The Accountant-Jan-Feb 2017





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Tailored to provide relevant

information to intended users














reporting and


The Accountant’s ever Expanding

Reporting Responsibilities


FiRe AWARD 2016





pen off

The 2030 Agenda for

Sustainable Development



Brexit makes Britain a

bargain family holiday


Members of the Council


FCPA Fernandes Barasa

Vice Chairman

FCPA Julius Mwatu

Chief Executive

CPA Dr. Patrick Ngumi


Council Members

FCPA Pius Nduatih

FCPA Wycliffe Shamiah

CPA Geofrey Malombe

CPA Obare Nyaega

CPA Rose Mwaura

CPA Susan Oyatsi

Ms. Damaris Kimosop

CPA June Kivinda

CPA Samuel Okello

Head of Publication/Editor

Mbugua Njoroge

Editorial Consultant

Angela Mutiso

Marketing & Advertising

Ideation Marketing

Tel: +254 719 650 423

Staff Writer

Valerie Alusa

Design, Layout & Print

Colour Print

Publication and Circulation

ICPAK, CPA Centre, Thika Road

P.O. Box 59960-00200 City Square, Nairobi Kenya

Tel: +254 20 230 42 26/7

Mob: +254 721 469 796/169,

+254 727 531 006, +254 733 856 262

Fax: +254 20 856 22 06,


The Accountant is published every 2 months by the Institute of Certified Public Accountants of Kenya. Views expressed in the journal do not necessarily reflect those of the institute, authors

firms or employers. Reproduction of any article in this journal without permission is prohibited. The editor reserves the right to use, edit or shorten articles for accuracy, space and relevance.





Address: ICPAK, CPA Centre, Thika Road

P. O. Box 59963 - 00200 Nairobi Kenya



Dear Reader,

Happy New Year!

With effect from 31st December 2016,

ISA 701 requires the description of - Key

Audit Matters (KAM) to be tailored to the

facts and circumstances of the individual

audit engagements and the entity. This

will provide relevant and meaningful

information to intended users of the

auditor’s report. It is however expected

that KAM will vary in terms of the number

and selection of topics addressed and the

nature in which they may be described.

Unless law or regulation prescribes

otherwise, when KAM are communicated,

auditors are required to include certain

introductory language under the heading

Key Audit Matters in a separate section

of the auditor’s report. Our cover story

provides in-depth information on this.

A derivative security is generally

referred to as a financial contract whose

value is derived from the value of an

underlying asset or simply underlying.

There are a wide range of financial

assets that have been used as underlying,

including equities or equity index, fixedincome

instruments, foreign currencies,

commodities, credit events and even

other derivative securities. Depending on

the types of underlying, the values of the

derivative contracts can be derived from

the corresponding equity prices, interest

rates, exchange rates, commodity prices

and the probabilities of certain credit

events. Find these facts in the economy

segment where we discuss the role of

commodities and derivatives markets on

Kenya’s economic growth.

Currently several NSE listed firms

are looking for a strategic

investor or issuing right issues

to raise the working capital

level. A positive cash flow from

operations implies that a firm

was able to generate enough

cash from continuing operations

without the need for additional

funds and shall give high returns to the

shareholder. Some firms created this

through dividends payment freezing.

A negative cash flow from operations

indicates that additional cash inflows

were required for day-to-day operations

of the firm/s. Find this report in Finance

and Investment. In another article under

this segment the author says that when

informing to an audience that they can

have profits but no money in the bank

or incur losses and have money in the

bank, the participants are astonished.

Then on pointing out to a new venture

business owner that profits do not equate

to salary, they are mystified. Read it; it is a

captivating story.

In Public Policy, we discuss

strengthening the Office of the Auditor

General. Significant attention is being

given to security apparatus of the country

(in the past). This is done in order to

secure our borders and maintain law and

order internally - including shutting out

oversight agencies from policing them;

The National Assembly is not spared,

ostensibly due to confidentiality. Under

the 2010 constitution, the Office of the

Auditor General has been mandated to

audit all public institutions. In order to

discharge this role in an effective way,

sufficient funds should be allocated to

protect public interest.

Any organization needs good

management for long-term success and

efficient operation. Energy management

is no different. However, the management

of energy is often neglected, although

there is considerable potential to save

energy and reduce costs. At the same

time, there is increasing pressure from

rising energy prices, climate change

legislation and the need to be seen

to be environmentally responsible

by customers and stakeholders.

Saving energy makes business

sense, and having a structured,

co-ordinated and integrated

approach maximizes these

benefits. However, without good energy

management, cost-effective opportunities

can be easily overlooked. We reveal more

in the environment section.

It is said that the longest journey

in the world begins with a single step.

The Financial Reporting (FiRe) Award

was launched in Kenya in 2002 and is

today believed to be the most prestigious

and coveted award in East Africa for

Financial Reporting. The promoters of

the FiRe Award were delighted to mark

the 15th Anniversary of the Award

whose 2016 theme was; Accountable

governance for excellence and reliability

in financial reporting in East Africa. We

have a comprehensive analysis of the

latest edition of this event. Barclays Bank

of Kenya was declared overall winner.

Additionally, Barclays won in the banking,

listed, governance and in the International

Financial Reporting Standards (IFRS)

categories. It is a delight to win the

FiRe Award whose value and popularity

continues to be felt beyond its borders.

In the health segment, we discuss

allergies. As an allergy sufferer you should

take control over the food you eat. Either

make a list or track of the foods you are

allergic to and ensure you exclude them

from your diet. Consume foods that you

have no trouble with and let them be as

natural as possible. As often as possible,

cook your own food and when you go

to restaurants, make certain that the

ingredients included in the food you are

going to eat, agree with your system.

Enjoy these wonderful articles plus all your

regular features and have a Blessed and

Prosperous New Year!

Mbugua Njoroge



Financial reporting and assurance




By FCPA Jim McFie, a Fellow of the Institute of Certified Public Accountants of Kenya

The fourteenth session of the

United Nations Conference

on Trade and Development

(UNCTAD) took place in

Nairobi from Sunday 17th

July to Friday 22nd July this year. On

Thursday 21st July, there was a discussion

on the International Standards on

Accounting and Reporting (ISAR) “Highlevel

Policy Dialogue on Sustainability

Reporting” under the theme entitled

“Building productive capacity to transform


The UNCTAD secretariat pointed

out that in the post-2015 era, resource

allocation decisions need to be made with

a new mind-set that puts the Sustainable

Development Goals (SDGs) at the centre.

This will have implications for enterprises

and their reporting requirements and

practices. In producing the goods and

services that the global community

consumes, enterprises utilize human,

natural and financial resources that

need to be recognized, measured and

reported on, considering the targets and

challenges of the SDG agenda. Policy

makers, regulators, enterprises, financiers,

and other stakeholders need to develop

and agree on ways to enhance the role

of accounting and reporting in assessing

the contribution of the private sector

towards attaining the SDGs. The session

will facilitate an exchange of views on

ways and means to enhance the role of

corporate reporting as a tool to assess

the private sector’s contribution to the

SDGs. It will also contribute to gaining

insights on main trends and challenges

in the area of sustainability reporting, and

strengthen institutional links with key

stakeholders to facilitate progress towards

the harmonization of accounting and

sustainability reporting requirements.

The discussion addressed the following

issues: (a) Enhancing corporate disclosure

and facilitating comparable and verifiable

corporate reporting on SDG performance;

(b) Promoting behavioural change at the

enterprise level to support the attainment

of the SDGs; and (c) Supporting SDGrelated

investment decision making

with reliable and comparable corporate


But some international accounting

bodies, and multinationals, are also

addressing an even more important topic:

the question of human rights. Since

2008, when the UN Human Rights

Council unanimously endorsed the UN

Protect, Respect and Remedy (PRR)

Framework, it has been globally accepted

that businesses have a responsibility to

respect internationally recognised human

rights. The human rights in question

address social, economic, cultural, civil and

political concerns. They are expressed in

the International Bill of Human Rights

and the Declaration on Fundamental

Principles and Rights at Work of the

International Labour Organization (ILO).

Divided into three pillars, the PRR

Framework sets out the complementary

roles of the private and public sectors

regarding business and human rights:

Pillar 1: States have a duty to protect,

respect and promote human rights;

Pillar 2: Companies have a responsibility

to respect human rights; and

Pillar 3: Victims of business-related harm

should have access to a remedy

In establishing the ‘corporate

responsibility to respect human rights’,

Pillar 2 describes a fundamental

responsibility of all enterprises irrespective

of their size, purpose of business or

where they operate. Importantly, this

responsibility exists irrespective of a

government’s ability to protect, respect and

support citizens’ rights (Pillar 1).

The UN PRR Framework was enhanced

in 2011 when the UN Human Rights

Council unanimously agreed the Guiding

Principles on Business and Human Rights

(henceforth the Guiding Principles). They

detail how the UN Framework should be

interpreted and provide top-level guidance

on implementation.

Today, they are the de facto standard for

what constitutes good corporate behaviour.

Many different types of organisations

around the world, including large and

small enterprises representing diverse

industry sectors, accept, endorse and use

them in their day-to-day activities.

The PRR Framework and Guiding

Principles mark a significant moment in

history. For the first time, it is globally


Financial reporting and assurance

accepted that companies should consider

and proactively assess the human rights

impacts associated with their business

actions, activities and relationships. Where

relevant, they should address how they

impact the lives of all their stakeholders,

irrespective of the national laws where they

operate. The expectation that organisations

must ‘know and show’ is central to both

the PRR Framework and the Guiding

Principles. Companies should be able to

demonstrate that they understand their

impact on the human rights of their

stakeholders. Both instruments outline a

practical framework of human rights due

diligence, which should dovetail with the

existing risk-management processes that

businesses operate.

A human rights due diligence process is

intended to identify, prevent, mitigate and

account for how a company addresses its

adverse human rights impacts. It is based

on four key steps:

Step 1: Assessing actual and potential

human rights’ impacts;

Step 2: Integrating and acting on the


Step 3: Tracking responses; and

Step 4: Communicating about how

impacts are addressed.

While accountants may not be directly

focused on conducting a human rights

due-diligence process, they should still

be aware of what it is and its key role in

identifying the company’s human rights

risks and impacts.

Depending on the organisational structure,

the actual process may be undertaken by

sustainability/ corporate responsibility

teams, internal or external risk assessors or

specialist consultants. It should, however,

include input from people and functions

from across the business. Accountants

have a major role in considering how a

due diligence process can be adequately

resourced and managed to complement

existing risk-management systems. They

should also be involved in reviewing

findings and acting on any issues that

come to light.

Since 2011, there have been

increasing signs of diverse and influential

organisations around the world accepting

the Guiding Principles. These are

manifested in various ways, from adoption,

adaptation and implementation to their

use as the inspiration behind similar

initiatives to guide and influence the

actions of others. Evidence of action

indicates a move towards alignment and


To underscore ‘acceptance in practice’,

various organisations have taken steps

to either apply or adapt the Guiding

Principles according to their geographical,

sectoral or operational circumstances.

Accountants should have the skills

to develop risk reviews and corporate

processes, often working with multiple and

complex scenarios. With their professional

objectivity, they are well placed to

contribute to auditing and monitoring

policies and actions. They can also help in

the execution of strategic initiatives.

When it comes to safeguarding

reputation, such scrutiny is crucial.

Accountants should be able to map out

risk and opportunities, enabling them to

engage with the Guiding Principles and

identify both how their business might

impact human rights and how human

rights abuses might impact their business.

To do so, they must manage and draw

insights from corporate information and

metrics. Companies already engaging

in responsible business practices and

applying human rights frameworks will

gain significant advantage over those

failing to recognise their importance.

Companies also need to be confident in

explaining new priorities to a wide range

of stakeholders, supported by metrics that

clearly justify their decisions. Having a

clearer understanding of the implications

of human rights to the business will

also help financial decision making by

highlighting areas where investment is

required and enabling the evaluation of

procurement options and performance.

In recent years, non-financial factors

have become a required element of

corporate reporting. Finance professionals

have a key role in identifying, measuring

and analysing information that helps

explain how their business creates value,

both for itself and for wider society.

Accountants must recognise their

ethical and professional responsibilities,

both to the codes of their professional

body and particularly in relation to

delivering objectivity, independence and


Financial reporting and assurance

integrity. Using this lens, they are well

placed to review human rights impacts

and determine how prepared their

organisations are in terms of applying the

Guiding Principles.

Finance professionals play a crucial

role in supporting and enabling longterm

sustainable business success. They

have an equally important obligation to

ensure that their employers recognise the

relevance of human rights in business,

and that the success of their business

operations should not come at the expense

of the human rights of other people.

What should finance professionals do

specifically in relation to human rights?

Here is some guidance: One, enquire:

(a) Has the organisation made a public

commitment to respecting human rights?

This may take the form of a human

rights policy, or the inclusion of a human

rights statement within its policies on

sustainability, corporate responsibility or

other matters. It may also take the form

of a public endorsement of the Guiding


(b) Has the organisation signed up to a

responsible business standard or initiative

that includes a commitment to observing

human rights (such as the UN Global



have a

major role in

considering how

a due diligence

process can

be adequately

resourced and

managed to


existing riskmanagement


(c) Has the organisation signed up to

a sectoral initiative that has its own

responsible business standard including a

commitment to observing human rights?

(An example is the International Council

on Mining and Metals [ICMM].)

(d) Has the organisation’s HR function

developed systems to monitor issues such

as gender equality in the workplace or


(e) Is the procurement function aware of

any requirements for companies to respect

human rights? Or does it undertake

human rights due diligence?

(f ) How does the internal communications

function share messages and help embed

practices on the company’s position,

policies and processes relating to respect

for human rights?

Two, keep apprised of:

(a) Changes in the regulatory and legal

landscape concerning business and

human rights-related issues, such as

new legislation or the development of

National Action Plans on Business and

Human Rights by either host or home


(b) New and relevant developments in the

business and human rights field regarding

business reporting and performance,

such as the Corporate Human Rights


Financial Reporting and Assurance

Global Business

Initiative on Human

Rights (GBI) &

Clifford Chance,

Published on: 8

November 2015

Benchmark, the UN Guiding Principles

Reporting Framework and the Business

and Human Rights Assurance Framework.

Three, review:

(a) Any existing business strategy or

plan. Look for strategic priorities that

may adversely impact the human rights

of stakeholders. If these are not apparent,

make the case for considering how

the company will address and manage

its impact on the human rights of its

stakeholders as one of the business’s

ongoing strategic objectives.

(b) Research gathered from different teams

– look for any potential or actual human

rights risks to the company, or impacts on

stakeholders. Either of these may signal

a ‘red flag’ (a legal risk that will require

urgent action).

(c) Reports addressing the human rights

risks or impacts relating to relevant aspects

of the organisation’s business (such as a

project, operation or relationship). Upon

reviewing, determine how any impacts to

stakeholders and risks to the business that

you identify may affect the organisation’s

financial position.

(d) Contracts – look for opportunities

to insert the organisation’s human rights

responsibilities into contracts with thirdparty

suppliers, contractors and other

players. The wording should unequivocally

state the organisation’s commitment to

upholding respect for internationallyrecognised

human rights, elaborate on how

it conducts its business and convey to third

parties the need for them to adhere to the


(e) Insurance policies – seek any clauses

that have a crossover with human rights

impacts. If the wording is vague, consider

asking the insurer to include specific

clauses that safeguard the organisation’s

activities, actions or relationships with

respect to human rights. Alternatively,

ask for the wording to be strengthened to

ensure that your organisation is covered

regarding any violation of human rights.

Four, be alert to: Existing or legacy

human rights issues in any merger,

acquisition or divestiture prospect or

related partnership. If these are not

apparent, ensure that the due diligence

process includes consideration of existing

or legacy human rights issues.

Five, ensure:

(a) That new business/business

development teams thoroughly assess

the human rights situations in countries

where the company may be embarking on

a merger, acquisition or other investment.

(b) That, when placing orders, the buying

function considers the organisation’s

responsibility to respect the human rights

of its suppliers and associated contractors.

Six, consider:

(a) Adding human rights risks into existing

risk management processes.

(b) Adding human rights impacts by

stakeholder into existing risk registers.

(c) Developing key performance indicators

(KPIs) that will help the company measure

and track how it respects human rights and

does not adversely impact on the rights of


Seven, work with: Corporate reporting/


resource (HR) or other related business

functions to:

(a) Develop relevant KPIs that will help

the organisation determine how it respects

human rights in all of its activities;

(b) Establish and agree on the company’s

management-reporting systems

addressing non-financial issues such as

human rights;

(c) Develop and use appropriate nonfinancial

KPIs that relate to the relevant

business function’s interaction with human

rights issues; and

(d) Encourage training and development

to improve understanding and awareness of

relevant processes and policies, particularly

for the functions that are most affected.

Eight, allocate funding for:

(a) Human rights country-risk analysis –

this may be carried out internally if there

is appropriate in-house human rights

expertise, or externally via an expert

independent consultant or consultancy.

Free resources such as the Human Rights

and Business Country Guide are helpful

first guides to in-country human rights



Financial reporting and assurance

(b) Stakeholder engagement, which

may be needed to ascertain that a

project or operation is not adversely

impacting stakeholders’ rights. (Effective

stakeholder engagement requires specific

expertise and skills and ideally should be

carried out by an independent provider

to help engender trust in the process.)

(c) Human rights impact assessment

– assessing an organisation’s adverse

impacts on the human rights of its

stakeholders requires specialist expertise

and skills. Similar to stakeholder

engagement, the impact assessment

process would be more trusted if carried

out by a reputable, independent third

party, potentially working alongside

the organisation. The Guide to

Human Rights Impact Assessment

and Management11 provides a good

overview of an assessment process.

(d) Remediation and reparation – it

is advisable to ring-fence funds for

any corrective actions that may need

to be addressed and for situations that

could potentially trigger a reparation or

compensation claim.

(e) Learning and development – the

business may benefit from engaging with

organisations that consider and address

business and human rights issues and

offer peer-to-peer learning opportunities

(eg. the Global Business Initiative on

Human Rights). Some organisations

offer sector-specific support on human

rights (e.g. ICMM), while others, such

as the 80+ Local Networks of the UN

Global Compact, convene based on


(f ) Training – ensuring that relevant

employees understand that concern

for human rights is an important

commitment of the company. Training

on business and human rights is

becoming more sophisticated, ranging

from online courses to bespoke sessions

tailored to an organisation’s needs. The

organisation needs to decide what type

of training is needed (awareness-raising

or capacity-building) and who should be

trained (all employees or specific teams).

Nine, challenge:

(a) Information and data compiled by

business functions such as the corporate

social responsibility/ sustainability

teams. Ensure that this effectively

identifies the organisation’s human

rights risks and impacts associated with

its business.

In 2015, Unilever

became globally

recognised as the

first company to

publish a standalone

human rights

report based on

the UN Guiding

Principles Reporting

Framework. The

company’s longerterm

aim is for

every employee

and supplier to

have an appropriate

understanding of the

Guiding Principles.

(b) Action plans drafted by the corporate

social responsibility/sustainability and

other relevant teams. Discuss solutions

with them to ensure that the agreed

approaches are cost-effective and meet the

needs of the affected stakeholders.

Finally, revisit: All human rightsrelated

policies, processes and systems that

have been developed and implemented;

ascertain their effectiveness and make all

appropriate adjustments

In 2015, Unilever became globally

recognised as the first company to publish

a stand-alone human rights report based

on the UN Guiding Principles Reporting

Framework. The company’s longer-term

aim is for every employee and supplier to

have an appropriate understanding of the

Guiding Principles. However, with 172,000

employees, 76,000 suppliers and sales in

more than 190 countries, this ambition

presents a number of challenges. The report

highlights Unilever’s efforts to embed and

promote human rights practices in the

business. It identified the salient issues

faced by the company as discrimination, fair

wages, forced labour, freedom of association,

harassment, health and safety, land rights

and working hours. With potentially

millions of stakeholders in the organisation’s

value chain, Unilever operates an ecosystem

in which it can control some parts

and only influence others. It also recognises

the need for continuous improvement, with

transparency and accountability being the

critical drivers. And it understands that

identifying problems in the value chain,

then seeking feedback and sharing the

knowledge gained, helps it to address those

problems. Unilever identified issues of

harassment as the issue that was most often

reported internally in 2014, particularly

in the agricultural sector. In response, the

company launched three initiatives to

combat sexual harassment in the Kericho

tea plantation in Kenya. Community

outreach, safety talks and targeted training

exercises led to positive results and ongoing

progress will be publicly reported. While

Unilever understands the importance of

quantitative and qualitative data collection

and interpretation across multiple

geographies, it has found gaps in readily

available information. To bridge these gaps,

the company is involving cross-functional

teams, from procurement and finance to

investor relations and human resources

(HR), in assessing risk and identifying the

value proposition. By compiling this first

report, Unilever has committed itself to

building frameworks for improved data

collection, verification and analysis. This

will feed into how the company continues

to identify and remediate human rights


Accountants’ responsibilities are always

increasing: the profession needs persons

who are widely educated and who can

teach themselves a wide variety of skills: it

is unfortunate that accounting is way down

on the list of the most desired professions

for youngsters to enter; every accountant

in Kenya has to raise the quality of his or

her work so that the importance of the

profession is promoted.




