The Mediating Role of Staff Competency: Examining Influence of Adoption of International Public Sector Accounting Standards (IPSAS) On Financial Reporting Quality in Kenyan County Governments

Abstract

This paper takes a closer look at how adopting International Public Sector Accounting Standards (IPSAS) impacts the quality of financial reporting among Kenyan county governments, with a particular focus on the role of staff competency as a mediator. It breaks down IPSAS into key components like accrual-based reporting, asset recognition, and financial disclosures, evaluating how each one affects reporting quality while considering staff competency as a moderating factor. The research is grounded in three main theories: agency theory, human capital theory, and institutional theory. By conducting a cross-sectional descriptive survey involving 352 respondents from 47 counties, data was gathered through structured questionnaires and analyzed using both descriptive and inferential statistics. The findings reveal that adopting IPSAS significantly boosts financial reporting quality, with accrual-based reporting showing the most substantial effect. Additionally, staff competency positively influences this relationship, highlighting the importance of having skilled personnel to fully leverage the benefits of IPSAS. The study wraps up by emphasizing that a comprehensive approach that combines standards, systems, and human capacity is essential for achieving sustainable improvements in public financial management.