sustainable.
Mediation Effect of Macro-Economic Factors on the Relationship between Banks’ Financial Soundness and Financial Performance
(2020) Kirimi, Peter N.; Kariuki, Samuel N.; Ocharo, Kennedy N.
Analyzing the effect of macro-economic factors is essential for business growth. The study analyzed mediation effect of macroeconomic factors on the relationship between financial soundness and financial performance of 39 commercial banks in Kenya using data from 2009 to 2018. The study was modeled on the theory of production with CAMEL variables as factor inputs and financial performance measures as factor outputs mediated by macro-economic factors. The study found that gross domestic product growth, interest rate, exchange rate and inflation had a mediating effect on the relationship between banks financial soundness and net interest margin. In addition, gross domestic product growth, interest rate and exchange rate were not mediators on the relationship between financial soundness and earnings per share as a financial performance measure. The study also established that exchange rate had mediation effect on the relationship between financial soundness and net interest margin and return on assets respectively. Further, inflation was found to have a positive mediation effect net interest margin, earnings per share and return on assets as measures of financial performance, there was absence of mediation effect when return on equity was used as financial performance measure. Bank management needs to understand the direction of the effect of mediation of macro-economic factors on banks’ financial soundness for effective financial soundness policy formulation to improve financial performance.
Moderating Effect of CEO Tenure and Managerial Experience on Firm Specific Determinants of Corporate Cash Holdings
(Seventh Sense Research Group (SSRG), 2015-04) Kariuki, Samuel N.; Namusonge, Gregory S.; Orwa, George O.
The study examines the moderating effect of CEO tenure and managerial experience on firm specific determinants of corporate cash holdings among private manufacturing firms in Kenya. The research employed the upper echelons theory to identify CEO characteristics that are linked to various organizational processes and outcomes such as cash holding. This survey-based study selected a sample of 156 private manufacturing firms from the firms registered with the KAM that are located in Nairobi and surrounding area using stratified random sampling technique. The research collected primary data using selfadministered questionnaires to gather self-reported financial measures from the CFOs. The study employed stepwise multiple regression analysis to determine the moderating effect of CEO tenure and managerial experience on independent and dependent variables. The study concludes that the CEO tenure significantly moderates firm size, growth opportunities, and likelihood of financial distress as determinants of corporate cash holdings. Further, the study concludes that CEO managerial experience in other industries significantly moderates firm size and cash flow volatility determinants of corporate cash holdings among private manufacturing firms in Kenya.
Moderating Effect of Government Regulations on Internal Control System and Fraud Prevention. A Case Banking Sector in Kenya
(2020) Nyakarimi, Samuel N.; Kariuki, Samuel N.; Kariuki, Peter
The main purpose of the study was to establish the moderating effect of government regulations on the relationship between internal control system and fraud prevention in baking sector. Structured questionnaire was used as tool for data collection. The study was based on all banks registered and operating in Kenya and the questionnaires were meant for branch managers, operations mangers and cash managers in head offices of all banks. One hundred and seventeen questionnaires were distributed and officers from 33 banks out 39 banks returned fully filled questionnaires. The questionnaires were analyzed using Structural equation Model (SEM). The findings indicated that the government regulations have significant moderating effect of control environment and risk assessment. However, there was insignificant moderating effect on control activities, communication and monitoring of activities. The study suggested that further studies and analysis should be undertaken to establish those legislations and regulations that should be enhanced, abolished and also establish need of new laws to enhance the functions of internal control system.
Organizational Contingencies Influencing the Adoption of Strategic Management Accounting Practices among Manufacturing Firms in Kenya
(2016-04) Kariuki, Samuel N.; Kamau, Charles G.
The study sought to contend with the dearth of studies in adoption of Strategic Management Accounting (SMA) practices in manufacturing firms in Kenya with the view of filling this gap. The overall objective of the study was to investigate the organizational contingencies influencing the adoption of SMA practices among manufacturing firms in Kenya. Accordingly, the findings of the study contribute to the flourishing literature on adoption of SMA practices. This study is anchored in the framework of contingency theory to identify three contingent variables possibly displaying association with adoption of SMA. The study adopted a survey research design. The study findings indicate that the intensity of industry competition and the use of advanced manufacturing technology significantly influence the adoption of SMA among manufacturing firms in Kenya. However, the study does not find evidence to support hypothesis that life cycle stage of the firm significantly influences the adoption of SMA among manufacturing firms in Kenya. The main limitation of this study is that it focused only on three contingency variables. Future studies should explore the influence of other contingency factors on the use of SMA practices in developing countries.