By CPA Victor Kipkoech,

Key Audit Matters (KAM)

are those matters that in

an auditor’s professional

judgment were of most

significance during the audit

of financial statements of the period under

review. As from 31st December 2016, ISA

701 requires the description of KAM to

be tailored to the facts and circumstances

of the individual audit engagements and

the entity in order to provide relevant and

meaningful information to intended users

of the auditor’s report. It is expected that

KAM will vary in terms of the number

and selection of topics addressed and the

nature in which they may be described.

Contextual Information

Required to Be Included in the

Auditor’s Report in Relation

to KAM

Unless law or regulation prescribes

otherwise, when KAM are communicated,

auditors are required to include the

following introductory language under the

heading “Key Audit Matters” in a separate

section of the auditor’s report.

Key Audit Matters

Key audit matters are those matters that,

in our professional judgment, were of most

significance in our audit of the financial

statements of the current period. These

matters were addressed in the context

of our audit of the financial statements

as a whole, and in forming our opinion

thereon, and we do not provide a separate

opinion on these matters.

Although standardized in nature,

this language is intended to provide

an appropriate context for users of the

auditor’s report to understand the new

concept of KAM – in particular that the

communication of KAM:

• Is not intended to imply that the matter

has not been appropriately resolved by

the auditor in forming the opinion on the

financial statements.

• Is not intended to represent or imply

discrete opinions on separate elements of

the financial statements.

In addition, the Auditor’s

Responsibilities for the Audit of the

Financial Statements section of the

auditor’s report will include the following

description in relation to KAM.

From the matters communicated

with those charged with governance,

we determine those matters that were

of most significance in the audit of the

financial statements of the current period

and are therefore the key audit matters.

We describe these matters in our auditor’s

report unless law or regulation precludes

public disclosure about the matter or

when, in extremely rare circumstances,

we determine that a matter should not

be communicated in our report because

the adverse consequences of doing so

would reasonably be expected to outweigh

the public interest benefits of such


Determining KAM, Including

the Number of KAM for a

Particular Engagement

KAM should be specific to the entity

and the audit that was performed in

order to provide relevant and meaningful

information to users. Therefore, ISA 701

includes a judgment based decision making

framework to help auditors determine

which matters, from those communicated

with those charged with governance (ISA

260), are KAM. This decision making

framework was developed to focus

auditors on areas about which users have

expressed interest. In particular, areas of

the financial statements that involved the

most significant or complex judgments by

management and areas of auditor focus in

accordance with the risk-based approach

in the ISAs.

The number of KAM that will be

communicated in the auditor’s report may

be affected by the complexity of the entity’s

business and industry, and the facts and

circumstances of the audit engagement. It

is envisaged that there will be at least one

KAM for an audit of a listed entity.

Required Elements in the


The description of a KAM is always

required to include a reference to the

related disclosures, if any, in the financial

statements and address:

• Why the matter was considered to be

one of most significance in the audit and



KAM should be specific to the entity and

the audit that was performed in order to

provide relevant and meaningful information

to users. Therefore, ISA 701 includes a

judgment based decision making framework

to help auditors determine which matters,

from those communicated with those

charged with governance (ISA 260), are

KAM. This decision making framework was

developed to focus auditors on areas about

which users have expressed interest.

therefore determined to be a KAM.

• How the matter was addressed in the


The requirement in ISA 701 relating

to the description of a KAM is intended

to provide sufficient and balanced

explanation about the matter. However,

the level of detail in the description of

each KAM is a matter of professional

judgment, and may vary depending on

the specific facts and circumstances of the

particular engagement.

The International Audit and Assurance

Standard Board was of the view that this

flexibility is important to enable auditors

to be as entity specific and audit-specific

as possible in the description of a KAM, in

order to mitigate concerns from intended

users that communication of KAM could

quickly result in more standardized



The order of presentation of individual

matters within the KAM section of the

auditor’s report is a matter of professional

judgment. For example, such information

may be organized in order of relative

importance, based on the auditor’s

judgment, or may correspond to the

manner in which matters are disclosed in

the financial statements. The auditor is also

required to include subheadings for each

individual KAM to further differentiate

the matters.

The examples below represent extracts

of what may be included in a KAM

description and the level of detail that may

be included in the description of a KAM

in the auditor’s report.

a) Why the matter was determined to be


The description of a KAM in the auditor’s

report is intended to provide insight to

intended users as to why the matter was

determined to be a KAM (i.e., why it

was a matter of most significance in the

audit of the financial statements of the

current period). ISA 701 also provides

robust guidance to support the judgment

based decision making framework in

determining the relative significance of a

matter communicated with those charged

with governance and whether such a

matter is a KAM.

Entity-specific information included

in a KAM that relates to a matter

disclosed in the financial statements is

intended to be consistent with those

disclosures and should not result in the

auditor inappropriately providing original

information about the matter or the entity.

b) How the Matter Was Addressed in

the Audit

The description of a KAM in the auditor’s

report is also intended to describe how

the matter was addressed in the audit.

The amount of detail to be provided in

the auditor’s report to do so is a matter of

professional judgment. ISA 701 explains

that auditors may describe how a KAM

was addressed in the audit by describing

aspects of the auditor’s response or

approach that were most relevant to the

matter or specific to the assessed risk of

material misstatement, a brief overview of

procedures performed; an indication of the

outcome of the auditor’s procedures, or key

observations with respect to the matter, or

some combination of these elements.

If the auditor provides an indication of

the outcome of the auditor’s procedures in

the description of a KAM, care is needed

to avoid the auditor giving the impression

that the description is conveying a

separate opinion on an individual KAM

or that in any way may call into question

the auditor’s opinion on the financial

statements as a whole.

c) Reference to the Related

Disclosure(s) in the Financial


The auditor’s communication of KAM in

the auditor’s report is not intended to be a

substitute for the inclusion of appropriate

and relevant financial statement

disclosures, because management is

responsible for providing information

about the financial statements and the


The description of a KAM in the

auditor’s report will always refer to

any related disclosures in the financial

statements. Reference to any related

disclosures enables intended users to

further understand how management

has addressed the matter in preparing

the financial statements. In addition to

referring to related disclosure(s), the

auditor’s description of a KAM may

draw attention to key aspects of such

disclosures. Therefore, the extent of

disclosure by management about specific

aspects of a particular matter in the

financial statements may help the auditor

in describing how those specific aspects

were addressed in the audit such that

intended users can understand why the

matter is a KAM.





Emerging Business Risks

By CPA Charles Mwitari,

There has always existed the

ever-present possibility of an

adverse event affecting the

business performance. The

business managers have for a

long time focused on physical risks which

could destroy the business assets such as

fire or accidents.

Development of insurance industry

and products responded well to these

risks and can now cover most of the risks

associated with business disruptions. The

other traditional risk is the loss of revenue

through theft and frauds, mainly caused by

weaknesses in internal controls. This risk

was quickly addressed internally through

creation of internal audit departments.

The external auditors further gave their

assurance by confirming the Financial

Statements presented the true and fair

view or otherwise.

So why business failures while the

most obvious risks have already been

taken care of? The recent revelation of

billions of Kenya shilling losses at the

Premier Africa Airline, Kenya Airways

and Uchumi Supermarkets Ltd revealed

an emergence of new kinds of risks that

need to be proactively addressed. The

two, have significant shareholding by

the ‘taxpayers’ through the government

which has invested public funds in

them, they are significant to the country

as flagship brands hence attract a lot

of public sympathy when they are in

financial trouble and the government is

often obliged to dip into public coffers

to rescue them. An analysis of the main

causes of these business failures will help

bring out the new risks that need to be

managed. The two companies expanded

their business operations at a very fast rate

resulting into a case of putting the “Cat

before the Horse”. Today’s shareholder

is interested in returns in both dividends

and capital gains and not mere public

stunts in the name of business expansion.

Kenya Airways “Project Mawingu”

focused on acquiring bigger airplanes

worth billions of shillings with a view

of operating new routes in Africa, Asia

and Europe. Unfortunately the expected

business did not come through due to

various factors which though unforeseen

are not unlikely and should have been

factored in the business formulation stage.

A ‘what if ’ approach would have advised

a more cautious expansion. The Ebola

outbreak in parts of West Africa, security

threats due to increased terrorist attacks

and downturn in tourism resulted into

idle-capacity while the assets acquired

through debt arrangements continued

draining the limited resources. In

2014/2015 the Pride of Africa reported

Kshs.25.7 billion loss and went further to

report a half year loss of ksh.11.9 billion

in 2015/16. Uchumi Supermarkets

followed very much the same path by



The business stakeholders who include

shareholders, boards, industry regulators

including Capital Markets Authority,

Government Ministries, the National

Treasury, professional bodies including

ICPAK and the general public should be

watchful when the same “drivers “ start

becoming synonymous with the “vehicle”

and when they seek support to implement

capital intensive projects.

opening multiple branches in Kenya,

Uganda and Tanzania. It also reported a

loss of Kshs.3.4 billion in 2014/2015. In

both cases the management teams and

the respective boards were found to have

been in place for over a decade resulting

into complacency and ideology failure,

they were seeking a quick and long term

turn-around solution to the business.

They were found in bed with their equally

long serving auditors who dropped their

guard as the friendship blossomed. This is

the emerging business risk of incumbency

and complacency that needs to be dealt

with by re-invigorating and implementing

the corporate governance and ethics


The first six years of a new

management are usually coupled with a

brilliant new vision, rebranding a new

strategic plan and noticeable turnaround

in business fortunes. However, that where

it ends and what follows is stagnation

or downturn as the management rides

on their past success ignoring the need

for continuous innovation and creativity

and instead resorting to publicity seeking

opportunities often on redundant and

moribund projects. Having steered their

organization to success, the management

and boards realize that that they have

limited time left and the only way, is out.

This is when they start asking themselves

what can the organization do for me? They

start going against every rule of corporate

governance and ethics and most often

engage in business with the firm as a

priority supplier either directly or through

proxies resulting in conflict of interest.

To overcome this normal curve

denegation that, dictates the only way

after the first five year cycle is down is to

limit the term of the CEOs, the senior

management and the board to a maximum

term not exceeding six years (2 terms of 3

years each) Such a shift would result into

the new management picking at the apex

of performance and thus building onto

the successes of the previous management

instead of waiting to build the company

while it has degenerated into a ramshackle.

The auditors, advisors, consultants and

other business partners should be rotated

on a similar or shorter term in order to

safeguard competence and independence.

Business strategies that significantly

alter the business model and which have

huge capital should be implemented using

a phased approach and should never be a

‘deep end dive’. As they say Rome was

not built in a day, business success is a

journey rather than a knee-jerk reaction.

This allows the business to monitor and

evaluate results and come up with a midterm

report on whether to retreat or go

full hog with the strategy implementation

based on some visible results rather than

on unguided optimism.

The business stakeholders who include

shareholders, boards, industry regulators

including Capital Markets Authority,

Government Ministries, the National

Treasury , professional bodies including

ICPAK and the general public should be

watchful when the same “drivers “ start

becoming synonymous with the “vehicle”

and when they seek support to implement

capital intensive projects. This should

be a red light to conduct due diligence

and ask hard questions on the projects

viability and effect boardroom changes to

encourage innovation and creativity.

A stitch in time saves nine; better

late than never; prevention is better than

cure. These were indeed well thought out

sayings; that call for action now; this is

a call to stop incumbency and deep end

diving in the corporate sector and save

shareholders and the public the pain of


The writer is Financial Management

Practitioner and a member of the ICPAK

Finance and Strategy committee






By CPA Joseph Nyanchama,


story is told that one night

a man was relaxing with his

newspaper after a long day at

the office. His son who wanted

to play kept on pestering him.

He was fed up with his son’s disturbance

and ripped out a picture of the globe that

was in the paper and tore it into many tiny

pieces. He gave it to his son and told him

to put it back together hoping that this

would keep the little boy busy long enough

for him to finish reading the newspaper.

To his amazement his son returned after

only one minute with the globe perfectly

reassembled. When the startled father

asked how he was able to do it, the boy

smiled gently and replied that on the other

side of the globe there was a picture of a

person and he only put the person together

and the world was okay.

The moral of the story is that success

on the outside begins from within. That is,

it all starts with getting yourself together.

In a football match for example, the



team has to break after forty five minutes

for fifteen minutes and we call this break

“half time.” Here in the halftime, the coach

and the team members agree to be more

creative, more impactful, more meaningful,

and more adventurous and find more

learning from the opponent’s moves and

contribution than the first half. This is the

time to take stock, to look back on what was

accomplished, what worked and what didn’t

work. Plays that didn’t work can either be

adjusted or dropped for the second half;

new plays can be drawn up and inserted.

Many times a good second half can depend

on what is done during half time. In other

words it depends on how deep the team

members individually reflect. Abe Lincoln

said, “If I have eight hours to chop down

a tree, I would spend six hours sharpening

my axe”. From this analogy of a football

match, I realize that why most failures

are experienced in leadership is due to the

failure to rest, reflect and take stock on how

we are doing. If you cannot continually rest

and reflect, you cannot know when you

drifted from your purpose.

Each leader should know that we were

made on purpose for a purpose. Most

leaders say they want riches. What they

need I think is fulfillment of a purpose.

Happiness comes when we abandon

ourselves for a purpose. Don’t be a leader

who does not know where you are leading

your company to. Reflect all the time.

Remember that growth for the sake of

growth is the ideology of the cancer cells.

Accumulating riches which is ill gotten is

an aimless growth which is as dangerous

as cancer cells which grow only to kill.

Remember that without purpose the only

thing you can do is to get old. Gilbert

Arland said “When an archer misses the

mark, he turns and looks for the fault

within himself. Failure to hit the bull’s eye

is never the fault of the target.” To improve,

improve yourself.

I would say here that one of the critical

success factors which is key for one at

leadership, be it in business or politics and

is usually overlooked is relaxation and deep

reflection. As a leader you need to know

how to reflect and relax so that you can

replenish your energies for the struggles

facing you tomorrow. Lincoln went to

the theatre about a hundred times while

he was in Washington and although he

suffered from a certain melancholy, he had

a tremendous sense of humor and would

entertain people long into the night with

his stories .Franklin Roosevelt was the same

way, he had this certain hour every evening

during world war two when he just couldn’t

talk about the war. He needed to remain

free from thinking the bad things for a few

hours or he would play with his stamps.

This ability to recharge your batteries in the

midst of great stress and crisis is crucial for

successful leadership.

When you relax and reflect deeply you

start to experience extraordinary amount of

emotional intelligence. You are now able

to acknowledge your errors and learn from

your mistakes to a remarkable degree. You

realize that you are able to put past hurts

behind yourself and you never allow wounds

to fester. In fact you become aware of

hindsight bias. What you should have done

always seems clearer in retrospect than it

was at the time. As the Danish philosopher

Soren Kierkegaard put it “life can only be

understood backwards, but it must be lived

forward”. You cannot understand things

backwards until you start to reflect while

you are in a

relaxed mode.

Failing to

create time

for deep

reflection and

relaxation is

like saying

you are so

busy driving

that you don’t

have time to

stop at the

petrol station

and refuel

your car.


made many

of his most




while relaxing

in bed and



the laws of

gravity while


under an

apple tree.



upon the

laws of


while soaking

in a hot bath and Mozart composed one

of his most famous pieces over a game

of billiards. Elias Howe a Massuchettes

instrument maker was deep in sleep when

he had a bizarre dream. In it he was being

chased by a man carrying a long spear with

a small hole at the end of it .This served as

the inspiration for his invention that later

became known to the world as the sewing

machine. Even Jesus Christ fasted for forty

days and forty nights and after that he gave

one of the most outstanding sermons-the

sermon on the mountain.

As leaders you need to relax and reflect

deeply if you have to be effective. Even the

challenge we face as a nation of corruption,

it requires deep reflection if it has to be

overcome. All is not lost. A game is won

or lost in the second half. Take the time

you are reading this article as your halftime,

make appropriate adjustments and you will

win the game.





Theme: Corporate Governance in a Dynamic World

Date: 8th to 10th March, 2017

Venue: Sarova White Sands Beach Resort & SPA, Mombasa


The 2nd Leadership and Accountability

Forum is a continuation of the delightful

Inaugural Ladies Leadership and

Accountability Conference held in March

2016 at Sarova White Sands Beach

Resort & SPA, Mombasa. It builds on

the initial theme of having women as

architects and champions of leadership

and accountability in Kenya by focusing

on their role in corporate governance in

a changing and dynamic world. As the

gender agenda continues to take shape

in Kenya and across the world,

women are finding themselves

increasingly at the helm of

change. This conference

reinforces and prepares

them to take up leadership

challenges even as they

champion for accountability

in both corporate and

political spheres.

The conference

builds on the realization

that despite the fact that

women comprise a little

over half of Africa’s

growing population and

their contribution to

the region’s economy

is extensive; women

continue to form the

majority of the poor in


As the thirst for

qualified women to

take up leadership

positions in both corporate and political

spheres grows and the opportunities for

women participation increase, a number of

bottlenecks that constrain the development

of women leaders have to be overcome.

The socialization and stereotypes of female

roles in society, lack of opportunities for

women and inadequate organizational

support among other tailbacks need to be

explored and addressed if women are to




It has been rightfully observed that the

corporate world is a place of societal social

power, it is a place of conflicts of power, and

even conflicts between people. And whilst

most of these conflicts are regulated, more

or less effectively, by the good governance

standards, the quest for greater efficiency

and ‘feminisation’ of Boards is a significant

potential lever of change. Indeed, more

and more women have slowly been

brought into positions of power within

government, corporations, academic

institutions and other organizations. As

such, inquiries into the presence and

progress of women on boards especially on

their role in corporate accountability is of

critical importance.

A recent study by the African

Development Bank (AfDB 2015)

observed that Women hold 12.7% of

board directorships (364 out of 2,865) in

307 listed companies based in 12 African

countries. This is 4.6% lower than the 17.3%

women’s representation on the boards of



the 200 largest companies globally. Even

though Kenya had the highest percentage

of women board directors in Africa

at 19.8% as per the report, it has been

observed that the proportion of women

fall quickly up the corporate hierarchy.

Progress across African countries has been

patchy within and between countries with

minimal women’s presence on boards.

At a time when private sector growth

in the continent is reaching unprecedented

levels, efforts must be initiated to explore

how women are involved – all the way from

providing tertiary services to being at the

decision making tables. Statistics indicate

that even in the business world, the climb

to the top can be particularly steep for

women. A recent study on Fortune 500

companies revealed that in US alone, even

though women filled 52 percent of the

professional jobs in the United States, a

look at Fortune 500 board seats indicated

that women formed a paltry 16.9 percent

of the board seats. The statistics could be

worse in Kenya and in Africa in general.


The conference aims to

a) Foster Corporate leadership that

enhances accountability and societal values

by exploring the challenges, experiences,

visions and achievements that continue

to shape women leadership in the country

and in the region.

b) Explore the emerging trends in

business and entrepreneurship and present

opportunities to women. The dynamics

of technology and an ever changing

global market calls for; re-branding, reengineering

and perpetual re-orienting,

hence a total CONSOLIDATION of all

gains to suit the day.

c) Encourage and stir women leadership

and participation in governance and

accountability efforts towards revitalized

corporations and societal good.

Specifically, the participants will

• Be accorded opportunities for

networking with the diverse professionals

creating new friendships, partners and


• Learn: discuss new ideas and

opportunities during plenary sessions

featuring influential and successful women

in government and industry.

• Identify and unlock leadership

potential and skills

• Be re-energized for relevance,

effectiveness and efficiency in their

corporate and professional life.


The conference targets CEOs, Directors

and Women in Boards, Women Business

leaders and Entrepreneurs; top, senior

and middle lady managers in both private

and public sector organizations; National

and County Governments Ministries,

Departments and Agencies: mentors,

upcoming entrepreneurs, seasoned and

aspiring politicians, Academicians,

researchers and graduate students from

both public and private institutions, NGOs,

CSOs, and International Organizations

with a focus on gender empowerment,

entrepreneurship, leadership and



The following are the key conference


• Re-engineering Accountability

in Kenya: Women’s role in shaping

leadership and accountability in Kenya;

The Visionary Leader: Identifying and

Developing leadership potential

• Women and the Board Room dynamics

• Executive Coach and Mentorship

– Enhancing Excellence, Emotional

Intelligence and Personal Branding

• Feminization and Development -

Bursting the Myths on the gender agenda

• Women in ICT Entrepreneurship:

Leveraging Technological Innovation for


• Women Leadership in Kenya’s Political

Environment – Involvement and

Participation in the 2017 elections and


• Scaling up enterprises; Women

Leadership in Visioning and expanding

organizations and enterprises

What’s more: Networking and recreation

sessions, Touring of Sites, CSR and

Outdoor Activities


Physical Address: CPA Centre Ruaraka, Thika Rd, 11th Floor

Address: P.O. BOX 62914 00200 Nairobi

Tel: +254 720 016556, Email:, Website:

Follow us:

# womenleaders2017


Tweet: @AWAK_2016






By Ndirangu Ngunjiri,


derivative security is generally

referred to as a financial

contract whose value is

derived from the value of an

underlying asset or simply

underlying. There are a wide range of

financial assets that have been used as

underlying, including equities or equity

index, fixed-income instruments, foreign

currencies, commodities, credit events and

even other derivative securities. Depending

on the types of underlying, the values of

the derivative contracts can be derived

from the corresponding equity prices,

interest rates, exchange rates, commodity

prices and the probabilities of certain

credit events. There are four main types

of derivatives contracts: forwards; futures,

options and swaps.

