EFFECT OF ENFORCEMENT CAPACITY OF EXTERNAL AUDIT RECOMMENDATIONS ON FINANCIAL PERFORMANCE OF COUNTY GOVERNMENT OF NAKURU, KENYA

Abstract

The expectation after an audit is that the audit client will address the concerns raised by the external auditor. In many instances this is not so due to reasons beyond the control of the audit client due to luck of capacity. This study sought to examine the effect of enforcement capacity of external audit recommendations on financial performance of county government of Nakuru, Kenya. Data was collected using structured questionnaires. The hypothesis stated that there is no statistically significant influence of enforcement capacity of external audit recommendations on financial performance of County Government of Nakuru, Kenya. This study employed a multiple study design. Correlational, causal and cross sectional study design were used. The proposed hypothesis that enforcement capacity of external audit recommendations have no statistically significant influence on financial performance of County Government of Nakuru was rejected on the basis that -statistical value of (4.853) was greater than the critical value and that the p-value was less than 0.05. It was therefore concluded that there is statistically significant influence of enforcement capacity of external audit recommendations on financial performance of County Government of Nakuru, Kenya. It was further concluded that the independent and dependent variables of this study are functionally linearly related.