Control activities and financial accountability of service state corporations in Kenya: The moderating role of the board of governance and the mediating effect of internal audit effectiveness

Authors

  • Miriam Njeri Nginga Kabarak University, Kenya
  • Stella Korir Kabarak University, Kenya
  • Stephen Oloo Magadi Kabarak University, Kenya

Keywords:

Control Activities, Financial Accountability, Internal Audit Effectiveness, Board of Governance, Service State Corporations

Abstract

This study examined the influence of control activities on financial accountability of service state corporations in Kenya, with internal audit effectiveness as a mediating variable and Board of Governance as a moderating variable. The study was anchored on Agency Theory, Stewardship Theory, and Systems Theory. A descriptive-explanatory research design was adopted, targeting 82 service state corporations, from which 68 corporations were selected through stratified random sampling. Four respondents were selected from each corporation, comprising finance officers, internal auditors, accountants, and procurement officers, resulting in a target sample of 272 respondents. Data were collected using a structured questionnaire measured on a five-point Likert scale and analyzed using SPSS 29 and SmartPLS 4. Partial Least Squares Structural Equation Modelling was employed to assess the measurement and structural models, while bootstrapping was used to test direct and indirect effects and the interaction effect. The findings established that control activities significantly and positively influenced internal audit effectiveness (β = 0.479, p < 0.001) and financial accountability (β = 0.228, p < 0.001). Internal audit effectiveness also significantly influenced financial accountability (β = 0.468, p < 0.001). Internal audit effectiveness significantly mediated the relationship between control activities and financial accountability (indirect effect β = 0.224, p < 0.001), representing complementary partial mediation. Although Board of Governance had a significant direct effect on financial accountability (β = 0.112, p = 0.021), its moderating effect was not statistically significant (β = 0.013, p = 0.770). The study concluded that effective control activities and internal audit effectiveness were important mechanisms associated with financial accountability in service state corporations in Kenya.

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Published

2026-10-23

How to Cite

Nginga, M. N., Korir, S., & Magadi, S. O. (2026). Control activities and financial accountability of service state corporations in Kenya: The moderating role of the board of governance and the mediating effect of internal audit effectiveness. International Journal of Economic Perspectives, 20(10), 1020–1040. Retrieved from https://ijeponline.lingcure.org/index.php/journal/article/view/1408

Issue

Vol. 20 No. 10 (2026)

Section

Peer Review Articles
Copyright & Licensing

Copyright (c) 2026 Miriam Njeri Nginga, Stella Korir, Stephen Oloo Magadi

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