Derivatives have a long history and

early trading can be traced back to Venice

in the 12th century. Credit derivative

deals at that period took the form of

loans to fund a ship expedition with some

insurance on the ship not returning. Later

in the 16th century, derivatives contracts

on commodities emerged. During that

time, the slow speed in communication

and high transportation costs presented

key problems for traders. Merchants thus

used derivatives contracts to allow farmers

to lock in the price of a standardized grade

of their produce at a later delivery date.

Kenya’s financial markets have reached

the level of sophistication from which

it can move to the next stage with the

introduction of derivative markets (both

financial and commodity derivatives).

Kenya can develop active agricultural and

minerals derivative products but, first,

Kenya needs to improve the spot markets

for agricultural products which would

improve prices for farmers and improve

food security. This will help potatoes

farmer in Molo to sell his produces at a

better price and will be able to determine

the selling price during planting. The

Nairobi Securities Exchange (NSE)

and Mombasa tea auction are ripe for

commodities market.

These instruments help economic agents

to improve their management of market

and credit risks. They also foster financial

innovation and market developments,

increasing the market resilience to shocks.

The main challenge to capital market

authority (CMA) will be to ensure that

derivatives transactions are being properly

traded and prudently supervised. This

entails designing regulations and rules that

aim to prevent the excessive risk-taking

of market participants while not slowing

the financial innovation aspect. And it

also calls for improved data quantity and

quality to enhance the understanding of

derivatives markets, if properly handled



derivatives can bring substantial economic


A number of fundamental changes in

global financial markets have contributed

to the strong growth in derivative markets

since the 1970s. First, the collapse of the

Bretton Woods system of fixed exchange

rates in 1971 increased the demand for

hedging against exchange rate risk. The

Chicago Mercantile Exchange allowed

trading in currency futures in the following

year. Second, the changing of its monetary

policy target instrument by the US

Federal Reserve (FED) promoted various

derivatives markets.

Derivatives allow users to meet the

demand for cost-effective protection

against risks associated with movements in

the prices of the underlying. In other words,

users of derivatives can hedge against

fluctuations in exchange and interest rates,

equity and commodity prices, as well as

credit worthiness. Specifically, derivative

transactions involve transferring those

risks from entities less willing or able to

manage them to those more willing or able

to do so.

Central clearing of derivatives

transactions and more robust

collateralization are important for

mitigating counterparty risk in OTC

markets. In addition, CMA and Nairobi

Securities Exchange can design new rules

to improve post-trade price transparency

and encourage the migration of trading

in some actively over the counter (OTC)

traded products to exchanges.

Some firms can use derivatives to obtain

better financing terms. For example, banks

will offer more favorable financing terms

to those firms that have reduced their

market risks through hedging activities

than to those without. Fund managers

can use derivatives to achieve specific asset

allocation of their portfolios. For example,

passive fund managers of specific indextracking

funds may need to use derivatives

to replicate exposures to some not so liquid

financial assets.

With Nairobi securities exchanges

becoming important sources of investment

Kenya can develop

active agricultural

and minerals

derivative products

but, first, Kenya

needs to improve

the spot markets for

agricultural products

which would improve

prices for farmers and

improve food security

capital for large corporations, The

Safaricom experience has revived debate

on whether exchanges are capable of

promoting economic growth. Suspicions

over its weaknesses are not without basis.

The absence of laws regulating trading

in derivatives was largely blamed for

the 2007 global financial crisis. If such

practices could happen on the world’s

biggest exchanges, how can Kenyan

fragile economies withstand the whims of


The small size of Nairobi securities

market and the absence of liquidity

are often cited by foreign investors as

the major impediments to investing

in Kenya. East Africa Community has

recommended merging its security market

into regional exchanges as one solution.

“A regional exchange should mean more

liquidity — the lifeblood of exchanges —

by making stocks available to a wider range

of investors,

Derivatives, if properly handled,

should help improve the resilience of the

system and bring economic benefits to the

users, and expected to grow further with

financial globalization. However, past

credit events exposed many weaknesses

in the organization of derivatives trading.

The aim is to minimize the risks associated

with such trades while enjoying the

benefits they bring to the financial system.

An important challenge is to design new

rules and regulations to mitigate the risks

and to promote transparency by improving

the quality and quantity of statistics on

derivatives markets.


The FiRe AWARD 2016



Compiled by Angela Mutiso,

Barclays Bank Bags Overall


It is said that the longest journey in

the world begins with a single step. The

Financial Reporting (FiRe) Award was

launched in 2002 and is today believed to

be the most prestigious and coveted award

in East Africa for Financial Reporting.

The promoters of the FiRe Award were

delighted to mark the 15th Anniversary

of the award whose 2016 theme was;

Accountable governance for excellence

and reliability in financial reporting in

East Africa.

Barclays Bank of Kenya was the overall

winner of the 15 edition of the Financial

Reporting (FiRe) Award. Additionally,

the bank won in the banking, listed,

governance and in the International

Financial Reporting Standards (IFRS)

categories. Of course there were several

other winners in various categories in this

well attended event that took place at the

Windsor Hotel in Nairobi.

The idea behind it is - to strengthen

financial markets and attract investment.

Business entities would have to make

disclosure of their activities to enable

a wide range of stakeholders to use

such information in making economic

decisions. For 15 years, the FiRe award

has continued to thrive and has held an

annual gala dinner in which the winners

are presented at a colorful ceremony by

The Institute of Public Accountants of

Kenya (ICPAK); The Capital Markets

Authority (CMA) ; The Nairobi Securities

Exchange (NSE) and the Public Sector

Accounting Standards Board (PSASB);

who are the joint promoters.

Over the years, the FiRe Award has

recognized and awarded the best reporting

entities in East Africa. The award is

aimed at promoting integrated reporting

through enhancing accountability,

transparency and integrity in compliance

with appropriate financial reporting

framework and other disclosures on

governance, social and environmental

reporting by private, public and other

entities in East Africa.

Highlights of the 2016 FiRe


The PSASB Chairman, Mr Bernard

Ndung’u, who is also the Director General

of Accounting and Quality Assurance

Services at the National Treasury, said

303 public sector entries participating

in 2016, is a clear indication that the

decision to adopt the International

Public Sector Accounting Standards

in 2014, as the reporting framework,

is bearing fruit. The public Institutions

include; Ministries, Departments and

Agencies, State Corporations and Semi-

Autonomous Government Agencies, and

the County Governments. In addition

to the 303 public sector entries, there are

another 96 entries from across East Africa

in the financial services sector, industrial,

commercial and services sector, public

benefits organizations, pension schemes

and learning institutions, bringing the

total entries to 399 in 2016 compared to

376 in 2015. Mr Ndung’u said; ‘’Increased

participation by the public sector

underpins the commitment to more open

accountability in the use of public funds

and offers the entities an opportunity

to be assessed against global standards’’.

The CMA Chief Executive, Mr. Paul

Muthaura, noted; “responsible financial

reporting contributes significantly to

Barclays Bank employees celebrate their win together

with Ms Olajobi Makinwa, UN Global Compact Head of

Transparency 20 JANUARY & Anti - FEBRUARY Corruption 2017 Initiatives

The FiRe AWARD 2016




CPA Dr. Patrick Ngumi (PhD)


Mr. Geoffrery Odundo

PSASB Chairman

CPA Bernard Ndung’u

Capital Markets Authority CEO

Mr. Paul Muthaura


The FiRe AWARD 2016

ICPAK Chief Executive Officer CPA Dr. Patrick Ngumi

presents an award to Kenya Bankers Association

Chief Finance Officer Mr. Kennedy Mutisya.

ensuring that financial information put

out by the entities is reliable and enables

investors make informed decisions as

they participate in the capital markets”.

The NSE Chief Executive, Mr. Geoffrey

Odundo, said; “The increased public sector

participation in FiRe Award, will enhance

accountability and transparency of public

institutions, thereby increasing their

attractiveness to investors and catalyzing

economic growth “. The ICPAK Chief

Executive, Dr. Patrick Ngumi, observed;

‘’the entry of public sector in the FiRe

Award creates expectations of enhanced

disclosures of financial and non-financial

information by public sector entities and

contributes significantly to buttressing

the informative value of public sector

financial reporting as envisaged in the

Public Financial Management Act, 2012’’.

The awards focus on voluntary

disclosure of relevant information in

annual reports that go significantly

beyond the minimum legal and regulatory

requirements. The awards continue to

be important for stakeholders and are

expected to embed a stronger financial

reporting culture in Kenya. Participating

entities benefit from an evaluation

feedback which helps them to improve

their reporting every year. Entry for Fire

Award is open to all entities and no

charges are levied. Ms Olajobi Makinwa;

The UN Global Compact Head of

Transparency and Anti-Corruption

Initiatives responsible for the UN

Global Compact’s 10th principle on

Transparency and Anti-Corruption was

the Guest of Honour during the

Fire Award Gala Dinner and

Award Ceremony, Ms Olajobi

in her address, commended

Kenyan companies for advancing

principles of good corporate

governance as well as sustainability

reporting stressing that, “culture

of accountability is key to

social economic empowerment,

especially in Africa where cases of

poor governance abound.”

Jim McFie, a Fellow of the

Institute of Certified Public

Accountants of Kenya and FiRe

Award Chief Judge had this to

say: “The first sub-four minute

mile in the world under timed

conditions was run on 6th May

1954 at Oxford University’s Iffley

Road Track by a post-graduate

medical student, Roger Bannister.

Bannister was born on 23rd

March 1929, and is still alive today

at the age of 87. You can watch that race

on YouTube. Also watch “Jim Ryun vs

Kip Keino, London 1967” and “Keino

vs Ryun, 1500m, 1968 Olympic Games,

Mexico City”: these two videos show

how Kichoge learnt his lesson in 1967

in London and used the knowledge he

gained in that race to win the second of

many gold medals Kenya has won in the

Olympics: Kipchoge displayed tenacious

will power and determination, to go

on and win a race that he had already

dropped out of due to illness. The strong

desire to win nudged him out of his

hotel room, from where jogged to arrive

at the stadium just before the start of

the 1,500m race. Kipchoge won the race

a clear 20m ahead of the pack to win

that precious gold medal. In the same

FCPA Dr. James

Boyd McFie (PhD)

Mexico City Olympics, Naphtali Temu

took Kenya’s first ever gold medal: his

win in the 10,000m race, marked Kenya’s

triumphant entry into the big league

of athletics. People around the world

today know Kenya for many reasons: but

the peoples of the world are constantly

reminded of Kenya’s existence by Kenyan

athletes winning marathons and races all

over the world.

But what does this have to do with

the Financial Reporting Excellence, or

the FiRe, Award? A lot: these victories in

athletics are not solely due to the Godgiven

gifts of the people born with these

talents; they are the result of years of

hard work. These athletes start training

when they are at school where they are

spotted by trainers who go out of their

way to develop young women and men

into world champions. Kipchoge did

not beat Jim Ryun in 1967, just as in the

1952 Olympics in Helsinki, Bannister

finished fourth in the 1,500 metres. But

both men used the “defeat” in the earlier

race to win in the later race. Kipchoge’s

win in Mexico City was a triumph: but

when that first sub-four-minute mile was

run by Bannister, a great feat in that year,

the time was six tenths of one second shy

of four minutes: in the last 50 years the

mile record has been lowered by almost 17

seconds: currently, it is held by Morocco’s

Hicham El Guerrouj, who ran a time of

3:43.13 in Rome in 1999. Somehow, the

human race gets better and better at what

it does if the stakes are high enough: and

the same is true for the FiRe Award: each

year it becomes harder and harder to win

the best overall prize, and the many prizes

contested for across the different sectors.

So, which entity won the coveted FiRe

Award this year? Barclays Bank of Kenya

Limited was the overall winner this year

2016: they (the Barclays team) have

competed many times before and have

sometimes won and sometimes not: close

behind Barclays were Sameer Africa, the

2015 FiRe Award winner; third, or second

runners up as we like to say in Kenya, were

Standard Chartered Bank – who were very

close to Sameer Africa. The three annual

reports were high quality documents.

Barclays were two and a half, and three

and a half, percentage points higher than

Sameer Africa and Standard Chartered

respectively in IFRS compliance; Barclays

were one point four, and zero point nine,

percentage points higher than Sameer

and Standard Chartered on corporate

governance disclosure. All the other


The FiRe AWARD 2016


Barclays Bank employess lifting high Overall Trophy and other trophies

won during this year’s Financial Reporting Award at the FiRe Award

From left: NSE CEO Geoffrey Odundo, UN Global Compact Ms. Olajobi

Makinwa, Barclays Bank CFO Yusuf Omari, CMA CEO Paul Muthaura

and Benard Ndung’u Chairman Public Sector Accounting Standards

Board celebrate the bank for emerging the overall winner

FiRe Award 2016 Winners unveiled-FCPA Fernandes Barasa, ICPAK

National Chairman hands over a trophy to the Office of the Controller

of Budget staff for being winners of IPSAS Cash category

Judicial Service representative CPA Susan Oyatsi receives

a certificate of recognition from Benard Ndung’u Chairman

(PSASB for being the most improved public sector entity

From left;

FiRe Award Chief

Guest Ms. Olajobi

Makinwa, ICPAK

Chairman FCPA

Fernandes Barasa,

NSE CEO Geoffrey

Odundo, CPA Patrick

Abachi-Head of

Secretariate PSASB

and Capital Markets

Authority CEO Mr.

Paul Muthaura


The FiRe AWARD 2016

factors were most or less the same. But

just as Kipchoge proved in Mexico City in

1968, there is only one winner: in the 2016

FiRe Award, that winner was Barclays –

congratulations to them for a very fine

Integrated Report. In the 2016 FiRe

Award, there were more entries than ever:

ninety six entities competed in the private

sector part of the competition, divided into

banks, insurance companies, industrialcommercial-services

companies, companies

that use the IFRS for SMEs, small

companies which use full IFRS, SACCOs,

Pension Funds and Not-for-profits; in

the public sector, three hundred and three

entities competed. Prepare yourself now for

next year’s competition: and have Barclays

in the cross-hairs as you aim for the gold.

I tried to find the Barclays Bank financial

statements for 2015 at https://www. However,

each time I tried, I received a message as

follows: “You don’t have permission to access

/personal on this server”. Under the new

Kenya Companies Act, all quoted companies

must maintain websites and have their

latest financial statements available on their

websites for a period of at least one year: I

am sure the non-availability of the Barclays

financial statements is a temporary hitch: it

is worth spending time going through the

Barclays Integrated Report 2015 as part of

your preparation for next year.”

Meanwhile, in his address to the media

during the post gala dinner conference,

FCPA Julius Mwatu Vice Chairman of

ICPAK said (excerpts); “arising from this

year’s evaluations, we can confidently report

that FiRe Award has come of age. The

promoters are pleased to note that we had

a total of 399 entries where 303 entries were

received from public sector and 96 entries

from the private sector. We commend

Public Sector Accounting Standards Board

(PSASB) for bringing on board public

sector entities.

Notwithstanding, we would like to give

a highlight of areas that we think need

improvement for both public and private


i. Report of the Independent Auditor

All the private sector entities that submitted

their annual report and financial statements

had unqualified opinion. For Public sector

entities, since the award is mandatory,

all entities are received and review in

accordance with Section 194(4) of the PFM

Act, 2012, which provides that “The Board

shall monitor the adherence to the standards

by all State organs and public entities.”

ii. Companies Act Requirements Cap 486

The increased

public sector

participation in

FiRe Award,

will enhance

accountability and

transparency of

public institutions,

thereby increasing

their attractiveness

to investors

and catalyzing

economic growth.

In a number of entities that submitted their

annual reports and financial statements,

there was no linkage between the companies’

act and the financial statements. Under

section 148 of the Companies Act, Cap

486, a company is required to present the

balance sheet and profit and loss account.

Management should ensure that they

include a statement of compliance with the

Companies act.

iii. Public Finance Management Act 2012

The PFM Act 2012 is applicable to all public

sector entities and seeks to ensure effective

management of public finances by the

national and county governments as well as

state corporations. The act lays down some

of the disclosures that are to be provided

by entities. During the evaluation the main

non-compliance issues included: -

• Failure to include the name and signature

of the accounting officer who signed

the annual report and audited financial


The disclosures of assets and liabilities

require significant improvement to facilitate

inventory of assets.

• Analysis of pending bills, outstanding

imprest and other payables – several entities

simply provided a listing as opposed to

including aged analysis.

• Very few entities presented a statement

of the national government entity’s

performance against predetermined

objectives – this can be achieved by providing

a detailed performance reports template for

MDAs and other entities to populate which

links the strategies of the entities to its

performance and budget(s)

Governance Reporting

The FiRe Awards evaluation for 2016

took into account the new developments

which included the Mwongozo - the Code

of Governance for State Corporations

issued in January 2015, and the Code

of Corporate Governance Practices for

Issuers of Securities to the Public 2015.

It was noted that a number of entities are

yet to incorporate some of the changes

introduced and the evaluators hope that by

next year (2017) there should be significant

improvements in the reporting and practices

of governance.”



On Thursday, October 27 2016 before the

Gala dinner, a Pre - FiRe Award conference

was held at Safari Park Hotel in Nairobi

with the same theme. The following topics

were discussed;

The FiRe Awards 2016 Trends and

Evaluation Process – the Judges’ perspective

• Will your Governance Practices stand

the test of time?

• Transparency and Accountability in

Government Accounting – the journey

• Past winners’ experience; Return of

investment of improved financial reporting

The new auditor’s report and its

informative value

The future of organization reporting

in East Africa – exploring integrated and

sustainability reporting in East Africa

Benefits of Participation

One of the major benefits of participating

in the FiRe Award is that each institution

that submits its financial accounts also

receives Individual feedback from the FiRe

Award evaluators, a confidential assessment

of the highlights and shortcomings of their

documentation. The feedback is intended

to enable the institution to improve

on its reporting and by extension its

communication with stakeholders.

You are encouraged to participate.

The promoters thank the 2016 judges and

evaluators for their hard work and dedication

in reviewing the 399 annual reports and

audited financial statements of entities

that entered the competition in 2016. Their

volunteer contribution elevates the overall

quality of corporate reporting in the East

African Region. Without their dedication and

sturdiness, no award would be presented.


The FiRe AWARD 2016

FiRe Award Promoters Congratulate

Winners of 2016 FiRe Award edition

FiRe Award promoters congratulate winners of 2016 FiRe Award Edition. The award seeks to promote integrated reporting

through enhancing accountability, transparency and integrity in compliance with appropriate financial reporting framework and

other disclosures on governance, social and environmental reporting by private and public sectors domiciled in East Africa. The

annual Award is organized by the Public Sector Accounting Standards Board (PSASB), Capital Markets Authority (CMA), Nairobi

Securities Exchange (NSE), and the Institute of Certified Public Accountants of Kenya (ICPAK).

The winners honored in each industry are as follows:



































Independent Offices &

Constitutional Commissions

Industrial, Commercial &



Micro Finance Institutions


Not for Profit











IFRS (Public Sector Entities)



Environmental & Social



Promoters’ Recognition


































































































Public Policy



By Paul G.,

The cooperative sector has been

a key driver in the Kenyan

economy in creation of wealth

and employment opportunities.

The Kenyan cooperative

movement was in 2013 ranked first in

Africa and seventh internationally. The

government throughout history has come

up with strict policies that will provide

guidance and regulation in this vibrant


The fourth schedule of the Constitution

of Kenya 2010 gives counties powers to

develop and regulate cooperative societies.

Previously they were regulated by the

commissioner of cooperatives whose arm

was under the ministry of cooperatives and


The statutes that provided for their

creation, development and supervision

included the Cooperative Act Cap 490

which was last reviewed in 2004 and

the SACCO societies Act of 2008. It

is however important to note that the

SACCOs that operate the Front Office.

The emergence of the devolved units as

a result of the operational zing of the new

Constitution has opened a new era on how

cooperative societies will operate within

the country. Already several counties have

enacted the cooperative societies Acts

within their jurisdiction. Examples of these

counties include Machakos and Meru.

Others like Makueni, Kilifi, Kiambu have

already published the relevant cooperative

societies bills and invited members of

public to give their input. A look into

the already enacted and proposed county

legislation on the cooperative societies

shows a lot of similarities between them

and the cooperative Act that is ceasing to

be operational in their areas. It is important

to note that there are key differences

between the statutes as well.

The county statutes will see a

transfer of roles from the ministry of

cooperative societies in the national level

to the department of cooperatives in the

county level. These County Acts create

a directorate of cooperatives which will

assume the role that was previously held

by the commissioner of cooperatives. It

is important to note that most county

legislations are clearly stating that their

scope does not include the deposit taking

SACCOs whose mandate falls under the

Sacco societies Act 2008.

