Effect of Audit Committee Characteristics on the Financial Performance of Deposit Taking SACCOs in Kenya

Abstract

This study sought to assess the effect of Audit committee characteristics on the financial performance of deposit taking SACCOs in Western Kenya. The study was anchored on Economic Value Added, Agency. Primary and secondary data was collected and analyzed using correlational research design. Purposive sampling was used to select respondents from the population and the sample size was 120 respondents drawn from the SACCO’s top management. The study employed census survey technique with the response rate at 93%. Pre-validated questionnaires had a reliability alpha of α = 0.874 audit committee characteristics and α = 0.873 financial performance internal consistency. Results revealed indicating that audit committee characteristics accounted for 65.1% variance in financial performance and has a strong effect on financial performance. The study recommends that SACCOs should prioritize the implementation of internal control systems and improve the audit committee’s effectiveness with focus on independence and expertise.