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THE EVOLUTION OF AUDITORS HOW SKILLSETS ARE CHANGING6 34 38 12NATURAL RESOURCES IN

KENYA; CURSE OR BLESSING TO COUNTY GOVERNMENTS?

WOMEN GEARING FOR BOARDS: JUST ANY BOARD?

CHAMPIONING FINANCIAL REPORTING, CORPORATE GOVERNANCE AND SOCIAL RESPONSIBILITY IN EAST AFRICA

Ksh 300Ushs 9,000Tshs 5,700RWF 2,400

NATURAL RESOURCES IN KENYA CURSE OR BLESSING TO COUNTY GOVERNMENTS?

3THE ACCOUNTANTJANUARY - FEBRUARY 2016 JANUARY - FEBRUARY 2016

TABLE OF CONTENTS

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

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34 CHAMPIONING FINANCIAL REPORTING, CORPORATE GOVERNANCE AND SOCIAL RESPONSIBILITY IN EAST AFRICA

THE EVOLUTION OF AUDITORS HOW SKILLSETS ARE CHANGINGCOVER STORY

FINANCIAL REPORTING AND ASSURANCE

GOVERNANCE

MANAGEMENT

ECONOMY

PEN OFF

Members of the Council

ChairmanFCPA Fernandes Barasa

Vice ChairmanFCPA Julius Mwatu

Chief ExecutiveCPA Dr. Patrick Ngumi (PhD)

Editorial Team

Head of PublicationMbugua [email protected]

Editorial ConsultantAngela Mutiso

Staff WriterValerie Alusa

Marketing & AdvertisingCommunications Department

Design & LayoutDigital Print Media

Publication and CirculationICPAK, CPA Centre, Thika RoadP.O. Box 59960-00200 City Square, Nairobi KenyaTel: +254 20 230 42 26/7Mob: +254 721 469 796/169, +254 727 531 006, +254 733 856 262Fax: +254 20 856 22 06, Email: [email protected]

Council MembersFCPA Pius NduatihCPA Wycliffe ShamiahCPA Geofrey MalombeCPA Obare NyaegaCPA Rose MwauraCPA Susan OyatsiMs. Damaris KimosopCPA June Nduku KivindaCPA Samuel Okello


NATURAL RESOURCES IN KENYA; CURSE OR BLESSING TO COUNTY GOVERNMENTS?

THE ROLE OF STRATEGIC INTENT IN MANAGEMENT OF PUBLIC & PRIVATE ENTITIES WHY IT IS IMPORTANT TO AVOID

THE DESTRUCTION OF KENYA’S EDUCATION SYSTEM

DE-REGISTRATION NOTICE

(Sections, 4 (1) (5), 22 (1), (2), (3), 23, 24, 25 (1), 29(1) c

(4) and (5) of the Accountants Act no. 15 of 2008 as read

together with By -Law No. 9)

WHEREAS the list provided was earlier published in the Institutes special e-connect on the 20th June 2015 and the advertisement in the Daily Nation of 16th October 2015, the listed members were hereby called upon to show cause why their registration as members of the Institute should not be cancelled by deregistration.

TAKE NOTICE, therefore, that twenty one (21) days’ notice period issued on the 16th October 2015 has lapsed.

NOTICE is hereby given that members listed and who have failed to meet the compliance requirement for membership of the Institute have been deregistered effective 16th November, 2015.

Chief Executive & Secretary to Council To view the list please visit:www.icpak.com/deregistered

Dear Reader

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Email: [email protected]: ICPAK, CPA Centre, Thika Road

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We are pleased to inform you that you can now get a copy of The Accountant journal from leading

stores, supermarkets and vendors countrywide.

EDITOR'S NOTEYOUR VIEWS

Accountants, auditors and stakeholders met in October 2015 to discuss aligning accountability

and performance. The meeting was the first Public Sector Audit conference in Kenya. It brought together some of the most senior audit officials in the country and came at a time when the Audit Function is gaining currency at a steady pace. They had a lot of interesting information for auditors; these included: Aligning accountability and performance; Audit Reporting; delivering value to stake holders; Best practices in managing the Internal Audit Function and the case of the judiciary’s Internal Audit.