The cooperative Act provides that for a

cooperative society to be registered, at least

ten members must sign the application

to be registered into the cooperative. The

Act also provides for a minimum number

of members for a primary cooperative

society to be ten. The Machakos, Meru

County cooperative Acts both provide

that the minimum number of people who

are eligible to form a primary cooperative

society should be fifteen. The laws require

that at least ten of the applicants must

sign the application to be formed into a

cooperative society.

Cooperative Accounts and


The cooperatives acts of the counties under

review have the same provisions as the

previous Act within their jurisdiction. The

drafters are also careful to acknowledge

the role of ICPAK in formulating

standards within the country. However

the legislations do not only recognize the

application of the International standards

of Accounting but empower the institute

to provide guidelines on the standards to

be adopted in the country. The auditors

that will be allowed to audit the books

of cooperatives within a specific county

will have to obtain registration from

the director of cooperatives within that

county. This means that if an auditor seeks

to audit cooperatives from two different

counties, he will be required by law to

register with the directors of cooperatives

from the two counties. This of course will

mean added costs of seeking registration

for auditors who have audit engagements

with cooperative societies from different

counties. The position that was previously

held is that the auditors would seek

registration from the commissioner of

cooperatives and then practice their

audit all over the country with a single

registration. The devolved legislation

brings yet another change; where the

accounts previously being registered at

the commissioner’s office will now be

registered at the county directors’ level.

Since the regulation of professionals

falls under the national government, it is

our hope that to facilitate the movement

of labour and services from one county

to another freely without the bottle

necks that these county legislations may

bring about, ICPAK will engage the

county governments through the council

of governors so that the counties can be

able to enjoy from a pool of qualified

Accountants dealing with their books.

Audit sanctioned by the


Among the counties that have enacted their

County Cooperative Acts, Meru County

seeks to annually conduct governance,

financial and management systems audits.

This if carried out in the right way will

enhance corporate governance among the

cooperatives within the counties.

The effectiveness of carrying out annual

systems audits will be determined by the

quality of the audit personnel who will

carry out these audits. Since these audit

recommendations will have far reaching

effects on the systems of an individual

cooperative, it would be necessary for

the Counties that have provided for

this in their legislation to engage the

relevant professional associations and the

stakeholders for an all effective process.

The way forward

Since the role of managing cooperatives

have been devolved and the governments

have started domesticating their laws, the

onus is now on the various stakeholders

to ensure that there is a smooth transition

into the devolved system and that the

devolved units will in turn be a platform

for their growth and not subjugation.

Only then can one say that (especially

for) primary cooperatives or those that do

not fall under SASRA will have an avenue

to develop themselves.


Business Practice and Development

ICPAK Annual

Seminar 2016



By Gladys Kibui

Having worked as an

accountant for sixteen years in

the SME sector and currently

as a volunteer in the micro

enterprises (informal) sector

since 2009, I have learnt lessons worth

sharing with fellow accountants.

When I worked with the formal

SME sector, I was able to participate in

professional development though with cost

constraints and questionable relevance of

the training. As an accountant of a small

organization, one has to finance his or her

own professional development. With the

SME sector employing almost 80% of

labor force, most of the accountants will

identify with my sentiments. Apart from

fulfilling the requirements of the Institute

at ones cost, professional development

for non practicing accountants working

in the SME section has little significance

on the effectiveness of the accountant.

Most of the professional development for

these accountants is derived from their

auditors in the form of regular updates,

annual newsletters and budget review

seminars which are free. This however

is not considered by the institute in

computing the annual hours required for

professional development. If encouraging

lifelong learning is the goal of professional

development, this should be considered

alongside reading and writing other related

books and articles.

This is not only more relevant for the

professional development of the individual

accountant but also for the accounting

profession and the nation as a whole.

The profession benefits through creating

awareness among the business fraternity for

a larger market of the accounting services.

The nation will benefit through job creation

for the accountants as well as growth of

well managed and profitable enterprises.

As an individual accountant, one is able to

mentor other accountants thus encouraging

growth in the profession. Over the period

I worked in the SME sector, I mentored

many accountants who have since finalized

their professional courses. Many of these

have not joined the institute but continue

to work as accountants without any

professional accountability. This not only

hinders professional development but

also explains the lack of accountability in

Kenya. With these two lacking, corruption

has been on the rise in the country to the

shame of the accounting profession.

It is my submission that ICPAK

consider recognizing the professional

development of non practicing members

by practicing members as outlined above.

This will not only make continuous

professional development relevant

affordable but also manageable, using

the time tested participatory approach.

Practicing accountants should be obligated

to develop the accountants of their client

organizations and therefore hold them

accountable for quality results. This will

bring to the accountability bracket the

SMEs and body corporates who have

always had their financial statements

audited. This includes most nonprofit

organizations and micro enterprises.

The benefit of this consideration

includes increased accountability and

curbing of the current run away corruption.

Another benefit is the business continuity

and sustainability of the economy through

growth of small audit practices as well as

professionally managed organizations.

In the absence of this, accountancy

is slowly sliding to irrelevance if my

experience in the informal sector is

anything to go by. Lack of book keeping

and accountability has been used both as

a means of advancing corruption and also

as an excuse for poverty. In the latter case,

many of the so called micro enterprises are

making incomes in excess of half a million

shillings on a monthly basis but pay no

taxes as there are no records to prove the

same. This in effect serves to discourage

entrepreneurial growth and accountability

for fear of paying taxes.

As a qualified and experienced

accountant who has developed more

than a dozen accountants and numerous

successful organizations, I would qualify for

a practicing license which is not possible

under the current professional development

regime. Yet most of the practicing auditors

whom I have worked with during my

work in the micro enterprises have relied

on my work just as they do with the work

of internal auditors. Further, small audit

practitioners are not able or willing to

partner with non practicing accountants in

most cases. The unfortunate effect of this

is that with the death or incapacitation

of an audit practitioner, the practice

comes to the end as has happened to me

twice. The proposed system would be a

welcome incentive for small practitioners

to develop accountants for the benefit

of the profession and the economy as

a whole. The regime would also ensure

succession planning in small audit practices

as collaborating accountants would be

appointed to take over the practices of

incapacitated practitioners. This is a very

important perspective as CPAs have been

trusted in succession planning for client

organizations yet they do not practice the



Public Policy


Reforming Financial Management

In The Public Sector

By CPA Nelson,

Strengthening office of the

Auditor General

We have noticed significant attention

being given to security apparatus of the

country in the past in order to secure

our borders and maintain law and order

internally including shutting out oversight

agencies from policing them- national

assembly not spared in the guise of

confidentiality. Under 2010 constitution,

the office of the Auditor general has

been given mandate to audit all public

institutions. In order to discharge this role

in an effective way, sufficient funds should

be allocated to protect public interest.

Eurobond saga is still fresh in our minds

with over sh215billion still shrouded in

mystery. The other mega scandal of 1990’s

was Goldenberg ksh5. 8billion.The funds

sought will be used to strengthen system

infrastructure including partnering with

forensic accountants to deal with mega

crimes of the magnitude the country is

witnessing. Kenya’s spending budget has

grown over the years and now stands at

ksh2.2 trillion

Reforming financial

management system at

national treasury

We are all aware National Treasury has

been undergoing reforms over the years

in order to deliver a master piece to the

nation in terms of financial management

relying in what was put in place by

colonial treasury and financial orders that

were put in place by past office holders

Michuki, Mule, Nganga, Kibinge. There

was sterling performance during their

tenure resonating to district treasury and

agencies. Remember there was no financial

management act or IAS/IPSAS.

It is reported that IFMIS was acquired

and installed at ksh5bllion.It is now time

we review the effectiveness of the system

through systems audit as provided for in

Public Audit Law 2015. Funds should be

set aside for this mega project to assist

National Treasury perform its oversight

role to its agencies.

Reports from OAG indicates auditees

are not taking seriously audit reports.,

viewing auditors as enemies putting

under check their high appetite for

wasteful spending. Governments need

to invest in developing their people; the

most appreciable assets, to protect state


They should be open forums to

discuss the output of auditor reports

initiated by principal Auditee-National

Treasury; targeting all heads of public

institutions and county governments as

a demonstration of buy in of challenges

encountered in the use of public resources.

This is an avenue with high payoff and the

government should embrace and allocate

resources for sustainability of momentum

of change.

Opening balances in financial


We were made aware that the government

has no opening balances in their financial

statements, as echoed by AOG during

ICPAK Annual seminar this year. No

lightning will strike in order for this

to be realized. We have watched this

glaring omission since 1963.Government

must invest in modernizing its financial

reporting system. National Treasury should

spearhead this exercise beginning 2017-

2018 fiscal year. This is a mega project

but it is being suggested at a time when

Kenya’s resource of accountants stand at

over 20,000 at hand to help government

manage change. The government should

be exhorted to provide funds to manage


Strengthening Public

Procurement Oversight

Authority (PPOA)

This is an institution that was established

following the enactment of the Public

Procurement Act 2005 Rules 2005 to


Public Policy

Government cash systems have locked out commitment

in form of LSO/LPO from the full glare of the public

to comprehend the magnitude of the debt load public

institutions are carrying. Remotely NARC Government

instituted a committee to validate debts owed to contractors

for road projects. The exercise was a tip of the iceberg.

bring sanity to the procurement arena.

Just like IFMIS, PPOA as an

institution has been in place for quite a

while. PPOA is an oversight institution

and requires urgent review to establish

its effectiveness. With sh2.2 trillion

government spending at stake following

massive fraud, National treasury should

allocate a sizeable amount of resources

to power supervision of government

procurement. and other oversight

institutions. We must support this

institution just like AOG and government

internal audit department. Strengthening

involves partnering with forensic experts

and other disciplines to combat mega

crimes that have brought this nation to its


Validation of trade creditors

Government cash systems have locked out

commitment in form of LSO/LPO from

the full glare of the public to comprehend

the magnitude of the debt load public

institutions are carrying. Remotely NARC

Government instituted a committee to

validate debts owed to contractors for

road projects. The exercise was a tip of the


Recently the government through the

CBK approved loan facilities to counties up

to 5% of audited revenues oblivious of the

harm the facility does to an unsuspecting

business community. Public institutions

have over the years been overrunning

their budgets and keeping undisclosed

liabilities running into millions due to a

flawed financial reporting system, cash

recognition model familiar with public

officers to the detriment of an accrual

system which recognizes unsettled bills

provided by the business community. This

is called spontaneous credit as it carries no

interest. This window of support has been

abused to the detriment of an unsuspecting

business community, hence the need to

look holistically across all public entities.

It has fuelled indiscipline in the financial

management system. Validation of trade

payables as a government project entity


Immediate operationalization

of audit committee

Considerable resources have been poured

by government to have a policy document

put in place to assist public entities grow

their business to partner with the newly

energized internal audit department.

The Internal Audit Department has

demonstrated that it can deliver a master

piece without fear of intimidation by

the executive following the Afya House

ksh5 billion health expose. In the past it

has operated as a moribund department

providing no value to the public in

safeguarding the public purse. More

resources should be poured into the

internal audit department with a proper

framework for working to boldly expose

rot in the public service; to assist the

executive in growing government business.

The strengthening of internal audit

department is a recognition of executive

partnering with a true resource preserver

coming before the OAG executes its

constitutional role.

The department emergence recently

indicates that war on graft is on course. It

is gratifying.


Business Practice and Development


Guidance on implementation of a learning outcomes

approach in professional accounting education

By CPA Isaac M. Njuguna

The International Accounting

Education Standards Board

(IAESB) is an independent

standard-setting board under

the International Federation of

Accountants (IFAC) that serves the public

interest by establishing standards in the

area of professional accounting education.

These standards prescribe technical

competence and professional skills,

values, ethics and attitudes. Through its

activities, the IAESB enhances education

by developing and implementing

International Education Standards (IESs)

which increase the competence of the

global accountancy profession and thus

contributing to strengthened public trust.

The IAESB is made up eighteen

board members who are competitively

selected following nominations by various

IFAC member bodies from around the

globe. To support the IAESB’s activities

are Technical Advisors who actively

participate and advise the Board on

various strategic issues revolving around

professional accounting education and


As part of the initiatives to enhance

the competence of professional

accountants during the initial professional

development (IPD) and continuous

professional development (CPD) stages,

the IAESB adopted a learning outcomes

approach both in the development and

implementation of IESs. The learning

outcomes approach is broadly based

on clear achievement of specified

competencies which are demonstrated

through a reliable and objective assessment

or evaluation.

To this end, the IAESB has issued a

paper titled Guidance on Implementing

a Learning Outcomes Approach to act as

a reference to the IFAC member bodies,

professional and academic accounting

examinations bodies including universities

and other stakeholders with interest in

professional accounting education.

The key highlights of the Guidance

paper are presented below. Additional

details on the Guidance paper can be

accessed on the IFAC website

What is a Learning Outcomes

Approach in professional

accounting education?

A learning outcomes approach focuses on

the individual’s demonstrated achievement

of the learning outcomes at the targeted

level of proficiency and not on the learning

process. Learning outcomes for professional

accountants are prescribed by a number

of International Education Standards

including the following:

IES 2 – Technical Competence

IES 3 – Professional Skills

IES 4 – Professional Values, Ethics and


IES 5 – Practical Experience

Demonstrating the achievement of

these outcomes provides evidence of the

professional competence of the individual

to perform the role of a professional

accountant. A learning outcomes approach

embodies the idea that learning and

development experiences are most effective

when based on what the individual needs

to demonstrate. The learning outcomes can

therefore be used as a framework on which

to build professional accounting education

learning and development experiences.

The Guiding Principles

The guiding principles for implementing

a Learning Outcomes approach address

the following critical areas in professional

accounting education:

1. Design

2. Assessment

3. Governance

The above elements are consistent with the


Business Practice and Development

requirements of the IESs, which include

achievement of the prescribed learning

outcomes, regular review and update of

programs and establishment of appropriate

assessment activities.

These guiding principles are further

explained below:

(a) Design

The design of a professional accounting

education programme is based on the role

to be performed by the individual. The role

determines the identification of relevant

competence areas and learning outcomes.

The content of and instructional design

methods used for the programme align

with the achievement of the identified

learning outcomes at the desired level of


The design of a programme is regularly

evaluated in response to available

information on whether it is meeting

the identified learning outcomes so as to

continually improve its effectiveness.

(b) Assessment

The achievement of learning outcomes by

the individual is measured and evidenced

using assessment activities. Assessment

activities are designed to have high levels

of reliability, validity, equity, transparency

and sufficiency. An assessment activity

involves a comparison of an individual’s

performance to a defined level, standard or

benchmark aligned with the desired level

of proficiency.

Feedback on the results of assessment

activities is provided to an individual to

further their professional development.

Assessment activities and the defined

benchmarks and standards are regularly

evaluated in response to available

information on whether it is meeting

the identified learning outcomes so as to

continually improve their effectiveness.

(c) Governance

Organizations responsible for the

programme continually evaluate their

programmes to improve their effectiveness.

Organizational structures and processes

provide direction and oversight to ensure

that the guiding principles in the areas of

design and assessment are monitored.

The Value Proposition for a

Learning Outcomes approach

The implementation of a learning

outcomes approach will serve the public

interest by enhancing the development

of professional competence needed to

perform a role as a professional accountant.

A learning outcomes approach integrates

learning outcomes, programme design,

assessment activities and governance in

a process of continuous improvement.

It embodies the idea that learning and

development experiences are most effective

when based on what the individual needs

to demonstrate. A learning outcomes

approach therefore provides an effective

approach to developing professional

competence - an important objective of

professional accounting education and


An effective programme is critical to

the development of competent professional

accountants, strengthening the quality of

services they provide. This is foundational

to the trust that stakeholders place in

professional accountants. It also enhances

the reputation of the programme provider

through the learning experienced by the


The investment in implementing,

maintaining, and continuously improving

a learning outcomes approach will deliver

long term and sustainable benefits in the

public interest, preparing professional

accountants for successful careers and

enhancing the success of programme


Further benefits of a learning outcomes

approach for stakeholders include:

• Increasing the credibility of the

accountancy profession

• Increasing the quality of services

provided by the accountant

• Enhancing professional growth and

confidence for the accountant

• Providing a higher degree of

accountability for the programme provider

and the accountant

• Potentially improving less effective

portions of a learning and development

programme, increasing the time available

for more critical areas

• Reducing the reputational risk,

or improving the reputation, of the

programme provider.


The learning outcomes approach

can be viewed as part of the broader

competence based learning model which

is the preferred learning model in most

education systems today. For professional

accounting education, a combination

of theoretical and practical learning

environments support the achievement of

learning outcomes. In addition, the mode

of testing including the use of case studies

and scenario based questions enhances the

realisation of learning outcomes.

Moving forward, KASNEB and

ICPAK working jointly are set to

introduce a Trainee Accountants Practical

Experience Framework (TAPEF) through

which students pursuing the Certified

Public Accountants (CPA) qualification

will be required to log in their practical

experience as part of the initial professional

development. The experience logged in will

be evaluated at the point of application for

membership to ICPAK.

It is also worth noting that the IAESB

has uploaded on the IFAC website a

number of examples on good practice in

the implementation of a learning outcomes


Moving forward, KASNEB and ICPAK

working jointly are set to introduce

a Trainee Accountants Practical

Experience Framework (TAPEF) through

which students pursuing the Certified

Public Accountants (CPA) qualification

will be required to log in their practical

experience as part of the initial

professional development.


Finance and investment

Geoffrey Odundo, Chief

Executive of the Nairobi

Securities Exchange (NSE)




By Ndirangu Ngunjiri,

Currently several NSE listed

firms are in the process of

looking for a strategic investor

or issuing right issues in order

to raise the working capital

level. A positive cash flow from operations

implies that a firm was able to generate

enough cash from continuing operations

without the need for additional funds

and shall give high returns (dividends)

to the shareholder. Some firms created

this through dividends payment freezing.

A negative cash flow from operations

indicates that additional cash inflows were

required for day-to-day operations of the


Working capital management is

investment in current assets and current

liabilities which are liquidated within

one year or less and are crucial for a firm’s

day-to-day operations. This is the money

needed to finance the daily revenue

generating activities of a firm. Working

capital management plays a significant role

in determining success or failure of a firm

in business performance due to its effect

on a firm’s profitability as well on liquidity.

Companies have been required to

provide a statement of cash flow as per

the company’s act. The purpose of the

statement is to disclose information about

the events that affected cash during an

accounting period. The statement looks at


Finance and investment

Firm profitability and the period taken to

convert inventories to sales and the time

it takes for firms to pay creditors affect

the firm’s performance.

the changes in the levels of cash directly,

eliminating many of the weaknesses with

the traditional estimate of cash flow.

The statement divides company uses

and sources of cash into three primary

segments—operating, investing, and

financing cash flows. The operating cash

flow segment is designed to measure a

company’s ability to generate cash from

day-to-day operations as it provides goods

and services to its customers.

Business success depends heavily on

the ability of CFO’s to effectively manage

the components of working capital.

A firm may adopt an aggressive or a

conservative working capital management

policy to achieve this goal. For the last

three years several NSE listed firms had

liquidity problems and are unable to pay

their short term financial obligations

as and when they fell due, consider it in

terms of efficiency of cash, inventory and

receivables management. This has heavily

affected the firms output at the end of the

financial year, making some companies

to be put under statutory management

such Hutchings Biemer andUchumi

supermarket in 2006.

Firm profitability and the period

taken to convert inventories to sales and

the time it takes for firms to pay creditors

affect the firm’s performance. Also the

cash conversion cycle, net trade Cycle

and inventory turnover in days have a

significant effect on the performance of

the firms.

Efficient management and financing of

working capital can increase the operating

profitability of NSE listed firms. They,

therefore, assert that effective policies

must be formulated for the individual

components of working capital.

Performance of the firms improves

with adoption of an aggressive financing

policy, for example Centum have

improved their performance following

the dividends payment freezing. Similarly

the total current liabilities to total assets

ratio increases the performance improves.

Use of current liabilities to finance assets

should be preferable than using long term

debt (financial leverage), because current

liabilities are less costly than long-term

debt. Furthermore an aggressive investing

working capital management policy affects

the performance negatively.

Increasing the proportion of current

assets in relation to total assets enhances

performance as measured by both ROA

and ROE.


Finance and investment




How it aids in Developing and

Emerging Market Economies

By CPA June Nduku Kivinda,


walk into an empty room, and in two

hours, as the Finance Management

Consultant with Earnings Nest

Limited, I will be engaging with

people from all walks of life; as a

facilitator training the short term course

-Finance for Non finance Managers.

Clients I have interacted with include the

proprietors of Carzan Flowers (K) Ltd, a

director from EAGM Ltd (manufacturers

of Luminarc glassware), partners from

Daykio Plantations Ltd, Management

staff from SC Johnson & Son Kenya

Ltd, a director from Human Resources

Management Institute(HRM), staff from

the University of Nairobi MARPs project,

staff from Kenya Bureau of Standards

and Jambo pay, Board members of Stima

Investment Cooperative Society Ltd, an

engineer being groomed to run the family

business McBuilder Ltd and many more.

An area of training that is

always exciting to tackle is

Working Capital Management

When I explain that you can have

profits but no money in the bank or

incur losses and have money in the bank,

the participants are astonished. When I

indicate to a new venture business owner

that profits do not equate to salary, I get a

perplexed look.

