Abstract: Every economy sector places a premium on financial reporting quality, which draws heavily from other functions within an organization. Nairobi County's financial reporting, however, has reportedly been of low quality due to bad financial choices, ineffective operations, stakeholder mistrust, and lost opportunities. Therefore, this study ascertained how budgeting techniques affects quality of financial reporting of Nairobi City County Government in Kenya. It evaluated influences of incremental, activity based and zero-based budgeting on quality of financial reporting. Theory of budgeting, resource-based view and complexity theories served as theoretical reviews. The study's framework was a descriptive study design. Responses were drawn from one hundred and twenty-two (122) directors, internal auditors, finance officers and accountants of finance and economic planning department of Nairobi City County Government in Kenya. Stratified sampling approach was employed in selecting ninety-three (93) responders who made up sample size with Yamane sample size formula. This study employed a quantitative approach, utilizing structured questionnaires to gather primary data. To ensure the robustness of the findings, the research instruments underwent a rigorous assessment of reliability and validity. Findings unveiled that incremental budgeting insignificantly and positively affect the quality of financial reporting; activity-based budgeting provided a significant and positive effect on the quality of financial reporting while zero-based budgeting unveiled an insignificant positive effect on the quality of financial reporting in Nairobi City County. The study concludes organizations should prioritize the implementation of activity-based budgeting practices to enhance their financial reporting quality effectively. The survey recommends that Nairobi City County should actively promote the adoption of activity-based budgeting practices throughout the organization.
Keywords: Incremental Budgeting, Activity-Based Budgeting, Zero-Based Budgeting and Quality of Financial Reporting.
Title: BUDGETING TECHNIQUES AND QUALITY OF FINANCIAL REPORTING IN NAIROBI CITY COUNTY, KENYA
Author: Brian Tirimba Obonyo, Caroline Kimutai
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
Vol. 12, Issue 2, October 2024 - March 2025
Page No: 87-98
Research Publish Journals
Website: www.researchpublish.com
Published Date: 16-December-2024