It was noted during the meeting that the public outrage that was experienced during the release of the 2013/2014 financial year audit report by the Auditor General clearly shows that there is need to align accountability and performance in the public sector. The report highlighted in its key findings, grand corruption by way of payments that are not supported by invoices and receipts from service providers, absence or lack of updated asset registers, absence of Audit Committees and risk management policies as required by the Public Finance Management Act, weak debt recovery systems and flouting of procurement regulations among others.

In the private sector, companies routinely assess the value and benefit of their operations (ultimately their profitability) through financial accounting. Failure to do so may threaten their survival. Companies have widely used indicators as an evaluation

instrument to measure all relevant quantifiable parameters. Complex indicator systems serve as information and controlling tools to record outcome and impact, and are a useful yardstick for assessing a company’s business performance. This is our cover story this time.

Under business practice and development the author says there are examples of audit offices that have published brochures explaining their role and the way audits are planned and conducted, but this may not be common practice. Too bad, because lack of understanding and clarity leads to lack of trust before the audit has even begun and risks creating confusion about roles and responsibilities. Auditors are accountable to senior management to provide independent and objective statements of the measures taken by auditees (whatever their role) to mitigate business risk. This implies that auditors are meant to examine probe and challenge activities; obtain and evaluate evidence; and then report their findings and observations, including recommendations where necessary. This is an interesting feature that explains at length the audit purpose to the auditees.

The world has become a more complex and competitive place. Individual corporate organizations have become more powerful than some entire nations, and the balance of economic power has shifted to the corporation within which ideas and information have become the most highly prized assets with more value than a company’s products and services. To a considerable degree,

businesses, administration and society as a whole have come to depend on the efficiency and security of information technology, resulting in information acquiring a new and distinct value that cannot be protected in the same way as tangible objects. Find this in the innovation segment.

The environment story discusses the diminishing fish. There are many pleasures to be derived from fish; health, fishing, aesthetics, serenity, and many more. Besides, eating fish high in omega-3s can slash blood fat levels, which can contribute to a lower heart-disease risk. In fact, eating as little as once a week can preserve gray-matter neurons – the part of the brain linked to memory and cognition – according to a new study. Despite these findings however, fishes continue to die in droves. Unless measures are taken to check this, fishes will continue to reduce.

You will also find interesting features in our travel, health, inspiration, and pen off which poses a thought provoking question: Are the teachers teaching?

Find these as well as your regular features in this exciting journal.■

Editor

54 THE ACCOUNTANTTHE ACCOUNTANT JANUARY - FEBRUARY 2016 JANUARY - FEBRUARY 2016

THE EVOLUTION OF AUDITORS: HOW SKILLSETS ARE CHANGINGBy Jim McFie, a Fellow of the Institute of Certified Public Accountants of Kenya

FINANCIAL REPORTING AND ASSURANCE FINANCIAL REPORTING AND ASSURANCE

PricewaterhouseCoopers recently

published an article on the new skills

required in the practice of auditing.

The article was written in the US for

a world-wide audience and part of the

passage repeats what has been stated

by the Institute of Internal Auditors.

A very good piece, available on the

KPMG website, written by Richard

Chambers, President and Chief

Executive Officer of the Institute of

Internal Auditors, and Paul McDonald,

Senior Executive Director at Robert

Half International which specializes in

the placement of accounting, finance

and business systems professionals, is

entitled: “Succeeding as a 21st Century

Internal Auditor: 7 Attributes of Highly

Effective Internal Auditors”. Whenever

I read an article of this nature, I ask

myself if we in Kenya are keeping

up with the best in an internationally

competitive field. The best in Kenya

are: what about those below the best?