I walked into a full room at Meridian

Hotel Nairobi on 31st May, 2016. For

two hours, on a voluntary basis, I engaged

with participants attending an ICPAK

event “Financial Management workshop

for SMEs”. I made a participatory

presentation on Management of Working

Capital for SMEs and touched a bit on

tax planning. Sadly, a common myth in

the management of working capital is

that taxation is a monster. A beehive of

activity ensues, initiating a debate on this

topic. ICPAK concentrates a lot on IFRS

for SME events, say the participants, yet

ICPAK members thirst for more events

that trigger innovation and creativity

which can be used to solve practical

problems SMEs face on a daily basis.

In both scenarios knowledge is being

shared to determine working capital

needs and funding strategies. During

my reflective moments a thought crosses

my mind; “Development Finance needs

Working Capital Management for SME,

Public and Private sectors in developing

and emerging market economies”.

In the Accountant Journal ( July-

August 2016) CPA Moroa Julius Mwita

writes;“In Kenya we have had several

scandals; they include the fall of Uchumi

Supermarket; currently the closure of

Kisii branch, closure of some Tuskys

supermarket outlets, Kenya Airways,

Mumias Sugar Company, Imperial Bank,

Dubai Bank and Pan Papers Millers Ltd.

We have also seen the fall of (Webuye),


Finance and investment

Akamba Bus Services, several community

financial services that were initiated

by IFAD and recently Chase Bank to

mention but a few. Many have been put

under receivership because of worrying

working capital/ liquidity position”

By the way, fellow Accountants, do

you check ICPAK’s Annual reports for

ratios like liquidity ratios, as part of your


Development started Thirty

eight years ago

Incidentally, did you know that ICPAK’s

first Honorary CPA (HCPA) Former

President of Kenya Mwai Kibaki and the

late Tom Mboya issued Sessional Paper

10 of 1965: African Socialism and its

application to Planning in Kenya, which

defined Kenya’s form of economic policies?

Kenya’s economy in the Kibaki years

experienced a major turnaround. Many

sectors of the economy recovered from

total collapse pre-2003 (Accountability

Statement. Just 10% of what the Kibaki

government has done- Government of


Numerous state corporations that had

collapsed during the former President

Daniel Arap Moi years were revived and

have begun performing profitably (“The

Kenya Government-Achievements of the

2002-2007 Government of Kenya”; Kenya Retrieved 1 June


The telecommunications sector

boomed. Rebuilding, modernization

and expansion of infrastructure began

in earnest, with several ambitious

infrastructural and other projects, such

as the Thika Superhighway, which would

have been seen as unattainable pipe dreams

during the bland and largely stagnant Moi

years, completed (“What has the Kibaki

Government done with your money? Truth

be Told” Retrieved

1 June 2010) (“Kibaki’s Achievements on

the infrastructure”.

Retrieved 1 June 2010)- From 1965 to

2003-that is approximately 38 years.

Development started Seven

years ago

Did you know that International Finance

Corporation (IFC) plans to inject Kshs

750 million into PE firm Fanasi Capital

new fund which is targeting between Kshs

7.5 billion and Kshs 10 billion for SME


On Friday October 7, 2016 we were

informed that IFC is making its 2nd

financing commitment to Fanisi having

invested a similar amount in the PE fund’s

initial capital raised in 2010. The 1st fund

raised was USD 43.5 million (Kshs 4.3

billion) in 2010 which the PE firm put

in investments in healthcare, education,

consumer goods and agribusiness. (www.

Accountants, are we able to trace the

impact of this injection approximately 7

years later?

A Homegrown Contribution/


How can Kenyans in particular and

Africans in general contribute towards

Development Finance for the SME, public

and private sectors in developing and

emerging market economies? How do we

embrace Working Capital Management in

these sectors? Did you know that the MSc

in Development Finance programme is an

initiative of the Africa growth Institute

(AGI) in partnership with a number

of academic institutions in Africa and


This programme deals with the main

issues associated with the finance of

public and private sectors in developing

and transitional economies. This interuniversity

programme in Development

Finance, therefore aims to ensure that Africa

and other emerging economies produce

enough development finance experts to

meet their growing development needs.

(A Unique Joint Master’s Programme by

Prof Nicholas Biekepe – Africa growth

Institute. 2013)For sustained development

to be realized, Africans need innovative

and partnership oriented approaches to

policy and programmes (Appleton et


Was there any University in

East Africa already playing

a role in the continent’s

development agenda?

The answer is NO. The universities that did

were based in South Africa and Ghana,

West Africa; leaving a gap in East Africa.

I wanted to study MSc in Development

Finance; the position was; I either go to

South Africa or find a way to have the gap

filled in East Africa. “When you move alone

you move FAST. When you move with

partners you move FAR. Find the balance.”

I told myself. The journey began in 2012.

I contacted Professor Nicholas Biekepe in

South Africa, approached several Kenyan

private universities with a proposal and

When I explain that you can have

profits but no money in the bank or incur

losses and have money in the bank,

the participants are astonished. When

I indicate to a new venture business

owner that profits do not equate to

salary, I get a perplexed look.

got support from ICPAK Council during

the tenure of FCPA Benson Okundi as

chair and FCPA Carol Kigen and CPA Dr

Patrick Ngumi as CEOs of ICPAK (past

and current respectively). An MOU was

signed between KCA University and AGI

at the main campus in Ruaraka on 7th May

2014.The MSC in Development Finance

Programme began at KCA University on

24th September 2016 - From 2012 to

2016 that was approximately 5 years.

In conclusion I would say that the

number of professional qualifications with

a definite cause continue to rise; These

include; Certified Public Accountant

(CPA), Certified Public Secretaries (CS),

Certified Information Communication

Technologist (CICT), Certified Credit

Professionals (CCP) and Certified

Investment and Financial Analysts (CIFA)

Who knows, we may soon have Chartered

Development Finance Analysts (CDFA)

in Kenya and East Africa.







‘‘It is the stone that the builder refused to accept, which

has become the most important stone’ 1 Peter 2:7

(Psalm118:22), ‘the stone that the builders

rejected became the cornerstone’

By Felix Owaga Okatch,

Across the world institutions,

organizations and

corporations have come

up with core value

statements that show

what they are and how they

plan to achieve their goals and

objectives in the short and long

run. That is achieving their goals

over time despite global and local

challenges. They consolidate their

energies through their respective

core values and expect stakeholders

to perceive them favourably.

This is done through developing an

organization’s core values. This is what

an organization stands to achieve. It is

akin to the foundation stone for a builder.

In building construction industry, laying a

foundation is usually the starting point. If it

is not done right at the start the building is

bound to fall in future or lean precariously

like the Leaning Tower of Pisa in Italy.

When developing core values, the

number should not be many lest they

become just general words and statements.

In most cases the numbers of core values

range from eight to three. Generally an

average of five is sufficient.

We now need to address four aspects of

core values for organizations to elucidate

our understanding of the same. This calls

for our understanding of what core values

are and their meanings. We also need to

comprehend how core values are developed



As we do

so we shall

take into account how the core values

are used by institutions and conclude by

illustrating the expected results and way

forward after developing core values for an


Now for a start we need to elaborate

why this core value analysis is important.

Core values at the start are the prologue

and a binito of company analysis of

direction to its goals in business. It is

the second step of corporate or company

vision and mission statements. It puts in

place thoughts of employees, management

and board and the goal congruence of an

organization’s strategic direction. Since it

is developed by all, it gives direction and

communication within and outside

the organization. Core values assist

the organization to move towards

a strategic goal post. Without

asserting energies and values

towards a strategic direction, an

organization is bound to fail.

Core values do assist in creating

a value statement that must be

owned by all. Core values when

known by all staff and owned by

many will guide the organization

from engaging in diversionary

environmental temptations and

distractions. It is important to ensure

that boards, management and staff are

able to get involved jointly and severally

in preparation and ownership of company

core values.

Let us now explain how core values should

to be used by organizations;

All employees, staff, management, and

the board need to be disciplined to focus

on core values. Since all were involved in

developing the core values, there needs

to be focus and attention to the success

of achieving the objectives of core values.

Generally the core values need to be less

than five and easy for company internal

users to internalize. The staff must know

that core values are important and depict

what an organization cannot do without.

It must be noted that it takes time to



develop and own core values. It is not just

a matter of copy paste and hope to get it

right. It must also be emphasized here

and now that if the matter of core values

is not got right the first time, then the

whole edifice of an organization will fall in

the long run. It will be akin to the builder

who neglected the importance of laying

a strong foundation stone at the starting

phase of construction.

Generally core values need to be

elaborated and displayed in organizations’

reception areas, offices, annual report

of accounts and other public boards.

Examples of core values statements could

be as follows:

• Client Success; partnering with clients

• Being ethical; always honest internally

and with stakeholders

• Objective; being objective to ourselves

and stakeholders

• Innovation; embracing technology

between ourselves and among our clients

• Striving excellence; continuous

attainment of new knowledge abilities,

enhance performance of our products and


Now let us elaborate on how to develop

core values. We need to understand that

it is a corporate tragedy if an individual

or a consultant sits down and writes core

values for an organization alone. If it is

not developed by all concerned, and not

owned by them, then it is just a piece of

paper, not core values.

In an organization, all employees,

staff, management and board must

have a joint meeting or workshop to

develop core values. Sometimes it is done

democratically or ranking suggested

values until a consensus is achieved. This

means that the parties concerned must

soul search and question one another

exhaustively before they agree on core

values which truly represent their situation.

An organization needs to question itself

thoroughly. The staff, management and

board must read from the same script.

When there is uniformity, the core values

so developed can weather the storm of

exogenous environmental challenges.

Otherwise it will not be able to survive

in the storms, vagaries and earthquakes of

global mismanagement disasters.

The uses of core values are that it

illustrates what all staff; management

and board have agreed upon and stand by.

When it is owned, once again, it needs to

be pasted in company reception area and

annual accounts and at company functions

in gondola boards. It needs to be akin to

a song and choir of the organization.

Normally when all stakeholders sing the

same tune, even setting a chorus becomes

easy. Dancing steps begin to fall in place

like music that flows in crescendo, good

tempo and the lot which goes with

uniformity. This is what core values are all


In conclusion, the core values are

cornerstones of strategic direction. They

respond to and support a company’s vision

and mission. They serve as pillars in good

corporate governance practices.

NB; Views expressed herein are personal

and do not have any bearing directly

or otherwise with any institution in

general or in particular where I serve as

a director, council member or consultant.

This presentation is made for academic and

educational purposes only. Any injury to

third a third party is regretted since it was

not intended to be so.




Hedging with the new

NSE 25 Share Index

By Samuel Kiragu,

Nairobi Securities Exchange

(NSE) is gearing up for the

introduction on derivatives

financial instruments

trading. NSE will start

trading in stock index futures.

Accountants will be required to

have an insight on how to account for

derivative instruments and hedging

activities. Before looking at basics of

accounting for derivatives and hedge

accounting, it is important to understand

the mechanics of derivatives. This is the

first series of derivatives articles. The next

article will look at the basics of accounting

for derivatives.

In daily financial news, we routinely

hear about the performance of Nairobi

Securities Exchange. This up and down

movement is measured using the Nairobi

Securities Exchange Index. This Index is

computed on a continuous basis during

the day and reported to the public once

the market closes. The stock markets

experts have devised a way of trading on

these insights through stock index futures.

Investment pundits normally use these

futures to speculate and also to hedge

various kinds of portfolio risks.

NSE recently launched a new index; 25

Share Index .This index is composed

of 25 companies most of them from

financial services sector. The new index

lays foundation for the new alternative

investments and derivative products.

These are equity based future derivatives

and Exchange Traded Funds (ETFs).

There are two types of equity based

future derivatives namely stock index

futures and single stock futures. Stock

index future is a derivative that has the

underlying commodity of a basket of

stocks that make up the index. It’s used to

hedge against loss of a portfolio of stocks.

Single stock future on the other hand has

a single stock as an underlying and it’s

used to hedge on a single particular stock.

NSE will start trading on stock index


Speculating with stock index

futures is very exciting but even more

thrilling is hedging a basket of portfolio

of investments using index futures

derivatives. As such we will first engross

ourselves on how to hedge against price

volatility in the market stock using index


Consider Paul, a portfolio manager

at Loita House Investment Bank. He

has a well-diversified stock portfolio of

Kshs 50,000,000. We can assume that

his portfolio has a beta of 1.2 meaning

that a movement of 1 percent in NSE 25

Share Index will result in 1.2 changes in

Paul’s stocks portfolio. The reason why

Paul’s portfolio movements will be higher

than the NSE index is because he may

be having some more volatile stocks in

his portfolio that are not included in the

NSE 25 Share Index. For now, don’t be

overwhelmed by beta, it will make sense

when we apply it momentarily in our

hedging equation.

With the current Kenyan economic

crisis, Paul fears that stock prices will

significantly decline in a near future i.e.

bear market is approaching. He wants to

hedge his portfolio against this adverse


Paul has two options. He can sell all

the stocks now and put that money in T-

bills. After the bear market, he can get the

funds back from T-Bills and put it back

to stocks. This would be cumbersome to

say the least. Liquidating a portfolio of

Kshs 50m will be not be easy. This strategy

may also end up being expensive due to

transaction costs involved like brokerage


Short Hedge

The best strategy that Paul can implement

is to use a short hedge if he is of the

opinion that the stock market will be

bearish over a short period of time. Index

future contracts mature on quarterly basis

and as such they may not be suitable for

hedging prolonged bearish market. They

can be liquidated any time before they

mature since they are tradable in stock


He will go short (sell) NSE 25 Share

Index future contracts. By selling these

futures contracts, he will lock the current

favorable monetary value of the future


The first step Paul will take is to

determine the value of stocks at risk. In

our case, we know the value is Kshs 50m.

The second step will be for him to take an

opposite position in the futures market



Speculating with stock

index futures is very

exciting but even more

thrilling is hedging

a basket of portfolio

of investments

using index futures

derivatives. As such

we will first engross

ourselves on how to

hedge against price

volatility in the market

stock using index


using NSE 25 Share future Index. Paul’s

expectation is that the losses that will be

incurred by the portfolio of stocks as a

result of the price falls will be offset by the

gains in the index futures.

This is how index future hedge will

work assuming that he wants to go

short (sell) NSE 25 Share Index future

contracts on Nov 4 when the index closed

at 4,002.96.

One point to bear in mind is that an

index in itself only tells us about the stock

markets movements but nothing about

money value. We will assume that the

index has been assigned a monetary value

of Kshs 100 for each point movement.

Therefore, the cash value of the index

as of Nov 4 is 4,002.96*Kshs 100=

Kshs 400,296. Index multiplier is what

derivatives pundits call the Kshs 100.

Armed with Cash value of the index of

Kshs 400,296, Paul should now calculate

the number of contracts he needs to

hedge his portfolio of Kshs 50m worth of

stocks. This will be calculated by dividing

his total portfolio of Kshs 50m by the

cash value of the index; Kshs 50,000,000/

Kshs 400,296 = 124.9 contracts. These

contracts are adjusted by multiplying with

beta of 1.2 to give 149.9 contracts. The

industry practice is to round down the

number of contracts to 149. The reason

you are adjusting with beta is because

Paul’s portfolio may end up being slightly

more volatile than the future index.

Now that Paul knows the number of

contracts required to hedge his portfolio,

he will initiate the hedge on Nov 4 by

selling (going short) 149 contracts against

the Kshs 50 million stocks portfolio.

By Dec 16, his fears have been realized

and NSE 25 Share index and the futures

have both fallen by 5% to 3,802.81

points thus losing 200.15 points (Nov 4

index of 4,002.96 minus Dec 16 index of


The stock index future realizes profit

of Kshs 2,982,205 calculated as follows

(200.15 index points*149 contracts*Kshs

100 per point).This is a profit because

Paul is selling these contracts at higher

index that he locked them on Nov 4.He

entered into a future contract on Nov 4 to

sell the underlying at a higher index than

it is worth today.

Let’s now look at the loss/hit that Paul

will incur as a result of fall in stock prices in

his portfolio.He will lose 5%*50,000,000=

Kshs 2,500,000.This loss is offset by the

hedge profit of Kshs 2,982,205 realized

from hedging! Thus, Paul makes a profit

of Kshs 482,205 (The difference between

hedge gain of Kshs 2,982,205 and

portfolio loss of Kshs 2,500,000). His

hedge is termed as effective since he is

making money. The hedge would have

been termed as ineffective if he took a hit/


Normally the profits or losses on

future positions are paid daily based

on the index movement. Positions are

marked to market and profits or losses are

crystallized daily. What this means is that

if the position losses money during the

day, the losses must be paid on that day.

If the position is in profit, a payment will

be received that day. These payments are

called variation margins.

In our example we have assumed that

the profit of Kshs 482,205 is paid in one

block on contracts delivery.




By Anne Njagi

Indeed, you are popular. It is amazing

how addicted we are to you. While it

is said that everything is in the mind,

majority of us cannot execute our

duties without consuming you, from

time to time, every day.

It is also said that your origin is a

significant culture dating back to 14

centuries ago. One school of thought

says that you were discovered in Ethiopia

and another in Yemen. The most popular

legend goes like this…An Abyssinian goat

herder from Kaffa, was herding his goats

through a highland area near a monastery.

He noticed that the goats were behaving in

a very strange way on that particular day.

They jumped around in such an excited

manner, whining loudly and practically

dancing on their legs.

“Why would this happen”? He asked

loudly as he thought he was not in his

real senses. “The gods must be crazy”, he

shouted as he sought to know the source

of this weird behaviour by the goats, by

getting closer to them. For a moment,

he stood still and dumbfounded trying

to figure out why such

a scenario. He then

discovered that the source

of the excitement was a

small shrub with bright

red berries. Curiosity

took hold and he tried the

berries himself. Just like his

goats, he felt energized. He

quickly filled his pockets

with the red berries, rushed

to his wife at home and

shared his experience. She

was astonished and advised

him to share the news on the

‘heavenly berries’ with the

nearby monastery which he


Upon arrival at the

monastery, the news of this

new discovery was not received

well; one of the monks in

anger literally threw them into

the fire. However, according

to the legend, the aroma of

the roasting beans got more



and more appealing until the

monks decided to give this

novelty a second chance. They

removed the berries from

the fire, crushed them to put

out the glowing embers and

covered them with hot water

in a pot in order to preserve

them. After this, all monks

smelled the aroma, tried it

out for some days and found

the concoction’s uplifting

effects were beneficial in

keeping them awake during

their spiritual practices.

From then on they vowed

they would drink this

newfound beverage each


This is coffee

While there are many

schools of thought as far

as coffee consumption

is concerned, there is a

belief that it increases productivity at work

place. Many organizations have therefore

invested on coffee makers in the office

while a number of employees have also

attested to it that each sip comes with

more energy thus increasing productivity.

It is common to hear phrases such as

“Let’s discuss this over a cup of coffee.

Nevertheless, the parties concerned

may not necessarily take coffee during

the meetings. However, the question of

whether there is an increase of productivity

as a result of coffee consumption is

debatable. The question of its effectiveness

towards productivity has no concrete

answer and differs from one individual to

the other.

This notwithstanding, it is a fact that

coffee is the most commonly consumed

beverage in the workplace and has become

an integral part of workplace culture. Both

at work and other social places the phrase

“let’s have a cup of coffee” has been taken

to mean….”let’s have a conversation”.

This is believed to increase creativity and


It is said that when consumed in

moderation, caffeine has positive effects

which include being alert. However, it is

key to note that again this is very personal

and may differ from one individual to

another. According to,

stress in the workplace is rife. Stress costs

result in lost productivity, higher health

costs, errors, interpersonal conflicts and

poor morale. Nearly half of all workers

suffer from some degree of stress.

Coffee breaks are one of the best ways

to help employees deal with stress. While

this can be abused, stepping away from the

desk for 15 minutes helps your brain to

relax and caffeine increases hormone levels

that can improve mood, energy level and

cognitive performance.

White or black coffee?

Again, this is dependent on your choice.

At a coffee corner in an office, a member

of staff was over-heard saying how the

first sip of coffee in the morning gives an

exhilarating moment of fulfilment, simply

beyond words.


Today, the importance of coffee to the

world economy cannot be overstated.

Coffee is crucial to the economies of

many developing countries with exports

accounting to more than 50% of their

foreign exchange earnings. Over 90% of

coffee production takes place in developing


Coffee is not just a drink. It’s a global

commodity. Over 2.25 billion cups of

coffee are consumed in the world every

day. As one of the world’s most traded

products only second in value to oil, the

coffee industry employs millions of people

around the world through its cultivation,

processing, trading, transportation and

marketing; providing employment to

hundreds of millions of people worldwide.

