SMEs urged to adopt globally accepted financial reporting

Small and Medium Enterprises should adopt international standards in their financial reporting to attract and maintain investors.

Capital Markets Authority Acting CEO, Paul Muthaura made the appeal on Thursday urging SMEs who are yet to adapt the internationally accepted financial reporting standards to do so especially with the forthcoming SME listing at NSE.

 “We encourage more and more companies to bring themselves forth so that they can get used to the kind of transparency and details required in financial reporting… it is incumbent for any company that is willing to tap the market as effectively as possible to ensure that the financial reporting is of the highest quality so that they can attract the largest scope of investment,” said Mr  Muthaura.

Mr Muthaura was speaking during the launch of this year’s Financial Reporting   (Fire) awards, which have attracted 93 entries, the highest number since their inception in 2002.

Themed ‘Promoting corporate excellence in East Africa,’ 87 per cent of the entrants are from Kenya, 7 percent from Rwanda with Uganda and Tanzania accounting for 3 per cent each.

The entrants comprise of 26 institutions from the banking sector, 19 from the Industrial, allied and services sector, 13 from the Insurance sector, two local authorities, 16 SACCOs, 10 non-profit entities and seven SMEs.

 Nairobi Securities Exchange CEO Peter Mwangi who launched the awards on Thursday in Nairobi called upon companies to adopt internationally accepted standards in financial reporting to ensure investor confidence and satisfy expectations from other stakeholders.

Institute of Certified Public Accountants of Kenya (ICPAK)CEO, Caroline Kigen said the FiRe award seeks to recognize excellence in financial reporting among corporates in the East Africa and targets to promote and institutionalize transparency, integrity and accountability in the corporate reporting process.

“Financial reporting is no longer about the bottom line but corporates should also report about their corporate governance and corporate social responsibility to attract investors and satisfy their clients,” said Ms Kigen.

The FiRe awards, promoted jointly by the NSE, ICPAK and CMA, have attracted participation of over 800 companies since their inception in 2002.

The awards ceremony and gala dinner will be held at Nairobi’s Safari Park hotel on October 26 and will be preceded by a one-day conference on October 25 at the same venue.