Students at schools are learning that

the way to get to university is to

cheat: the skillset (a word used in the

PwC article) of students coming out

of secondary schools in the national

system is constantly declining: is

Kenya going to be able to compete

in the future? Will young Kenyans be

able to get jobs internationally as they

have been able to do in the past? In

a recent discussion with the Cabinet

Secretary for education, I mentioned

these worries: but he had to defend the

system – which he did: he said that he

had noted the worries that I had brought

to his attention: but in the final analysis,

what can he really do to change a large

number of parents, teachers, examiners

and administrators, many of whom

are unaware of how competitive is

the world we live in? Recently, the

Government announced that it was

embarking on an industrialization

plan: but the Government, and its tax

collecting agent, the Kenya Revenue

Authority, is its own worst enemy. I

use the insecticide “Doom”: it used

to be made in Nairobi: now it is

manufactured in Dubai, where highly

skilled immigrants work their hearts

out, water (distilled from the sea) is

plentiful, electricity is cheaper than

in Kenya and where the rate of tax

is ZERO: will the manufacturer of

“Doom” ever return to Nairobi? The CS

in charge of these matters is a genius:

he obtained a first class honours degree

in economics at the University of

Nairobi: but why did it take two years

for him to realize that KRA would not

raise KShs 6 billion per annum by

putting a tax on “Senator” beer which

doubled its price, put it out of the reach

of its consumers, encouraged them to

revert to changaa, put nine thousand

bars out of business and killed the

sorghum growing farmers?

The PricewaterhouseCoopers’ article

points out that the breadth and depth

of data will drive changes in auditor

7THE ACCOUNTANTJANUARY - FEBRUARY 20166 THE ACCOUNTANT JANUARY - FEBRUARY 2016

98 THE ACCOUNTANT THE ACCOUNTANTJANUARY - FEBRUARY 2016 JANUARY - FEBRUARY 2016


skillsets: auditors still need a deep

knowledge of accounting and auditing:

this is not changing. But as companies

evolve, so must the way they are

audited. Auditors have—and should

continue to—tailor their procedures

to be responsive to emerging risk

areas or complex transactions that are

specific to each company they audit.

But today, auditors are rethinking the

audit approach for a broad population

of companies due to a more universal

change in how companies operate.

The volume of data that companies

in the developed world create is

astounding: a Kenyan company in this

league is Safaricom: it is totally familiar

with “big data”. This data is often in

disparate systems, and the extent of

the information captured may not be

widely understood within the company.

However, being able to effectively

and efficiently capture and analyze

this data is increasingly important to

performing the audit, and being able

to provide insight into operational

effectiveness, business trends, and

business and compliance risks. We

know the Central Bank of Kenya has

instructed its own inspection team

and external auditors to thoroughly

interrogate banks’ computer systems.

Leveraging technology to be able to

identify, analyze, and interpret the data

is therefore an increasingly important

skillset for auditors.

Another auditor pre-requisite is critical

thinking. This art is TOTALLY absent

from KCSE teaching in Kenya: it is

difficult to develop it after students have

left high school: many students pick up

nice sounding sound-bites and repeat

them without understanding what they

are saying. Auditors need to efficiently

navigate the reams of data available,

to assess its reliability, usability, and

relevance. They need to be able to

articulate what data they need—after

all, when asking for a large volume of

information, it is important to get the

right data the first time. They also need

to be able to analyze the information

they receive, draw connections to other

data points from inside and outside

the company, and identify trends

and risks. These are tasks that most

auditors become proficient at once

they enter the workforce and gain real-

life experience. But auditors must be

astute in designing customized audit

approaches, since the availability,

relevance, and accuracy of information

at each company will vary—and what

might be an insightful data relationship

at one company may be less meaningful

at another. These tasks also increasingly

require additional technical skills

best taught in university and on CPA

courses, including those associated

with information technology (to

assess system interfaces, analyze data,

and understand information security

– which is critical in determining

whether the data is reliable), critical

analysis (to identify relationships,

identify anomalies, and perform

benchmarking, where necessary)

and statistics (to perform relational

and predictive analysis and set

expectations for audit testing). To tap

into this skillset in a deeper way, 12%

of PwC’s US fiscal year 2015 campus

hires possessed a degree in science,

technology, engineering or maths.

