CONTROL ENVIRONMENT AND FINANCIAL RISK MITIGATION EFFICIENCY OF SUPERMARKETS DURING COVID-19 IN NAIROBI CITY COUNTY, KENYA
CONTROL ENVIRONMENT AND FINANCIAL RISK MITIGATION EFFICIENCY OF SUPERMARKETS DURING COVID-19 IN NAIROBI CITY COUNTY, KENYA
James Kamau Kimani - Masters Student, Kenyatta University, Kenya
Dr. Vincent Shiundu Mutswenje - Lecturer, Department of Accounting and Finance, Kenyatta University, Kenya
ABSTRACT
Retail business ventures world over are well thought-out susceptible to various threats that needs to be tackled to shun impending financial fatalities/damages. Like any other type of business operating in Kenya, supermarkets face a myriad of financial and operating risks when carrying out their day to day operations. In the recent past, many supermarkets in Nairobi and other areas in the country have been forced to close down. Among the factors that have contributed to the closure and poor survival rates in the supermarkets sector is the increasing financial and operational risks. Consequently, management duty’s significance in guaranteeing adequacy and efficacy of laid down guidelines and act in moderating such threats cannot be overemphasized. In today’s business environment with tight margins and fierce competition, management competence significantly determines whether or not a business entity going to be successful. Currently, this study sought to determine the influence of control environment on the financial risk mitigation efficiency among the supermarkets during COVID-19 in Nairobi County, Kenya. Particularly, it sought to institute the link amid ICT integration, management efficiency, physical controls of assets, authorization and approval of transactions and financial risk mitigation efficiency of supermarkets during COVID-19 in Kenya’s Nairobi City County. Contingency Theory (CT), Technology acceptance theory, Cressey’s Fraud Theory and Firm Value Maximization Theory serve as anchored theories. Descriptive research design was adopted by the study. 66 supermarkets as recognized by Kenya’s RETAK comprised the study’s target population. The study exclusively targeted branch managers/heads of the 66 supermarkets in Kenya’s Nairobi City County. Cumulatively, the population of the study was made of 66 respondents selected through purposive sampling technique. Descriptive statistics involving frequencies, means and standard deviations were used. Diagnostic test such as multicollinearity and normality model fit analysis of variance and coefficient parameters were employed to validate the regression model. The study found that information communication and technology integration is a statistically significant predictor of financial risk mitigation efficiency (β1=0.191, p<.05). The study also found that management efficiency is a statistically significant predictor of financial risk mitigation efficiency (β2=0.339, p<.05). Further, the study found that physical control of assets is a statistically significant predictor of financial risk mitigation efficiency (β2=0.123, p<.05). Finally, the study further found that physical control of assets is a statistically significant predictor of financial risk mitigation efficiency (β2=0.733, p<.05).
