An empirical analysis of the characteristics of savings and credit cooperatives participating in the reporting excellence awards in Kenya

Abstract

Purpose

In Kenya, an award for reporting excellence is presented annually to the entities in the public and private sector. The purpose of this paper is to examine the characteristics of savings and credit cooperatives (SACCOs) that apply for the annual reporting excellence award in Kenya.

Design/methodology/approach

The study employs correlation and probit regression analyses to establish the factors which explain the decision by SACCOs to participate in the Financial Reporting (FIRE) excellence award. The study utilizes data consisting of 1,272 firm-year observations for 212 SACCOs, over the period 2008-2013.

Findings

Consistent with institutional and legitimacy theories, the results demonstrate that structural and governance variables are significant and positively associated with the decision to participate in the annual FIRE awards by SACCOs in Kenya. Similarly, larger SACCOs and those that have adopted best cooperative governance practices are more likely to participate in the annual FIRE awards. The results also reveal that SACCOs audited by the Big 4 audit firms are more likely to participate in the annual FIRE awards.

Research limitations/implications

The study focuses on the factors explaining the decision to participate in the annual reporting excellence awards by organizations in a specific sector. Further studies can adopt a multi-sectoral approach to investigate the same phenomenon.

Practical implications

The findings highlight the importance of cooperative governance and resources in explaining why SACCOs choose to participate in the FIRE awards.

Originality/value

The study adds onto the dearth of literature on the aspect under focus. Globally, very few studies have examined the drivers of the decision to participate in reporting excellence awards by organizations.

Citation

Mathuva, D.M. (2018), "An empirical analysis of the characteristics of savings and credit cooperatives participating in the reporting excellence awards in Kenya", Journal of Accounting in Emerging Economies, Vol. 8 No. 2, pp. 223-243. https://doi.org/10.1108/JAEE-03-2016-0023