Another ability required by auditors

is that of focusing on analyzing data,

not gathering it. In smaller audit firms,

audit trainees spend much of their time

performing routine audit tasks (e.g.,

confirming bank balances, testing cash

receipts). Increasingly, audit firms are

centralizing routine tasks, freeing up

audit team members to work on other

aspects of the audit. This change in

approach will provide less tenured audit

team members with more opportunities

to focus on higher level tasks, including

reviewing work performed by others,

resolving questions with clients, and

using available data to set expectations

for their audit testing. Another aspect

of auditing that continues to evolve

is auditors’ analysis of data. More

and more, this analysis will cover full

populations of data rather than just

samples—something made possible

by rapidly evolving audit software.

This approach will likely yield broader

insights than sampling has in the past.

Higher order skills—such as deep

business acumen, critical thinking

skills, and understanding market

trends—have long been expected of

more senior auditors. These skills

are tested in an admirable way by

the examinations of the Institute of

Chartered Accountants in England and

Wales: this is what makes having the

ACA qualification worthwhile. But

increasingly, all auditors, including

those with less experience, need to

demonstrate them to a greater extent to

succeed in their data-intensive work. As

a result, individuals who are naturally

inclined toward business topics (in

addition to accounting topics) are

likely to be well suited for an auditing

career. For example, understanding

economics helps an auditor think about

the impact of market trends or economic

pressures on a company’s decisions:

but down-to-earth economics – not

the academic type which would well

suit a lecturer at a university better

than a CS in a ministry of finance.

Likewise, understanding finance helps

auditors establish expectations of the

performance of a company’s business

for purposes of their risk assessment

process during audit planning and

execution.

PwC in the US recruits and assesses

performance consistent with their

view of what skills and behaviours

an audit professional would need

to be successful: its professional

development framework focuses on

technical capabilities as one aspect of

an auditor’s job. It also emphasizes

that demonstrating business and global

acumen, exhibiting leadership skills,

and possessing the ability to cultivate

relationships are as important as being

a strong technical accountant. While

these skills are exhibited differently

by an entry level audit trainee as

opposed to someone with much more

experience, PwC in the US assesses all

its professionals using this framework.

One upside of many of these skills

is that they can be developed from

experiences outside of classroom

coursework. For example, study-

abroad programs facilitate global

acumen and relationship building.

Typical jobs while one is at university

or volunteering can help develop

leadership skills and business acumen.

And working in teams or being

involved in extracurricular activities

help enhance interpersonal skills—

something that underpins all of PwC’s

US development framework. It will

be increasingly important for students

in Kenya to make time for these

experiences, to recognize how these

experiences help them develop, and to

be able to apply what they have learned

to business circumstances.

The foundation for some of the

skills auditors need in a data-driven

business environment will need to

be developed in university and CPA

courses. Unfortunately, in Kenya the

majority of students are completely

focused on passing examinations, not

on learning skills that will make them

useful employees in anaudit firm –

or in business: the major part of the

education system is bent on getting

high marks, by fair means or foul.

Now that the KCSE examinations are

available before the examinations are

sat, it will be harder to select candidates

who have the requisite academic

ability to handle the development

required of them in a quality firm. And

it will likely take some strategic design

on the part of universities and colleges

to offer a curriculum that meets the

evolving needs of their accounting

students without extending the length

of time it takes to graduate with an

accounting degree. PwC in the US

believe this can be accomplished by

integrating analytical exercises into the

existing curriculum to help students

develop proficiency in data analytics

in addition to their core accounting

skills: it also proposes incorporating

a series of case studies throughout the

accounting coursework that require

hands-on use of analytics and other

tools students may encounter on the job

(such as cloud computing). Integrated

real-life scenarios would help students

understand the application of theory

to actual fact patterns, and develop a

cross-section of skills, not just those

related to the academic subject the class

happens to fall under. This is already

happening on some campuses in the

US. It has been the case for some time

in the ICAEW system of examinations:

that is, these examinations test critical

thinking, problem solving, analytical

ability and professional skepticism.

A question that could be raised is how

soon will the impact of technology

be evident in audits? The big firms in

Kenya have been investing in leading-

edge technology, significant process

improvements, and leadership and

performance development for their

people, and will continue to do so.

This is helping them to move towards

different tactical ways of auditing that

will help to continue to deliver high

quality audits in an efficient manner

and provide unique insights for their

clients. One firm recently rolled out

software to its audit teams that helps

them interrogate and analyze large

volumes of transactional data. The

built-in algorithms and visualization

technology help its teams better

understand their clients’ businesses

and provide more meaningful insights.

