This archive report was first published on 8 July 2019.
Kenya's private sector is often cited as a model for transparent business practices, with a strong emphasis on financial reporting and corporate governance.
However, public entities in Kenya have a different story to tell. In the United States, private companies are not required to disclose financial information to the public, a stark contrast to public entities which have to publicly file quarterly financial statements.
Established 18 years ago, the Financial Reporting (FiRe) Awards aim to promote integrated reporting through enhancing accountability, transparency, and integrity in compliance with appropriate financial reporting frameworks and disclosures on governance, social, and environmental reporting.
The promoters of the Award are the Public Sector Accounting Standards Board (PSASB), Capital Markets Authority (CMA), Nairobi Securities Exchange (NSE), and the Institute of Certified Public Accountants of Kenya (ICPAK).
With over 600 public entities expected to participate in this year's FiRe, the importance of sound financial reporting for public entities cannot be overstated. As President Uhuru Kenyatta directed the National Treasury to clear all pending bills by suppliers to the national and county governments, it emerged that a significant amount of the bills was fictitious, as revealed by the Auditor-General.
President Uhuru Kenyatta's directive to clear pending bills by suppliers to the national and county governments, as stated in his Madaraka Day speech, highlights the need for sound financial reporting mechanisms. Without these mechanisms, even the implementation of the grand 'Big Four Agenda' and its eventual benefits will remain a mirage.
Well-prepared financial statements provide information that the public use to evaluate progress and fiscal performance, making it an effective monitoring tool for implementation of activities, programmes, and projects undertaken towards attainment of a bigger development goal.
By embracing open financial reporting and sticking to international best practices, public sector entities can achieve the 'Big Four' goals, which include enhanced accountability, transparency, and integrity in compliance with International Financial Reporting Standards (IFRS) and other disclosures on governance, social, and environmental reporting.
— Mr Mwangi is the principal corporate communications officer, Public Sector Accounting Standards Board (PSASB).