But while the coffee trade is vital to

the survival and economies of many

developing nations, the industry’s pricing

and contracts are unfortunately decided in

conference rooms and on stock exchange

floors in some of the world’s wealthiest






By Angela Mutiso,

It May Turn Out To Be the Best

Investment You Will Ever


Whenever Mary’s husband Mutinda calls

her for a meeting away from home, she

often gets a feeling that he is nagging

her because he tends to start by trying

to establish if she has a written plan for

her business. This is something she hasn’t

got round to doing despite his constant

reminder. Given that her husband is a

workaholic, they have an arrangement

that they should meet outside their house

for any matters that sound even slightly

official; and Mary, according to Mutinda,

has erroneously classified the business plan

discussion as one of them. The forty-seven

year old mother of two is not convinced

that having a written plan can make her

work better. Mutinda however persists as

he views, the obligation to educate her

with special lessons he has learned during

his long time in business as part of his


Come to think of it, do we really need

to have a written plan? It seems okay

doesn’t it; just to know what we want out

of life and get on with it. Why should you

have a written business/life plan? What is

it exactly? A life plan is a formal, written

plan you can use to plan out areas of your

life including career, where you live, who

you associate with, and how you spend

your time. Writing out a life plan can help

you identify areas of your life that you

would like to change or to meet certain

goals. A life plan may help you see your life

in a different way. Seeing aspects of it on

paper may help you prioritize and readjust

your ideas. Putting a life plan down on

paper may also help you see similar goals

and desires you have, or adjust your plan

based on things that don’t fit. (Wiki)

Writing about the power of

a written plan, Dan Mcarthy -

(Greatleadershipbydan); says he has

always been a strong proponent of the

importance of having a written individual

development plan (IDP) for Leadership

development. This is, identifying: What

you want to get at; how you are going to

do it; when you are going to do it. He says

he has one, makes sure his employees have

one, and tries to encourage all employees to

have one, not just managers. The idea notes

Mcarthy, is often met with resistance, and

when he conducts workshops on how to

develop as a leader, when he is coaching a

leader, he usually gets pretty buy-in until

they get to the point where it’s time to

put it in writing; which is the moment

of truth; time to make a commitment.

For some, picking up that pen is met with

staunch resistance.

Mcarthy gives the example of an

article derived from the Harvard Business

School goal story. It is a story he read that

convinced him of the power of having

written goals. He uses it sometimes to

try to get people out of this obstacle- he

reports; in the book What They Don’t

Teach You in the Harvard Business School,

Mark McCormak tells a study conducted

on students in the 1979 Harvard MBA

Program. In that year, the students

were asked, ‘have you set clear, written

goals for your future and made plans to

accomplish them?” Only three percent of

the graduates had written goals and plans;

13 percent had goals, but they were not in

writing; and a whopping 84 percent had

no specific goals at all.

Ten years later, the members of the

class were interviewed again, and the



Businesses without a

plan can easily get offtarget,

and revenues

will suffer as a result.

Creating a plan with

expense projections,

revenue forecasts,

and more can help a

small business remain

committed to its longterm


findings, while somewhat predictable, were

nonetheless astonishing. The 13 percent of

the class who had goals were earning, on

average, twice as much as the 84 percent.

Who had no goals at all. What about the

three percent who had clear, written goals?

They were earning, on average, ten times

as much as the 97 percent put together.

He notes that while this story is about

financial goals, the same concept applies

to leadership development goals. You can

sit back and float through life hoping

you’ll get better as a leader. And if you are

lucky, you will. Development will come to

us. But why not increase your chances to

success ten times simply by putting your

development goals in writing? It’s the best

investment you will ever make concludes

Mcarthy. . - Dan Mcarthy is the owner of

Great Leadership, LLC and the Director

of Executive Development Programs at

the University of New Hampshire. He is

the author of the award winning leadership

development blog ‘Great Leadership and

an influential voice in social media.

Andrew Schrage, of more Money Crashers

Personal Finance whose mission is to

develop a community of people who try

to make financially sound decisions. (The

website strives to educate individuals in

making wise choices about credit and debt,

investing, education, real estate, insurance,

spending) says the biggest reason to

write out a business plan regardless of

any financing option concerns is that it

can help you stay organized and remain

on track. Businesses without a plan can

easily get off-target, and revenues will

suffer as a result. Creating a plan with

expense projections, revenue forecasts, and

more can help a small business remain

committed to its long-term goals.”

Following are The 11 Indispensable

Principles of Money Crashers

• Always spend less than you make.

• Do not believe in money myths.

• Get out of debt and stay out of debt.

• Save money for the unexpected.

• Student loans are not the only answer.

Be resourceful and open-minded.

• Find creative ways to boost your


• Invest for the long-term and keep it


• Educate yourself about real estate, cars,

and financial products.

• Avoid scams and financial predators.

• If you have a spouse or partner, treat

this person as a teammate!

• If you achieve financial success, give

back. It helps others and feels great.

Creating a purpose for your life and

following it through is a big march into a

great future. Discussing how to plan your

life, Wiki says; you can decide what you

want, find out what’s important to you,

and create a plan to follow so you make

the most of your life. The most important

thing here, they suggest is that you clarify

your vision. This can be an overwhelming

task, but it simplifies matters for you when

you write it down. You need to look at all

areas of what is fulfilling and meaningful to

you. Some questions to start you thinking

about which direction you want your life

to go include: What does success look like

to you? Is it a certain job title, or amount

of money? Is it being creative? Is it having

a family? What would your life look like

if you had the power to change it right

now? Where would you live? What would

your career be? How would you spend

your time? Who would you spend your

time with? Whose life do you admire?

What course of their lives makes it

appealing to you?

You should construct

a guiding vision

statement; and once you have explored

what is meaningful to you through

questioning and self-reflection, write

down the answers you came up with in a

sentence you can use as a guiding vision

statement. Write it in the present tense,

as if you’ve already accomplished it. Your

plan may not go in a straight line, it is

full of twists, move slowly and learn from

those experiences as you move closer to

your goal. You may run into dead ends in

your life. You may end up with a job you

think will put you in a better place, but it

leads nowhere. You may get sidetracked by

relationships and family. Just remember

there is no timetable. Keep making small

progress towards your goals and learn from

every dead end and new development in

your life.

You should be prepared to create your

own opportunities: There may not be the

perfect job, place, or opportunity already

out there. If this is the case, you’ll need to

create that opportunity for yourself, even if

doing so wasn’t a part of your original plan.

Understanding as you plan your life that

you may have to make your goals happen

can help mentally prepare you for any

changes down the road.

In order to thrive in any facet of your

life, you have to plan and write out your

objectives. By doing this, you will boost

your personal growth which in turn will

make you flexible and creative. It will

reduce your stress level and enable you to

have a road map which you can follow for

your success. That is why to do lists are

written even on a daily basis.

Writing a plan is a useful tool many

successful people use to boost their chances

of success. By doing this, you become

focused, motivated, organized and

victorious. Veteran businessmen

like Mutinda, know why it

is important for his wife,

employees and anyone who

seriously wants to succeed

in life should apply this

simple principle. It is

the secret to success.





By Angela Mutiso,

ACEO of a thriving

organization could not

work out why every time he

stepped into the bookstore

in their premises, he would

sneeze non-stop a number of times before

catching his breath again. He soon found

out that he was allergic to something in

the area and immediately took necessary

steps to establish and eliminate the cause.

It did not take long before the head of

the company was informed that there

were dust mites in the room. Allergies can

make you quite miserable; especially if you

do not know where they are, what causes

them and how to keep them at bay.

An allergy is the response of the body’s

immune system to normally harmless

substances such as pollens foods, and house

dust mite. While in most people these

substances (allergens) pose no problem, in

allergic individuals their immune system

identifies them as a ‘threat’ and produces

an inappropriate response. - AllergyUK.


Everyday health explains that avoiding

allergies may be easier than you knew;

whether you have indoor allergies to dust

and mold or hay fever caused by pollen,

allergy symptoms can be equally miserable

all year long. It points out that coughing,

sneezing, itchy eyes, and a runny nose can

make any day a challenge. An estimated

40 million Americans have indoor and

outdoor allergies. Although there is no cure

for most allergies, the situation is far from

hopeless. “In addition to treatment, the

best way to fight allergies is to learn ways

to avoid them,” says Sandra Hong, MD, an

associate staff member in the department

of pulmonary, allergy, and critical care

medicine at the Cleveland Clinic in Ohio.

Here are 10 simple tips from everyday

health that can help - excerpts;

• One of the biggest causes of indoor

allergies is the dust mite. These microscopic

insects love to live on your bedding and

stuffed animals. Hong advises washing all

of your bedding in hot water and drying it

in a hot dryer to kill dust mites.

• An estimated 35 million Americans

experience hay fever caused by wind-borne

pollen or mold spores. Wearing sunglasses

outside can reduce the amount of pollen

or spores that get into your eyes. Allergyirritated

eyes are also more sensitive to

sunlight, so stylish shades may help your

eyes feel better, too.

• “Indoor houseplants that flower aren’t

likely to cause a pollen allergy, because

most flowering plants are pollinated by

insects,” Hong explains. “But indoor plant

soil can let plenty of mold spores into your

house.” If you have hay fever or a mold

allergy, keep houseplants to a minimum

and definitely keep them out of your


• Hay fever is also known as seasonal

allergic rhinitis, because pollens tend to

be worse in specific seasons when trees,

grasses, and weeds pollinate. If you can

identify your trigger season, you may be

able to avoid the worst pollen exposure by

getting out of town for at least part of it.

• Mold thrives in moisture. To help

control indoor mold, use a dehumidifier

or your air conditioner to keep your home

humidity close to 50 percent. If you take

a road trip when the pollen count is high,

make sure to keep your car windows closed.

• If you can, travel early in the morning

or in the evening. Windows, curtains,

and blinds are the preferred hiding places

for dust and mold. These indoor allergy

culprits can also set up shop in poorly

ventilated laundry rooms, basements,

refrigerator drain pans, and old books. If

you have an allergy to cleaning products

in addition to the mold and dust, wear a

mask, and get out of the house for a few

hours afterward to let the air clear.

• Take some simple precautions to keep

outdoor pollens out of your home. Wear a

mask if you work outside, and remove your

work clothes before entering the house.

It’s also good to shower right after coming

in from yard work. When you do laundry,

use a dryer instead of hanging your clothes

outside. Leave all windows in the house

closed during allergy season, and rely on

your air conditioner or dehumidifier to

help protect you from indoor allergies.

• If you have outdoor or indoor allergies,

any substance that irritates your airways

can make your symptoms worse. Do not

smoke in your home, kindly ask house

guests to smoke outside, and avoid wood

fires and wood-burning stoves. Strong



odors can also set off an allergy attack.

• Studies have shown that cockroaches

are a surprisingly common cause of indoor

allergy symptoms and asthma, especially

in children. Remove water and food

sources that may attract cockroaches, and

if you see a cockroach, get professional

help. “That goes for rodents, too,” says


• If you or someone in your family is

struggling with indoor allergies or hay

fever, talk to your doctor.

Meanwhile, Kimberly Snyder says

in her blog on allergy vs. Intolerance

that according to the Mayo Clinic,

approximately 6 to 8 percent of kids under

age 5 and about 3 to 4 percent of adults

suffer from true food allergies. If this

number seems low given the number of

people you know that suffer after eating

certain foods, then you may be making a

common misidentification. While only

a small percentage of the population has

actual food allergies (which can be life

threatening), many, many others suffer

from food intolerances. Symptoms of food

intolerance include: headaches (including

migraine) Irritability, mood swings, or

nervousness, digestive upset, heartburn,

depression, Inflammation, mucus and

respiratory problems. Other symptoms

are autoimmune disease, muscle and joint

aches, difficulty sleeping, exhaustion and

lack of energy. In addition, there is weight

gain or difficulty losing weight, skin

disorders, heart palpitation or arrhythmia.

Dairy products, eggs, tree nuts, wheat and

shell fish and some types of fish are also

know to belong to the food groups that

cause at least 90 percent of all true food


What to Do

Try as best you can to avoid most of these

foods, Kimberly Snyder asks: Do you

suspect you have food sensitivities? The

good news is that you can grow healthier

by eating a nutritious diet, cleansing, and

noting your body’s reaction to certain

foods. She says briefly that you can

beat food sensitivities if you eliminate

processed foods. Instead, focus on a natural

plant-based diet consisting of organic

fruits and vegetables, as well as whole,

non-gluten grains. Drop the dairy. She

points out rather interestingly in her blog

that humans were meant to ingest breast

milk, not cow’s milk, and only for the first

year or two of life. After that, dairy has

no place in a human diet. Calcium can be

found in other foods. Furthermore, foods

such as dairy which have an acid-forming

affect actually encourage the leaching of

calcium from the body via urinary calcium

excretion. (Read more on this in The China

Study). Also Avoid gluten grains. Instead,

eat grains like quinoa, millet, oat groats,

and buckwheat. Avoid vinegars, except

for raw apple cider vinegar. Avoid animal

proteins. If you do eat animal proteins, opt

for minimally processed, local, grass-fed,

organically farmed animal products raised

without antibiotics or hormones.

Top Allergy Kit Must-Haves

Shut out breezes. Keeping indoor air free

of your allergy triggers can help ease nasal

symptoms; consider alternative therapies;

wash away allergens; wear a mask; eat a

healthy diet; use a nasal rinse. ; drink more

fluids; learn how to clean safely (webmed).

One is advised to see a doctor when

they are dealing with an illness, however says the following

drugs may be useful in dealing with

allergies: - allergy shots, antihistamines

(pills, eye drops, and nasal sprays),

cromolyn, leukotriene blockers, and nasal

steroid sprays. Hey focus here on secondgeneration

antihistamine pills and nasal

sprays, such as Allegra, Clarinex, Claritin,

Xyzal, and Zyrtec. But, nasal steroid sprays

such as fluticasone propionate (Flonase),

mometasone furoate (Nasonex), and

triamcinolone acetonide (Nasacort) are

considered by experts the best, first option

for seasonal allergies. Both flonase and

Nasacort are recently available without a

prescription. One downside is that it can

take hours or even days before they start to

work. And the steroid sprays must be used

consistently to get the greatest benefit.

Because of that, some allergy sufferers may

choose instead to take one of the secondgeneration

antihistamine medications.


So, it is necessary for you, as an allergy

sufferer to take control over the food you

eat. Either make a list or track of the foods

you are allergic to and make sure you do

not include them in your diet. Consume

foods that you have no trouble with and

let them be as natural as possible. As often

as possible, cook your own food and when

you go to restaurants, ensure that the

ingredients included in the food you are

going to eat, agree with your system. In

addition, carry your own home made food

to work so you do not have to go through

the stress of eating food that your body

cannot take. Ensure your surroundings

especially places you spend a lot of time

in like your house and office are dust free

and are cleaned regularly. This way you will

be able to have peace and fewer allergy


Health Tips

The wonders of water melon

This magical fruit/vegetable

can aid in Kidney disorders,

inflammation, bone health, nerves,

blood pressure reduction, scurvies,

wounds, macular degeneration,

heart health, cell damage, erectile

dysfunction and heat stroke. It

also aids in hair loss, weight loss

and digestion among many more.

• Frosty cold – sweet water melon

pieces are popular throughout the


• Watermelons are mostly water

— about 92 percent — but this

refreshing fruit is loaded with

nutrients. Each luscious bite has

considerable levels of vitamins

A, B6 and C, lots of lycopene,

antioxidants and amino acids.

• Watermelon can help combat

the formation of free radicals

known to cause cancer.

• Watermelon Juice May Relieve

Muscle Soreness

• You Can Eat Watermelon Rind

and Seeds; Not only does the

rind contain plenty of healthpromoting

and blood-building

chlorophyll, but the rind actually

contains more of the amino acid

citrulline than the pink flesh

• Watermelon Extract May

Significantly Reduce Blood


• Watermelon for Inflammation,

Sexual Health, and More;

L-arginine may also help with

erectile dysfunction by helping

to relax your blood vessels,

including those supplying blood to

your vital organ – and that’s why

watermelon is sometimes referred

to as “Nature’s Viagra.” (Additional

tips by mercola and well-being






By Staff writer,

Projects that cut energy

costs should be compared on

a rational basis with other

investment opportunities

Any organization needs good management

for long-term success and efficient

operation, and energy management is no

different. However, the management of

energy is often neglected, even though there

is considerable potential to save energy

and reduce costs. At the same time, there

is increasing pressure from rising energy

prices, climate change legislation and the

need to be seen to be environmentally

responsible by customers and stakeholders.

Saving energy makes business sense,

and having a structured, co-ordinated

and integrated approach maximizes

these benefits. Without good energy

management, cost-effective opportunities

can be easily overlooked. Like all

management disciplines, energy

management should be applied in a manner

appropriate to the nature and scale of the

organization. Energy management for a

small office-based organization will be

at a very different level from that for a

complex industrial company with a multimillion

pound energy bill. Nevertheless, the

fundamental principles are much the same.



Energy management is the systematic

use of management and technology to

improve the energy performance of an

organization. To be fully effective it needs

to be integrated, proactive and incorporate

energy procurement, energy efficiency

and renewable energy. Putting an energy

management system in place takes time

and it will continue to develop as energy

performance improves and attention

moves to different issues. The points below

illustrate the main elements of energy

management and the different stages of


It is important to determine:-

The current position

• Management Review

• Action Plan

• Energy Policy

• Senior Management Commitment

• Energy Strategy

• Initial Review

• Organizing Compliance Investment

Procurement Energy information

Opportunities identification

Organizational culture Communications.

Energy management system

An energy management system refers

to a documented procedural system.

Organizations can have their energy

management system certified to a

recognized standard, of which the

main example is ISO 50001 Energy

Management Systems. The structure is

similar to the ISO 14001 Environmental

Management Standard in providing a

framework and enabling a systematic

approach for continuous improvement

of an organization’s energy efficiency and

sustainable use. However, where with

health and safety there are legal obligations

on all employees, energy efficient behavior

is more appropriately driven through

developing an energy efficient culture.

Organizing energy


Led by the Energy Manager, the energy

management team has responsibility for

the day-to-day delivery of the energy

policy through the implementation of the

energy strategy. There is no ideal model

for an energy management team –the

structure will depend upon how your

organization works. Where the members

of the team have other duties what is

important is that they have sufficient

time, expertise and resources to perform

their energy management responsibilities


Formal responsibility for energy

management should not reside exclusively

with the energy management team as

there are specific responsibilities that

should be assigned to those whose support

is necessary for delivering effective energy

management. This might include:

The Chief Executive and other senior


• Other key managers and their

departments, such as:

> production or service delivery

> asset management/property

• Facilities

• Estates

• Maintenance

• Capital Projects

> Finance

> Procurement

> IT

> Human Resources

> Security, Cleaners and Caretakers.

Much like health and safety, everyone in

the organization should be responsible for

their own actions with respect to energy


Detailed interval energy consumption

data makes it possible to see patterns of

energy waste that it would otherwise be

impossible to see. For example, there’s

simply no way that weekly or monthly

meter readings can show you how much

energy you’re using at different times of

the day, or on different days of the week.

And seeing these patterns makes it much

easier to find the routine waste in your

building. However, where with health

and safety there are legal obligations on

all employees, energy efficient behavior

is more appropriately driven through

developing an energy efficient culture.

Regulatory compliance and


All organizations need to understand

which regulations apply to them and

what they need to do to comply. The main

regulatory schemes are:

• Building Regulations and Energy

Certificates (EPCs and DECs).

The Climate Change Levy (CCL) and

Climate Change Agreements (CCAs).

(CCAs are voluntary, but put

requirements on those that participate).

The EU Emissions Trading System


• Fluorinated Gas (F-gas) Regulations.

Effective energy management provides the

basis for efficient regulatory compliance

and allows organizations to take advantage

of incentive schemes such as Enhanced

Capital Allowances and Feed-in Tariffs.


Most organizations will need investment

to take full advantage of cost-effective

energy efficiency opportunities. Projects

that cut energy costs should be compared

on a rational basis with other investment

opportunities. It is common for energy

efficiency projects to lose out to other

demands on funds perceived to be of

greater importance.

Good investment practice can

be characterized by:

• A ring-fenced budget for energy

efficiency/sustainable energy under the

control of the Energy Manager. This

avoids the danger of funds being diverted.

• Retention of a proportion of energy

savings by the function to which they

relate. This provides an incentive and

reward for pursuing energy efficiency.

• Appraisal on a whole lifecycle basis when

comparing energy efficiency investment

with competing demands on capital.

• Presenting senior managers with clear and

thorough business cases for investment.


There are two areas of procurement

critical to an effective energy management

strategy: one is the procurement of energy

itself; the other is procuring energy-using

equipment, services and buildings.

Energy procurement

It is important to recognize that, although

they are necessary, activities related to

energy procurement should represent only

a small part of energy management. The

energy management function should focus

on the reduction of energy demand rather

than the procurement and administration.

For example, a finance department is

often responsible for buying energy, but

not for managing it, so it’s important

that they have access to the relevant

information in order to make decisions

about procurement. They can only save

money if they understand the markets and

know how your organization uses and will

use energy.

Procurement of equipment

and services

The energy performance of an organization

is influenced by the equipment and services



it uses. Best practice requires that the

energy performance of such items is taken

into account when procurement decisions

are being made. This will normally involve

formal input from the energy management


Procurement of buildings

Procuring buildings, whether through

a lease or purchase, can be a key factor

in an organization’s long-term energy

performance. As a matter of policy it would

be appropriate to only lease, purchase or

commission new buildings that meet the

highest of energy efficiency standards. In

the longer-term this will be a far more

cost-effective way of reducing carbon

emissions than improving existing stock.

Metering, monitoring and


Energy metering, monitoring and targeting

(MM&T) is the management information

system that supports energy management.

