Public, Private Sector Enrolment in FiRe Award Increases by 133%

The total number of entities that enrolled in this year’s Financial Reporting (FiRc) Award has increased by 133 percent to about 844 from 362 recorded in 2021 or both public and private sector entities.

The coveted FiRe Award is organized by five promoters who include the Public Sector Accounting Standards Board (PSASB), the Institute of Certified Public Accountants of Kenya (ICPAK’), the Nairobi Securities Exchange (NSE), the Capital Markets Authority (CMA) and the Retirement Benefits Authority) (RBA).

The increase in the number of entities participating in the Award indicates a significant uptake of financial reporting standards. That have led to improved transparency and accountability in the use of both public and private resources. Also, the growth in numbers has seen an improvement in financial reporting trends including the adoption of new accounting standards and implementation of environmental, social and governance (ESG) reporting. This lays the foundation for the country to prepare for the adoption of new standards on sustainability disclosures for both private and private sector entities issued by The International Sustainability Standards Board (TSSB) and International Public Sector Accounting Standards Board (IPSASB) respectively.

Speaking in Nairobi during the launch of the 20′” edition of the Award, the Chairman of the FiRe Awll’li, who is also the Chief Executive Officer of NSE, Mr. Geoffrey Odundo said the FiRe Award promotes financial reporting excellence, fosters sound corporate governance practices, and enhances corporate investment and environmental reporting for financial transparency and accountability in public and private sectors.

“The FiRe Award is critical in promoting and enhancing the adoption of International Financial Reporting Standards (TFRS) by entities in the country thus enhancing efficient communication of financial information both locally and internationally,”Mr.Odundo said.

ICPAK Chief Executive Officer, FCPA Edwin Makori added that

“The emerging financial reporting practices highlight not only financial information but also non7financial indicators in decision making. Incorporating nonfinancial data provides a more holistic view of the organization, and factors that can impact business operations than financial data can deliver on its own. Accountants therefore, agents of promoting excellence in financial reporting, have the responsibility to ensure that financial reports are prepared within the prescribed format and standards.”

The Chief Executive Officer of PSASB, FCPA Fredrick Riaga, said that there is an increasing demand in the country by the users of financial statements to link performance-related outputs and outcomes to financial information.

“User of standards want to understand the impact of the government’s decisions on the lives of current and future generations. Linkages between financial and non-financial information, including sustainable and Performance reporting is a crucial step step towards giving meaningful information to the use of the annual reports, and this is what we are promoting in this year’s FiRe Award,” Mr. Riaga said.

The FiRe Award is the culmination of the assessment exercise conducted in November 2022 after reporting entities submitted their financial reports for evaluation. Public and private sector entities submitted their entries in October 2022 for review by a panel of experts ahead of the Award.

During the Award, the best reporting entities were recognized and awarded for embracing best practices. This year’s Awards ceremony, themed Promoting Excellence in Financial Reporting through Integrating Financial and Non-Financial Information, is an appreciation of the critical importance non-financial information plays in providing a wholesome view of company’s performance and providing stakeholders with relevant information for decision-making.

Re-emphasizing the theme, Capital Markets Authority Chief Executive Officer, Mr. Wycldiffe Shamiah, said that

“Promoting excellence in financial reporting is fundamental in positioning Kenya as the preeminent financing and investment hub in the region.”

Out of the five promoters, RBA is the latest to join the Award in 2020 as a sponsor and was in 2021 admitted as a promoter.

“I would like to encourage Retirement Benefits Schemes to embrace best practice in reporting and demonstrate good governance. Participation of pension schemes in the Award will ‘improve financial reports and disclosures through formal feedback from the evaluation panel,” said R BA Chief Executive Officer Charles Machira.

This year’s award is taking place at a time of significant changes in financial reporting occasioned by changes in accounting standards, revisions in business models and reporting techniques from the challenges occasioned by the pandemic as well an increase in compliance to ESG and integrated reporting practices.