Organizational Contingencies Influencing the Adoption of Strategic Management Accounting Practices among Manufacturing Firms in Kenya
(2016-04) Kariuki, Samuel N.; Kamau, Charles Guandaru
The study sought to contend with the dearth of studies in adoption of Strategic Management Accounting (SMA) practices in manufacturing firms in Kenya with the view of filling this gap. The overall objective of the study was to investigate the organizational contingencies influencing the adoption of SMA practices among manufacturing firms in Kenya. Accordingly, the findings of the study contribute to the flourishing literature on adoption of SMA practices. This study is anchored in the framework of contingency theory to identify three contingent variables possibly displaying association with adoption of SMA. The study adopted a survey research design. The study findings indicate that the intensity of industry competition and the use of advanced manufacturing technology significantly influence the adoption of SMA among manufacturing firms in Kenya. However, the study does not find evidence to support hypothesis that life cycle stage of the firm significantly influences the adoption of SMA among manufacturing firms in Kenya. The main limitation of this study is that it focused only on three contingency variables. Future studies should explore the influence of other contingency factors on the use of SMA practices in developing countries.
Product innovations and financial performance of savings and credit co-operatives societies in Kirinyaga County,
(2017-05) Ngure, Francis Kimani; Maina, Kimani E.; Kariuki, Samuel N.
Product innovations are crucial to sustain organizations’ financial performance and raise their competitive strengths. SACCOS are the main drivers of economic and social development in rural areas of developing countries. In Kenya 81% of the population rely on the SACCOs to access financial services. However the use of SACCOs by Kenyans as a financial service provider has been declining. The SACCOs are faced with challenges of survival due to decline of members. The decline is attributed to the competition from banks which have embraced financial innovations. The study therefore investigated the effect of product innovations on financial performance of SACCOs in Kenya. The study adopted cross sectional descriptive survey research design. The target population was 60 SACCOs registered by SASRA to operate in Kirinyaga County. Stratified simple random sampling technique was used to obtain the sample size of fifty two SACCOs for the study. Primary data was collected using self-administered questionnaires while secondary data was obtained from audited financial statements. Primary and secondary data was analyzed using SPSS. The findings of the study revealed that product innovations were positively correlated to financial performance. The study will be of great importance to Policy maker in developing SACCO’s financial innovations regulatory framework. SACCO Managers will be able to adopt the product innovations that will improve financial performance of the SACCOs and their competitiveness. The study will further enlighten researchers with relevant information regarding product innovations. The study recommends that SACCOs should embrace product innovations in order to improve their financial performance. SACCOs should therefore introduce new deposit accounts in order to increase the amount of deposits. The SACCOs should also introduce credit cards and debit cards in order to increase their revenue. Similarly, the SACCOs should introduce electronic fund transfer since they have a positive effect of increasing commission fee based income
Risk Assessment and Fraud Prevention in Banking Sector
(2020) Nyakarimi, Samuel N.; Kariuki, Samuel N.; Kariuki, Peter
The objective of the study was to assess the effect of risk assessment on fraud prevention in banking industry in Kenya. The study involved all banks in Kenya. Descriptive and correlational research designs were used in this study. Factor analysis was undertaken to reduce the factors and remain with factors that had higher loading which was determined through the use of Eigen values. Correlation analysis was applied to determine the strength and direction of relationship between variables and regression analysis based on structural equation modelling (SEM) was used to test the hypothesis. The descriptive analysis showed that the respondents strongly agreed that the parameters put in place are capable of preventing fraud in banks. The hypothesis testing showed that risk assessment has significant effect on fraud prevention in banking industry in Kenya. From the results of tests, it was concluded that the risk assessment mechanisms put in place to assess the risks have significant effect in fraud prevention and as such they should be enhanced to completely prevent fraud in banking sector. Keywords: Risk assessment; Banking sector; Fraud prevention; Kenya.
Staff Profile - Dr. Samuel Nduati Kariuki
(2016-09) Kariuki, Samuel N.
Holds a Ph.D. in Business Administration (Finance option) from Jomo Kenyatta University of Agriculture and Technology, a Master of Business Administration (MBA- Finance option), Bachelor of Business Management (Banking & Finance Option), Bachelor of Technology, Post Graduate Diploma in Education, and Certified Public Accountant (CPA- Finalist). Previously worked as a Trainer and Productivity Consultant at Productivity Centre of Kenya (PCK). Has received training on Kaizen and Toyota Production System (TPS). Additionally, Samuel has a strong passion for research and imparting knowledge through training and lecturing. Possessing splendid presentation skills means that he is able to deliver information to audiences in a manner so that it is well received and informative.

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