Also known as just monitoring and

targeting (M&T), it is central to good

energy management. Simply, you cannot

manage what you don’t measure and what

is not measured is not managed.

Effective MM&T enables you to reduce

costs through understanding your

organization’s energy consumption and

identifying waste and targeting inefficiency.

The stages of MM&T are:

• Collection of data on energy and on

influencing factors such as weather

conditions or production volumes

• Analysis to convert data to information

• Communication to convert information

to knowledge

• Actions to improve efficiency and

eliminate waste.

The MM &T Process Model

Communication (Information to


Data Analysis (Data to Information)

Action (Knowledge to Results)

Data Collection

This is a continuous process, and once

established should not be overly complex

or time consuming. MM&T allows you to:

• Detect avoidable energy waste that might

otherwise remain hidden

• Quantify savings achieved by energy

projects and campaigns

• Identify fruitful lines of investigation for

energy surveys

• Provide feedback for staff awareness,

improve budget setting and undertake


• Calculate energy and carbon reduction

targets rationally to reflect achievable

performance – often, targets are set without

consideration of practical application or


MM&T also supports energy invoice

checking and tariff negotiation. Sometimes

the term is inaccurately used to just mean

bill validation.

Initial review

The initial review should provide sufficient

information for you to make a case to

senior management to take an energy

management strategy forward.

Your initial review should give you an

understanding of:

• Your organization’s energy use and costs.

• Factors affecting energy use, such as

weather conditions or production rates.

• Key issues, such as regulatory obligations

or planned organizational changes.

• Where your organization stands in

relation to its aims for energy management.

There are resources that can assist you

with your review including:

• Downloadable energy analyzer tool to

manage your data

• Metering, Monitoring & Targeting web

pages with links to further guidance

• Climate change legislation pages with

links to government websites

• Downloadable energy management selfassessment


• Energy surveys guide (CTG055)

The initial review should provide sufficient

information for you to make a case to

senior management to take an energy

management strategy forward.

Energy policy

You will need an energy policy and

strategy. At its simplest, an energy policy

is a written statement of a commitment to

managing energy and carbon emissions.

An energy policy should normally include:

• Endorsement from senior management

– preferably the Chief Executive or


The organization’s energy/carbon vision

and aspirations, with specific objectives

and targets.

• A commitment to ensuring the

integration of energy management in all

relevant decision making.

• A commitment to ensure that sufficient

resources are in place to meet policy


Energy strategy

An energy strategy is a document setting

out an action plan of how energy will be

managed in the organization to meet the

policy objectives.


It is clear from this information that

it is important to prioritize energy

management and that energy efficiency

projects should never lose out to other

demands on funds perceived to be of

greater importance. Successful energy

management is an investment that makes

business sense.





• Eleven storey office tower.

• Basement parking facilities.

• Adequate washrooms with a povision for

executive washrooms & superbly fitted kitchen

facilities on each floor.

• High-speed service lifts.

• Spacious lift/staircase lobbies.

• Office suites available in flexible sizes.

• Generous floor heights allowing for suspended

ceilings, facilitating the installation of air conditioning if required

Available for letting:




Please contact Lloyd Masika Property Agents and Valuers

Tel: 0722 481 504, 0733 597 050


Nobel Prize Winners 2016 are; -

Yoshinori Oshumi- Physiology of

Medicine; Oliver Hart- Economic

Sciences; Fraser Stoddart – Chemistry;

Jean-Pierre Sauvage – Chemistry; Bob

Dylan – Literature; Bengt Holmstrom -

Economic Sciences; Juan Manual Santos-

Peace Prize. Detailed information on the

Nobel Prize winners can be found in the

web; however you can savor a few below;

Jean-Pierre Sauvage is a French

coordination chemist working at

Strasbourg University. He has specialized

in supramolecular chemistry for which he

has been awarded the 2016 Nobel Prize in


Ben Feringa – Chemistry: Prof. Ben

I. Feringa obtained his PhD at the

University of Gronigen; where he was

appointed full professor in 1988 - after

working as research scientist for Shell.

Under his guidance the Feringa group has

developed extensive expertise in the fields

of organic chemistry, nanotechnology,

asymmetric catalysis. His discovery of the

molecular motor ranks highly among the

many discoveries made over the years.

Bob Dylan is an American song writer,

singer, artist and writer.

Meanwhile reports that three

physicists — David Thouless of the

University of Washington, Duncan

Haldane of Princeton University, and

Michael Kosterlitz of Brown University

— won the Nobel award for physics for

showing that topology can apply to atoms

and other tiny matter within the quantum

universe. By mapping out this quantum

topology, their work has led to many

modern materials and may bring society

closer to the age of quantum computers.

“Today’s technologies, take for instance

our computers, rely on our ability to

understand and control the properties

of the materials involved,” said Nils

Mårtensson, acting chairman of the Nobel

committee. “This year’s Nobel laureates, in

their theoretical work, have discovered a

set of totally unexpected regularities in the

behavior of matter. This has paved the way

in designing new materials.”

Could African Agriculture

Leapfrog Harmful Pesticides by

Using Plant Microbiomes?

In Africa, where there is an overwhelming need to

improve soil health and crop productivity, mocribial

science in agriculture is just getting started.

Researchers believe there is a revolution in finding

alternatives to pesticides and artificial fertilizers that

can improve African farm productivity. Scientists are

investigating the plant microbiome – the billions of

bacteria living in roots, leaves and soil that help plants

absorb minerals and nutrients, fight disease, and resist

drought and heat. Like the human microbiome —

the bacteria and fungi in the gut that help us digest

food and fight infection — the plant microbiome

could be key to generating more food without the side

effects like pollution, environmental degradation and

toxic residues from chemical pesticides, Fast Coexist


Source: AFK



Lucky Zuma

South Africa’s President Jacob Zuma

survived a no confidence vote in

parliament in November when the

ruling ANC parliamentarians decided

not to vote him out. He was being

investigated after new revelations of

corruption led to a fresh probe. He is

facing criticism from his own ANC

party as well. 214 law makers were

against the motion (to remove him)

while 126 were in favor of his removal.

Pippa Middleton sets

a date for her wedding

to James Matthews in


The 33-year-old socialite is sending

‘Save The Date’ invites as wedding

preparations get underway. Pippa

Middleton and fiancé James Matthews

have reportedly set a date for their

wedding. The couple, who announced

their engagement in July, are already

making plans for their big day. The

33-year-old bride-to-be, who has her

sights set on a wedding in 2017, has

had ‘Save The Date’ invitations made,

which will be delivered along with

their Christmas cards to friends and

family. Pippa has also been having

fittings for her wedding dress and will

reportedly wear a £10,000 designer

gown as she walks down the aisle, Mail

Onliner reports. She famously made

global headlines as a bridesmaid at the

wedding of her sister the Duchess of

Cambridge to Prince William, courtesy

of a figure-hugging dress.

US election 2016

After the surprise win of Donald J.

Trump in the US November elections,

the President elect appeared in “60

minutes” where he was asked whether

he would seek to deport millions and

millions of undocumented immigrants,”

Mr. Trump said his priority would be to

remove “people that are criminal and have

criminal records.” In many cases, convicts

would have to go through immigration

courts before they could be deported.

Those courts are overwhelmed with huge

backlogs, so obtaining deportation orders

from judges can take many months — if

not many years. Thousands of immigrants

are serving jail sentences that under

current law cannot be curtailed. According

to official figures, as of June only about

183,000 immigrants had been convicted

of crimes and also had deportation

orders so they could be detained and

removed quickly. Mr. Trump’s approach

would in some ways be a continuation of

policies Mr. Obama has pursued to focus

immigration enforcement on convicted


Who is Donald J. Trump?

Donald John Trump is an American

businessman, reality television personality,

politician, and President-elect of the

United States. Was born on June 14, 1946

(age 70) at Queens, New York City, New

York, United States his height is

6’ 3”

Net worth: 3.7 billion USD (2016) Forbes

Spouse: Melania Trump (m. 2005), Marla

Maples (m. 1993–1999), Ivana Trump (m.


Children: Ivanka Trump, Tiffany Trump,

Barron Trump, Eric Trump, Donald

Trump Jr.

Education: Wharton School of the

University of Pennsylvania (1968),


The future of AGOA

with Trans-Pacific

Partnership Rising

The number of regional trade

agreements has almost quadrupled

in the past 25 years, from 70 in 1990

to around nearly 280 today. The

collapse of the Doha round of trade

talks in Nairobi in December has

deflected energy to regional trade

agreements. These agreements are

great in helping rejuvenate global

trade, which slowed as the economic

recovery tapered in recent years and

the Chinese economy decelerated.

Africa is well positioned to engage

regional trade agreements. Signed

in Sharm-el-Sheikh, Egypt, in June

2015, the Tripartite Free Trade

Agreement (TFTA) brings the

Common Market of Eastern and

South Africa (COMESA), the East

African Community (EAC) and

the Southern Africa Development

Community (SADC) into the

continent’s largest free-trade zone

covering 26 countries from Egypt to

South Africa. The agreement aims to

fuel the continued growth of intraregional

trade on the continent,

which has skyrocketed from $2.3

billion in 1994 to $36 billion in

2014. Intra-Africa regional trade

still accounts for just 25 percent of

total exports for the sub-Saharan

region at 70 percent and 50 percent

respectively. Sub-Saharan Africa still

has a distance to go.

Source: AFK Insider



Reviewed by Angela Mutiso,

Title: Make your knowledge sell

Author: Ken Evoy, MD and Monique Harris

Category: Personal Development

Publisher: Site Build it

Make Your Knowledge

Sell (MYKS!) is an E

book that has got quite

a number of positive

reviews. Those who have

read it, very quickly admit that it has

changed their lives. I will share with you

some of the reviews of this amazing book;

Make Your Knowledge Sell shows you

how to find “the info-product within,”

how to create and publish it, and how to

market and sell it. You’ve learned so much,

so gradually, you don’t realize how much

you know! It’s a lifetime of information

that people will pay for. Get started writing

now! There’s a book in everyone. Each

of us lives a life of unique circumstances

and experiences that results in building a

body of knowledge... knowledge that has

value and that can be packaged and sold to


MYKS covers far more than finding

your subject. It’s the entry point to a

true info-publishing business. This book

supports you with a step-by-step approach

to publishing. People want to learn about

what you already know. MYKS empowers

you to win on the Web by using the single

best opportunity you have... the knowledge

stored in your very own brain. So you see,

you can write a profitable E-book and that

is because as the authors say: There’s an

e-book in everyone. And yours is based on

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You know stuff other people don’t...

things people would pay to know. So you’re

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• How to pull it out of your brain

• How to publish it

• How to sell it on the Net

Evoy says, “Make Your Knowledge Sell!” is

the title of the book that Monique Harris

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info-product, yourself.

Evoy notes that his co-author Monique

Harris started out pretty much like you.

She didn’t use rocket science to achieve her

tremendous e-publishing success. In fact,

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says now she’s joined forces with him to

publish this fantastic guide that enables

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really “ordinary,” right?)

MYKS shows you clearly how to create

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shows how to build traffic that will buy

from you on the Net. It’s all here. So, to

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your ultimate insider’s guide to the best spots

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What problems have you faced, or what

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Still looking for your own example for

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Make your knowledge sell is a Free EBook

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This informative e

book used to be paid for but is free now.



“His wife Graca called me with the

words your friend has left us.”

These were the words of the late

Harvard educated professor of

economics Washington Jalang’o

Okumu the man credited with

saving South Africa’s independence

elections from collapse to a journalist.

He says so close was Okumu to

Nelson Mandela that he was the

second person the family called

upon Mandela’s death. The professor

died at his home in Nyang’oma East

village, Bondo sub-county, Siaya

County recently.

“To put it plainly, we can choose

Jacob Zuma or we can choose South


Leader of the Democratic Alliance

(DA) opposition party, Mumusi

Maimane ;appealing to ANC

members to vote against their leader.

Jacob Zuma after fresh allegations on

corruption was brought.

“No matter what people say about

me, I am not moved…I don’t listen

to anybody because I know what

is important…it is between me

and God….You want to listen to

everybody and satisfy everybody,

you will end up satisfying the evil

people. Do what is right. Make sure

you satisfy the Almighty Allah.

Zambia’s leader Yahya Jammeh

51; after submitting his candidacy

to seek a fifth term in his country’s

presidential elections; He took over

power in a bloodless coup in 1994

The suspect is presently at large

but in future the locals must exercise

a lot of caution to ensure they buy

meat from licensed outlets to avoid

catching diseases.”

Murang’a County Chief Officer

Joseph Mbai; speaking after twelve

people were admitted to Murang’a

after eating meat from a cow

suffering from anthrax; A number

of people were rushed to hospital

after they developed anthrax related


“Now that he has secured victory,

Trump should move from headlinegrabbing

rhetoric of hatred and

govern with respect for all who live in

the United States. He found a path to

the White House through a campaign

marked by misogyny, racism and

xenophobia, but that’s not a route to

successful governance. “

Kenneth Roth; Executive Director

of Human Rights watch, in their

congratulatory message to presidentelect

Donald Trump; he urged him

not to bring to pass some of his

campaign ideas.

“We choose to believe in a hopeful,

inclusive, big hearted America.”

Democrat Presidential candidate

Hillary Clinton; she said this as she

wound up the campaign in which

she lost to Donald J. Trump. Polls

had earlier predicted her win, as the

world waited with bated breath for

the results which favored Trump in the


“A Trump win would catch the

markets as off-guard as Brexit.”

Analyst Aly Khan Satchu; he made this

comment on his market report in the

Star, as the world awaited the results

of 2016 US elections. This election

has been quoted as being one of the

most bitter campaigns in memory.

“We looked at whether this antibiotic

can be used to destroy diseasecausing

bacteria which are resistant

to commonly used drugs….We began

six years ago, and we have seen that

it works by destroying the bacteria

that cause skin infection and mastitis

in cows….Over 50 percent of skin

infections in the country are caused

by methicilin-resistant staphlycoccus

aureus bacteria. Murcamacin

destroys this superbug and works

eight times better than the common


Ryan Awori, 27; Revealing his

innovation at an international science

conference in Berlin Germany. His

drug Mursamacin is said to have

been derived from roundworms in

soils found in central Kenya. The

worms apparently release beneficial

bacteria which produce antibiotics

that destroy rot-causing organisms.

Source- Daily Nation

The past week has seen a line

crossed….His (Prince Harry)

girlfriend, Meghan Markle, has been

subject to a wave of abuse and

harassment…Prince Harry is worried

about Ms Markle’s safety and is

deeply disappointed that he has not

been able to protect her. It is not right

that a few months into a relationship

with him that Ms Markle should be

subjected to such a storm. He knows

commentators will say this is ‘the

price she has to pay’ and that ‘this

is all part of the game.’ He strongly

disagrees. This is not a game – it is

her life and his.”

Prince Harry’s communications

secretary Meghn Markle, explaining

that Britain’s Prince Harry has

blasted the racist wave of abuse and

harassment directed towards Meghan

Markle, his girlfriend. Her mother is

black and her father is white.

“While advances in technology will

present significant opportunities and

revolutionize aspects of our everyday

lives, it will also present significant

challenges to police…Driverless

vehicles could be exploited by

criminals, including terrorists, to be

pre-programmed to carry out criminal


Ramzi Jabbour; Deputy Commissioner

of the Australian Federal Pokice (AFP)

“Never blame anyone in your life.

Good people give you happiness.

Bad people give you experience.

Worst people give you a lesson.

Best people give you memories.” Zig


“A leader can shape his followers

best by showing them the way

forward rather than telling them

about it.” -Unknown


Interviewed by Angela Mutiso,

has increased and there is plenty to

draw from. His tenacity has moved

him up many ranks, and he is glad

to report that his time at Sony Sugar

Company Ltd continues to be a fine

learning experience. CPA Onyango

has combined the experience he has

gained, with a natural curiosity, and

a comprehensive knowledge of the

organization that gave him his first

job to make his department efficient

and up to date. He is however quick

to point out that the success of

the Finance department and the

Company at large, stem from a joint

and sustained effort by all members

of staff and good leadership coming

from the Management Committee led

by the Managing Director.



CPA George Omondi Onyango

a Senior Accountant in charge

of Management Information

and Budgeting (SAMIB) at Sony Sugar

Company Ltd took on an accounts

clerk job at Sony Sugar Company Ltd

a month to his graduation. However

one thing the young accountant did

not envisage at that time was how

central his services would be to his

employer and profession or how far

and rapidly he would rise.

He looks back at the events of his

intricate life; His father died when he

was fairly young; his mother widowed

early, soldiered on with commendable

courage to bring him and his siblings

this far. He believed then that this

accounting job he had desired for a

long time, if well grasped would give

him a healthy work-life balance and

concluded that the icing on the cake

would be to embrace the pleasure

and adventure of the profession.

Besides, he hoped to put to good use,

the opportunity he had been given

to show his loyalty and add value to

a distinguished Company that had

given him an occupation at a critical

time. Appreciatively, the going has so

far been good as is attested by this


On the most interesting and perhaps

most vital level; CPA Onyango in

his early thirties, has discovered a

new sense of enchantment in the

direction the accountancy profession

has taken and relishes the status

and responsibilities that come with

it today. Quite apart from raising the

scope of accountants’ expertise, the

utilization of professional services,

He has superb working knowledge

in an integrated computerized

accounting and operational

system. He is in addition, a Quality

Management Systems Lead auditor

(KEBS), Operating Performance Index

champion (KIM) and soon pursuing

his PHD at the University of Nairobi.

CPA Onyango says his aspiration is

to hold and manage a strong and

responsible position in finance and

accountancy in an integral institution

where there is transparency and

accountability and where peoplemanagement

skills are nurtured,

developed and completely utilized.

Following is a summary of his

education, his work and his life;

At Sony Sugar, he has worked in

several positions, his jobs have

encompassed; Preparation of

various reports and also directing,

supervising, appraising and training

personnel in the department to ensure

smooth and efficient performance

of work as a cost accountant and

Nucleus Estate Accountant among


He has attended several workshops

and seminars, notably; Financial

Accounting (Delloite & Touche);

Change Management; (Visionary

Leadership and consultants);



Organizational Performance Index

Champion (KIM); Internal Quality

Auditing and Information security

and systems management (KEBS);

Tax Seminar on PAYE, WHT and

VAT (PWC) Emerging Trends in IT

and Ethical Accounting – A dream

or reality (Strathmore University)

and FiRe awards evaluation process

(Matengo Githae).

Academic and Professional


Masters in Business


- University of Nairobi

Bachelor of Commerce

- University of Nairobi

Certified Public Accountant

- Strathmore University

MS Office suite, Sage, Quick books

First Job; Accounts clerk at Sony

Sugar Company Ltd; out growers’

accounts division

Leadership positions held:

Quality management systems

Finance Department representative,

Chairman- Finance Determinant;

Operating Performance Index,

Finance and Controlling Super user

in ERP-SAP, Vice Chair Manyatta

Youth Polytechnic and Director

Nairobi Elite College among others.

Areas of interest in Finance

and Accounting: Management

accounting, cost accounting, financial

accounting, financial statement

analysis, corporate finance and

public sector financial management.

Below are excerpts from our interview:

What inspired you to become an


While in Primary and High school, I

used to get good marks in Business

Education. So I decided to nurture this

skill. The element of accountability

was another factor; my dad always

made us accountable. Whenever he

sent us to buy stuff, he would make

us account for every transaction and

from this I realized that finance was

the order of doing business and it was

Some of my


and achievements

include being a

super user in the

implementation of

ERP -SAP in finance

and controlling

modules. These

include preparing

data for migration

from manual system

to the new system,

guiding and training

staff in adopting

and implementing

the new system and

also liaising with the

ICT department in

sorting out teething


imperative for me to understand how

the economy operates.

Notable responsibilities and


Some of my responsibilities and

achievements include being a super

user in the implementation of ERP

-SAP in finance and controlling

modules. These include preparing

data for migration from manual

system to the new system, guiding

and training staff in adopting and

implementing the new system and

also liaising with the ICT department

in sorting out teething problems. My

responsibilities also entail ensuring

the integrity of the subsidiary and

general ledger, ascertaining the

integrity of controlling and funds

management sub modules and also

ensuring that proper systems and

procedures are put in place and well


Others are: leading the finance

department in ISO 9000 QMS

i.e. preparing, implementing,

monitoring and reviewing the

entire department procedures and

documentations and also carrying

out customer satisfaction surveys. My

achievements also include analyzing

and identifying the root cause,

correction and corrective action

plans to rectify any non-conformity.

Most challenging task

The most challenging task for me

was being a Financial Reporting

(FiRe) awards evaluator especially

in the IFRS category as it had 1400

lines as guidelines for pointing out

areas of non-compliance alongside

the auditor’s report, Public Finance

Management Act, Companies

Act, Board and Management

reports, clarity of notes, Corporate

Governance and environment and

sustainability reports. Remember all

these are not looked at in isolation

I had to read and understand all

the assigned financial statements

and penalize for areas where there

were mistakes and submit a report;

I was allocated quite a number of


Best moment in your job?

That happened the first time I was

given an opportunity to present the

budget and 2ndquarterManagement

Accounts to the Board Finance

committee; the Managing Director

and the Head of Finance as well

as other senior management were

happy with my performance and that

made me happy.



