Abstract: Small and Micro Enterprises (SMEs) play an important economic role in many countries. In Kenya, for example the SME sector contributed over 50% of new jobs created in 2005. Despite the big role SMEs play in the economy past statistics indicate that three out of five businesses fail within the first few months of operation (Kenya National Bureau of Statistics, 2007). Causes to the failure include limited market access, limited access to information, finances and technology and unfavorable policy and regulatory environment among others (ROK, 2005). The Council of the Institute of Certified Public Accountants of Kenya (ICPAK) and the Council of the National Board of Accountants and Auditors of Tanzania approved the use of IFRS for SMEs in 2009 yet majority of SMEs in Kenya have not implemented IFRS for SMEs. The study sought to carry out an investigation on the factors affecting the implementation of IFRS for SMEs in Kenya. Implementation of IFRS for SMEs is very crucial since SMEs contribute greatly to the economic development of a country. The research was carried out at Thika town Kenya since the town is an industrialized. A sample of 135 finance managers was done since they were directly and indirectly involved in the running of business of the firms. A questionnaire and interview guide were used to collect the data. A response rate of 89% was obtained. The study revealed that there is a positive relationship between the implementation of IFRS for SMEs and education and training skills of finance managers, availability of finance and awareness of IFRS for SMEs of magnitude0.217, 0.064 and 0.202 respectively. The positive relationship indicates that there is a correlation between the factors and the implementation of IFRS for SMEs in Kenya. This infers that education of finance managers has the highest effect on the implementation of IFRS for SMEs, followed by availability of finance and then awareness of IFRS for SMEs. The study found out that education and training affected the implementation of IFRS for SMEs and that majority of the respondents had not attended any form of training on accounting it therefore recommends that training policies should be introduced to the SMEs finance managers.
Keywords: implementation of IFRS for SMEs, Education of finance managers, availability of finance and awareness of IFRS for SMEs.
Title: Factors Affecting the Implementation of International Financial Reporting Standards for Small and Medium Enterprises in Kenya: A Case Study of Small and Medium Enterprises in Thika Town
Author: CHRISTOPHER NJOROGE CHEGE, DR WILLY MUTURI
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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