Role of Audit Committee in Promoting Accountability and Governance in Commercial Banks in Kenya

Authors

  • Justine Ratemo Mabati Bomet University College
  • Ratemo Felix Onserio Bomet University College
  • Nelly Chelangat Mutai Bomet University College
  • Philip Kiprotich Bii Bomet University College

Abstract

The general objective of this study was to determine the influence of audit committee on accountability practices of commercial banks in Nairobi Kenya. This study was anchored on the agency theory and supported by stewardship theory and stakeholder theory. The study used a descriptive cross-sectional survey design. The target population of the study was on 33 CBs located in Nairobi. The study specifically targeted Audit committee members, board members, managers, employees and auditors of the CBs. The research was conducted among five banks that are listed in the NSE and five banks that are not listed in the NSE all of which are licensed by the Central Bank of Kenya. The study used purposive sampling to sample 50 respondents whereby 5 respondents were selected from each bank. The study used primary data that was collected using a semi structured questionnaire. Descriptive statistics were used to analyze the data. Descriptive statistics displayed data in percentages, mean, frequencies and standard deviation. Results were presented through graphs and tables. The researcher also conducted correlation and regression analysis to determine the relationship between the study variables. The study concluded that audit committee have a positive effect on accountability practices of commercial banks in Nairobi Kenya. From the findings discussed above the study recommends the following; first, given that the audit committee have a positive effect on accountability practices of commercial banks in Nairobi Kenya it is recommended that the commercial banks should put more emphasis on the need to engage audit committees more on issues pertaining accountability practices and governance as this would result to better performance and overall growth. 

Key words: Audit Committee, Accountability practices, Governance, Commercial Banks

Author Biographies

Justine Ratemo Mabati, Bomet University College

Department of Accounting and Finance, School of Business and Entrepreneurship, Bomet University College (Constituent College of Moi University), Kenya

Ratemo Felix Onserio, Bomet University College

Department of Finance and Accounting, School of Business Entrepreneurship, Bomet University College (A Constituent College of Moi University), Kenya

Nelly Chelangat Mutai, Bomet University College

Lecturer, Department of Accounting and Finance, School of Business Entrepreneurship, Bomet University College (Constituent College of Moi University), Kenya

Philip Kiprotich Bii, Bomet University College

Senior Lecturer, Bomet University College (Constituent College of Moi University), Kenya

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Published

2020-11-21

How to Cite

Mabati, J. R., Onserio, R. F., Mutai, N. C., & Bii, P. K. (2020). Role of Audit Committee in Promoting Accountability and Governance in Commercial Banks in Kenya. Journal of Finance and Accounting, 4(4), 36–53. Retrieved from https://stratfordjournals.org/journals/index.php/journal-of-accounting/article/view/625

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