In your view is the accounting

system in Kenya moving in the

right direction?

Yes -

• This is because of disclosure,

corporate governance, integrated

reporting and key audit matters;

making our financial reports more

appealing to the readers. However

there is need for a review of the

Accountants’ Act to respond to new

sectors after thorough consultation

with members.

• One issue of concern however

is that the institute needs to take

action on errant members to save the

face of the accounting profession as

the public heavily relies on us when it

comes to financial matters as we are

the experts.

What changes would you like to

see at ICPAK?

The element of devolution; branches

need to be more empowered.

The issue of technical services;

ICPAK needs to engage members

more as it’s the backbone of this

noble profession.

The issue of member services; they

never pick up calls- this is a real


• ICPAK should also know what their

members do and where they are

based and also create opportunities

for members.

• ICPAK needs to streamline

who should be referred to as an

accountant as per Accountants’ Act.

• Public sector accountants are

disadvantaged because unlike

advocates and doctors, we don’t

get non-practicing allowance; this

should be addressed.

• Deregistration of members

should only happen after reaching

out to members and getting their

views. Find out why they have not

subscribed given that one may be

sick, out of employment or simply in

financial distress.

• Regarding corporate governance;

there is need for action on errant

members by the new disciplinary

team; fraud cases and creative

accounting are wrecking our image;

this must be redeemed at all costs.

• Disciplinary action should be

amicable and only taken when there

is sufficient evidence that a member

has failed in due professional care.

Also, proper investigations need to be

done before taking action. i.e. don’t

just go by hear -say.

• I appreciate the work done by the

office of the Accountant General by

training public sector accountants

at Kenya school of Government

and also encouraging public sector

organizations to participate in the

FiRe awards competition. This

approach has greatly improved public

sector financial statements and

sooner or later we shall be winning

awards in the competition.

What counsel do you have for

budding accountants?

You need to:

• Have a good accounting foundation

• Acquire strong IT skills

• Specialize in one line; accounting,

tax or auditing i.e. you should

specialize in your area of interest.

• Follow due process

• Be a problem solver and team

player; always lead from the front

and offer suggestions to your team

when there are bottle necks.

• Remember, good work ethics and

integrity will always stand you in

good stead.

• Never Gossip about anyone,

especially your seniors, juniors

and associates, it’s bad for you

and your advancement. Avoid it

like the plague, if there is an issue,

have fruitful deliberations and find

a solution. This not only applies to

your work place, it applies to all

aspects of your life, and to all of us.

What motivates you?

Getting it right first time; you need to

know what you want to do (goal) how

to do it, (process) when to do it (set

timelines) and why you are doing it

(what do you want to achieve?) you

also need to have a passion for it.

What do you do in your free time?

I like reading accounting and finance

journals, spending time with family,

watching football and also farming

as a hobby where I get some income.

Vote of thanks

I owe a lot of gratitude to my late

parents for teaching me the values

of life. My dad died when I was in

high school. If mum hadn’t taken

me to college, I wouldn’t be where

I am today. My parents taught me

the virtues of humility, patience,

integrity, accountability, fearing God,

and often reminded us that we do not

live in a vacuum as man is naturally


I would also like to thank all

my seniors for giving me immense

development skills and an

opportunity to grow by creating an

enabling environment for me to work;

I owe a debt of gratitude to Jane P.

Odhiambo, Managing Director of

Sony sugar company Ltd and to

other staff member without them, I

wouldn’t have attained what I have





Plum Fool




Serves two

A delicious meal to make for your loved one’s

on this month of love.

• 4 Chicken Pieces, Drumsticks & Thighs

• 30ml Cooking Oil

• 1 Red Onion, Chopped

• 2 Cloves of Garlic, Crushed

• 2 Dried Chilies

• 1 Fresh Chili, Chopped

• 4 Tomatoes, Chopped

• 350ml Stock Liquid

• 100g Dark Chocolate, Chopped Finely

• Salt And Pepper

• Preheat the oven to 180°C.

• Place the a pot onto the stove till hot , add

the oil and brown the chicken. Set aside the

chicken when browned.

• Return the pot onto the heat and sauté the

onions and garlic.

• Add the chilies and tomatoes.

• Place the chicken pieces back onto the pot

and stock liquid.

• Once it comes to a boil, switch off the stove

and transfer the pot into the oven.

• Allow to cook in the oven for 30 to 40mins

with lid on. Then 10min without the


• Remove pot from oven and add the

chopped dark chocolate, stir well.

• Serve with fragrant herd rice and salsa.

A quick and easy dessert that will wow your

taste buds.

Poached Plums

1/4cup of sugar

1 cup of water

1 tea bag

10 cherry Plums

Vanilla Cream

• 500ml cream

• 250g Icing Sugar

• 1 tsp of vanilla essence

• Combine the poaching ingredients apart

from the plums into a saucepan and

bring to a boil, then reduce the heat to a low


• Place the Plums into the poaching liquid and

cover for 10min.

• Remove the plum and set aside, continue to

reduce the liquid until thick syrup forms.

• Place the cream in a bowl, whip until

bubbles form.

• Slowly add a spoon full of icing sugar at a

time while whipping evenly. As it thickens.

• Finish off by adding the vanilla essence and

whip until thick and firm.

• Place in the Refrigerator, to cool.


• Spoon the cream into the glass, until half

way the glass.

• Cut the plum into half and remove the pit.

• Place 2 halves in to the glass with cream and

drizzle the reduced poaching liquid







By Clive Mutiso,

Britain’s recent referendum

decision to leave the European

Union has had some

unexpected consequences for

the country’s tourism industry.

Brexit, and the subsequent weakening in

the value of the Pound against the Kenya

Shilling has made it cheaper than ever for

Kenyans to plan a holiday in the United


Despite the promises of eternal

sunshine of the Leave campaigners, Brexit

has not improved the notoriously fickle

British weather, so late Spring, from May

onwards, is the start of the season when

visitors can enjoy some of the country’s

myriad outdoor attractions, and with

advance booking a return economy class

airfare from Nairobi to Heathrow can

still be had for under $800. Even with

the Pound below Ksh127 levels, hotels in

Central London can still seem expensive,

so one option can be to book comfortable

affordable accommodation a little out of

the city centre and to make day-trip forays

into the city by bus, train, or Underground.

For short trips, downloading the Uber

app can cut the cost of taxis, although

the traditional London cabs, with their

knowledgeable and carefully vetted

licensed drivers, are still well worth the

extra cost.

Watford lacks the glamour of the

West End but with hotel rates in the

$100 a night range for a double, and good

transport links, it is the sort of out-of-town

base that is worth considering. With two

Hiltons, a Holiday Inn, a Best Western,

and several other options, there are plenty

of good, affordable, rooms to choose from.

And apart from Central London there are

a whole host of attractions and adventure



activities within easy reach that can make

for a great family break.

If your group includes children – of any

age from seven to seventy – they would no

doubt be thrilled by a visit to the Warner

Bros film studio, just five kilometres away

from Watford, for a whole day tour of

the set where the Harry Potter movies

were filmed. Visitors can see the original

Hogwarts Express on Platform 9¾ of

Victoria Station, visit the Hogwarts Great

Hall, Dumbledore’s office, Malfoy Manor,

Diagon Alley, and all the other locations

from the films. The magical experience

includes the inside story of how the movies’

special effects were created. Tickets must

be purchased in advance.

It is the depth and diversity of the

attractions on offer that make the British

tourist industry so successful. The main

hustle is still the Royal Family, with their

palaces, the pageantry and the spin-offs

like the Duchy Original biscuits touted by

Prince Charles. But even the lesser hustles

of lesser mortals can be a great day out for a

visitor, and another attraction just a stone’s

throw from Watford is Knebworth House,

If your group includes children – of any

age from seven to seventy – they would

no doubt be thrilled by a visit to the Warner

Bros film studio, just five kilometres away

from Watford, for a whole day tour of the set

where the Harry Potter movies were filmed.

the stately pile of the Earls of Lytton,

descendants of the poet Robert Bulwer-

Lytton, who was Viceroy of India and

British Ambassador to France in the 19th

Century, although the extensive gardens

around Knebworth date from at least

two hundred years earlier and the Lytton

family’s association with Knebworth goes

back far longer. Those who regard the

British aristocracy as relics and dinosaurs

will appreciate the irony of the fact that

one of Knebworth’s principal features is

its Wilderness Garden and Dinosaur Trail.

There are more than 70 dinosaurs lurking

in the shrubbery, including an awesome

Tyrannosaurus rex, many of them emitting

terrifying sounds, but, no doubt due to

excellent management, not a single visitor

has been bitten by a dinosaur.

The dinosaur theme is carried into

the extensive adventure playground, with

its swings, zip wire, astro slide and Dino

Bouncy Castle. Knebworth has something

for everyone, even those who prefer

tranquillity to activity, with a 250-acre deer

park making a perfect picnic venue, and the

laid-back ambience of the garden terrace

tea room that serves coffee, snacks, and

leisurely light meals. But the place is not all

decorum and cream tea – Knebworth has

in recent years become famous for some

of the biggest rock concerts ever staged

in Britain. But the Hall’s core business is

family days out.

Family days out have been a feature of

British life since the 19th Century and the

tradition has been sustained despite all the

changes of the mobile phone and internet

age. And some of the best things in life are

free, like entry to one of the five Redwings



horse sanctuaries – four in South East

England within easy reach of London, and

the other in Scotland. Horses have always

held a special place in the affections of

Britons, but in modern times some people

have found it difficult to maintain the

horses in their care and many horses have

fallen into distressed conditions. Between

them the five Redwings centres rescue

more than 200 horses and donkeys every

year and altogether they care for more than

1,500 animals at any one time, making

Redwings the largest horse sanctuary in

the United Kingdom.

There are three major aspects to the

work of the organisation, starting with the

promotion of the welfare of horses, ponies,

donkeys, and mules through outreach

to schools, colleges, and horse owners.

However, education is not always enough

and Redwings frequently has to rescue,

care for, and rehabilitate horses that have

not been properly looked after. Then, when

abused animals have been taught to trust

humans again, efforts are made to identify

caring families to offer them a new home.

Visitors are welcome from 10am to 4pm

from Friday to Monday each week and get

the chance to interact with the animals

and the dedicated team who care for

them. Apart from tea and cake, there are

no touristy frills – just a chance to spend a

few priceless hours in the countryside and

learn about horses and their needs.

With some of Europe’s biggest and

But, no matter

how many outof-town


you make, you’ll

no doubt still

want to do all the

City sights – and

that is when you

will appreciate

the benefits of a

public transport

system that

works so well

that there is no

need to hire

a car to get


most densely populated cities, Britain has

all the problems of urbanisation, including

homeless people living on the streets,

violent crime, and drugs. But a redeeming

feature is the care that has been taken to

preserve as much as possible of the rural

environment, and to give families the

chance to get away from the inner city

and enjoy nature. Wicksteed Park, in

Kettering, is just North of London off the

M1 motorway, and offers 147 acres of allday,

all-the-year-round outdoor activities.

The park is a registered charity, run with

strong support from volunteers, and

financed from the income from visitors.

Laid out around a central lake,

Wicksteed Park offers a Nature Trail with

small wildlife and birds, an arboretum,

a campsite, and more than 20 different

children’s rides, including a miniature

railway that meanders through the

grounds. There are food outlets and a gift

shop, a caravan site and a luxury lodge, and

a campsite where visitors can sleep over in


While Wicksteed Park offers a

smorgasbord of the simple rural pleasures

of life, Paulton’s Family Theme Park in the

New Forest in Hampshire near the South

Coast is more glitzy, with activities and

rides themed on kids’ television characters.

Peppa Pig World has seven rides that echo

the lives of the television characters Peppa

and George and children get to meet

the characters themselves. Critter Creek



has even more rides and, from this year,

visitors have had the added attraction of

The Lost Kingdom, with eight different

dinosaur rides. Parking at Paulton’s is free,

but carry plenty of spending money for the

rides, access to the gardens whichever of

the thirteen different restaurants, snack

bars and ice cream parlours that catch your


But if you are looking for more than

nature trails and passive rides, and want

an unusual athletic experience, then it is

worth spending part of your UK holiday

in preliminary training for the next

Winter Olympics. Let’s face it, if you do,

then you are almost certain to make the

Kenya Winter Olympic team – there is

not much competition in the skiing and

snow sledding categories in East Arica.

The place to go is Snozone, which has two

locations, one in the South of England just

outside London, and one in the North. The

centres offer real snow 364 days a year and

since 2000 they have taught more than 1.8

million people to ski and snowboard. Apart

from adult training and coaching, every

weekend there are SnoAcademy sessions

for children aged seven to 15 years. Other

action sports offered at Snozone include

skydiving and climbing.

But, no matter how many out-of-town

visits you make, you’ll no doubt still want

to do all the City sights – and that is

when you will appreciate the benefits of a

public transport system that works so well

that there is no need to hire a car to get

around. The bus network covers all zones

from the city centre, through every suburb

and beyond, and the Underground railway

network runs through every part of

Greater London, with some services now

operating all night. There are taxis, guided

tour buses, the Docklands Light Railway,

rickshaws and even bicycles for visitors.

The only means of transport not available

– a real culture shock for patriotic Kenyans

– is the matatu.




our world

The 2030 Agenda for

Sustainable Development

By FCPA Jim McFie, a Fellow of the Institute of Certified Public Accountants of Kenya

The 2030 Agenda for Sustainable

Development of the United

Nations Organization is a plan

of action for the people of the

world, the planet and prosperity.

It also seeks to strengthen universal peace

in larger freedom. The UN recognizes that

eradicating poverty in all its forms and

dimensions, including extreme poverty,

is the greatest global challenge and an

indispensable requirement for sustainable

development. The UN desires all countries

and all stakeholders, acting in collaborative

partnership, to implement this plan. The

body is resolved to free the human race

from the tyranny of poverty and want,

and to heal and secure the planet. The

UN is determined to take the bold and

transformative steps which, they claim, are

urgently needed to shift the world on to a

sustainable and resilient path. As the people

of the world embark on this collective

journey, the UN pledges that no one will be

left behind. The Sustainable Development

Goals (SDGs)and the targets which the

UN announced on 25 September 2015

demonstrate the scale and ambition of this

new universal Agenda. The SDGs seek to

build on the Millennium Development

Goals and complete what they did not

achieve. They seek to realize the human

rights of all and to achieve gender equality

and the empowerment of all women and

girls. They are integrated and indivisible

and balance the three dimensions of

sustainable development: the economic,

the social and the environmental. The

Goals and targets will stimulate action

over the next 15 years in areas of critical

importance for humanity and the planet.

The UN points out that the Agenda is of

unprecedented scope and significance. It is

accepted by all countries and is applicable

to all, taking into account different

national realities, capacities and levels

of development and respecting national

policies and priorities. They are universal

goals and targets which involve the entire



world, the developed

and the developing

countries alike. They

are integrated and

indivisible and balance

the three dimensions

of sustainable


The Goals and targets

were the result of over

two years of intensive

public consultation

and engagement

with civil society and

other stakeholders

around the world,

which paid particular

attention to the voices

of the poorest and the

most vulnerable. This

consultation included

valuable work

done by the Open

Working Group of

the General Assembly

on the Sustainable

Development Goals

and by the United

Nations, whose


provided a synthesis

report in December


In these Goals and targets, the UN

sets out a supremely ambitious and

transformational vision. It envisages a

world free of poverty, hunger, disease and

want, where all life can thrive. It envisages

a world free of fear and violence; A world

with universal literacy; A world with

equitable and universal access to quality

education at all levels, to health care and

social protection, where physical, mental

and social well-being are assured. A world

where people reaffirm their commitments

regarding the human right to safe drinking

water and sanitation and where there

is improved hygiene; and where food is

sufficient, safe, affordable and nutritious.

A world where human habitats are safe,

resilient and sustainable and where there is

universal access to affordable, reliable and

sustainable energy.

The UN envisages a world of universal

respect for human rights and human

dignity, the rule of law, justice, equality

and non-discrimination; of respect for

race, ethnicity and cultural diversity;

and of equal opportunity permitting the

full realization of human potential and

contributing to shared prosperity; A world

which invests in its children and in which

every child grows up free from violence

and exploitation. A world in which every

woman and girl enjoys full gender equality

and all legal, social and economic barriers

to their empowerment have been removed;

a just, equitable, tolerant, open and socially

inclusive world in which the needs of the

most vulnerable are met.

The UN goes on to envisage a world

in which every country enjoys sustained,

inclusive and sustainable economic growth

and decent work for all. A world in which

consumption and production patterns and

the use of all natural resources – from air

to land, from rivers, lakes and aquifers to

oceans and seas – are sustainable. One

in which democracy, good governance

and the rule of law, as well as an

enabling environment at the national

and international levels, are essential

for sustainable development, including

sustained and inclusive economic growth,

social development, environmental

protection and the eradication of poverty

and hunger. One in which development

and the application of technology are

climate-sensitive, respect biodiversity and

are resilient; One

in which humanity

lives in harmony

with nature and in

which wildlife and

other living species

are protected.

S o m e

people talk of

the Sustainable

Development Goals

(SDGs) as if every

person is familiar

with all of them: I

doubt that this is the

case. Here they are

so that we are all on

the same page:

Goal 1. End poverty

in all its forms


Goal 2. End hunger,

achieve food security

and improved

nutrition and

promote sustainable


Goal 3. Ensure

healthy lives and

promote well-being

for all at all ages.

Goal 4. Ensure

inclusive and equitable quality

education and promote lifelong learning

opportunities for all.

Goal 5. Achieve gender equality and

empower all women and girls.

Goal 6. Ensure availability and sustainable

management of water and sanitation for


Goal 7. Ensure access to affordable,

reliable, sustainable and modern energy

for all.

Goal 8. Promote sustained, inclusive and

sustainable economic growth, full and

productiveemployment and decent work

for all.

Goal 9. Build resilient infrastructure,

promote inclusive and sustainable

industrialization and foster innovation.

Goal 10. Reduce inequality within and

among countries.

Goal 11. Make cities and human

settlements inclusive, safe, resilient and


Goal 12. Ensure sustainable consumption

and production patterns.

Goal 13. Take urgent action to combat

climate change and its impacts.

Goal 14. Conserve and sustainably use



The UN recognizes that eradicating poverty in all its

forms and dimensions, including extreme poverty, is

the greatest global challenge and an indispensable

requirement for sustainable development.

the oceans, seas and marine resources for

sustainable development.

Goal 15. Protect, restore and promote

sustainable use of terrestrial ecosystems,

sustainably manage forests, combat

desertification, and halt and reverse land

degradation and halt biodiversity loss.

Goal 16. Promote peaceful and inclusive

societies for sustainable development,

provide access to justice for all and

build effective, accountable and inclusive

institutions at all levels.

Goal 17. Strengthen the means of

implementation and revitalize the Global

Partnership for Sustainable Development.

The UN is quick to caution stakeholders

about the immensity of the task ahead. It

adds that the promoters of the document,

and the rest of the world, are meeting

at a time of immense challenges to

sustainable development. Billions of

the world’s citizens continue to live in

poverty and are denied a life of dignity.

There are rising inequalities within and

among countries. There are enormous

disparities of opportunity, wealth and

power. Gender inequality remains a key

challenge. Unemployment, particularly

youth unemployment, is a major concern.

Global health threats, more frequent

and intense natural disasters, spiraling

conflict, violent extremism, terrorism

and related humanitarian crises and

forced displacement of people threaten

to reverse much of the development

progress made in recent decades. Natural

resource depletion and adverse impacts

of environmental degradation, including

desertification, drought, land degradation,

freshwater scarcity and loss of biodiversity,

add to and exacerbate the list of challenges

which humanity faces. Climate change

is one of the greatest challenges of our

time and its adverse impacts undermine

the ability of all countries to achieve

sustainable development. Increases in

global temperature, sea level rise, ocean

acidification and other climate change

impacts are seriously affecting coastal

areas and low-lying coastal countries,

including many least developed countries

and small-island developing States. The

survival of many societies, and of the

biological support systems of the planet,

is at risk.

As I was driving along Uhuru

Highway a short while ago, a thin, young

girl of possibly fourteen, fifteen or sixteen

was idling on the sidewalk, sniffing a

plastic bottle of glue, with a very small

baby strapped to her back: she is just one

of countless young girls in that state in

the cities, towns and villages in Kenya.

She has no family: her mother is possibly

a prostitute: her father is a man who uses

prostitutes: the father of the baby on her

back is probably a street boy: what is the

future of that young girl and that of the

baby strapped to her back? It is very easy

for the delegates of the various countries

represented at the United Nations to

publish well-meaning documents, which

promise heaven on earth. But we must be

realistic: are you and I doing enough to

make Kenyans aware of the difficulties of

eradicating poverty in Kenya? Do we take

concrete steps to provide employment

and explain to employees that all of us

have to make sacrifices to increase the

wealth we must create for society? Our

culture tends to prevent us from helping

those around us – as is the case the world

over. So are the Sustainable Development

Goals realistic? Or will we have 34 goals

in 2030 (twice as many as those of 2015)

which reiterate the same targets because

we never achieved those of 2015?



Tap and Connect

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