A more fundamental question is

whether companies being audited

would realize any benefits from this

change in auditor skillset? PwC in the

US believes that there is certainly an

opportunity for companies to realize

benefits from the changing auditor

skillset. Leveraging technology is

intended to make the audit more

streamlined, benefiting everyone

involved by simplifying routine


tasks. The changing skillsets and

technological tools will help auditors

provide additional insight into

companies’ businesses. For example,

by analyzing full populations of

journal entries, auditors may be

able to identify processes that could

be refined. Likewise, auditors may

identify duplicate data when gathering

information from different systems

for analyzing trends. Bringing this to

the company’s attention may provide

opportunities for increased efficiency

in the company’s operations. Finally,

auditors’ data analysis may identify

relationships or areas of operating risk

that companies may not have previously

considered, giving management the

opportunity to anticipate potential

problems.

A sixty four thousand dollar question

is whether individuals entering the

workforce today are prepared for this

evolution in skillsets or will audit firms

need to supplement their education on

the job? Realistically, the answer is

that firms will have to do more and

more training. Many universities and

colleges are unable to keep up with

this evolving skillset: some are getting

started. Therefore, accounting firms

will need to be prepared to teach some

of these skills on the job and through

enhanced learning and development.

Many of these skills have been taught

on the job for years, but the pace of

training may need to be accelerated

as compared to the instruction given

to prior generations of auditors.

Conveniently, some millennials have

grown up using computers, mobile

technology and smart devices from

when they were very young: they

therefore have a much more advanced

baseline knowledge of digital

information than the generations that

preceded them. In addition, a PwC

survey of millennials around the globe

found that more than 50% indicated

development opportunities as an

important attribute of a workplace

since they are eyeing rapid career

progression.

The future has many challenges in store

for audit firms: the new Companies

Act is only one of them: the gap

between large audit firms and small

ones is going to increase significantly:

sole proprietors have to aim to form

viable partnerships that will be able to

adopt the technology and recruit and

train staff that will make their audits

economical and efficient: the time to

start is now■

10 THE ACCOUNTANT JANUARY - FEBRUARY 2016 JANUARY - FEBRUARY 2016 11THE ACCOUNTANT


CHAMPIONING FINANCIAL REPORTING, CORPORATE GOVERNANCE AND SOCIAL RESPONSIBILITY IN EAST AFRICACompiled by Angela Mutiso

[email protected] Sameer Africa Limited was the

overall winner of the 14th

edition of the FiRe award.

According to the Chief Judge, Jim

McFie, Sameer Africa Limited got

the award because it achieved “very

high level of compliance with IFRSs,

very good corporate governance,

environmental and social responsibility

disclosure.”

The promoters of the of the FiRe

Award: Institute of Certified Public

Accountants of Kenya (ICPAK);

Capital Markets Authority (CMA);

and the Nairobi Securities Exchange

(NSE): were of the view that in order

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.

The promoters welcomed the Public

Sector Accounting Standards Board

on board as a promoter in 2015. And

the board has done a great job in this

edition which has seen the entry of 276

public sector entities. This follows the

adoption of the International Public

Sector Accounting Standards as the

reporting framework for the public

sector in Kenya in 2014.

The main objectives of the FiRe

Award are; the Promotion of Financial

Reporting Excellence, Fostering

of Sound Corporate Governance

Practices and Enhancing Corporate

Social Investment and Environmental

Reporting.

Mr.Mcfie observed that this year’s

performance was better in the private

sector, while in the government it was

new but on average poor.

We bring you an introduction by Jim

Mcfie, on the 2015 FiRe Award and

the messages that were conveyed

to participants by ICPAK Chairman

FCPA Fernandez Barasa and Chief

Guest H.E. Mr. Erastus Mwencha,

EGH, MBS Deputy Chairperson, of

the African Union Commission.

The Gala dinner was held at Windsor

Golf and Country Club on 23rd

October 2015. Comments by Jim

Mcfie -CHIEF JUDGE

Since its launch in November

2002, the FiRe Award, which is the

only Award of its kind in East and

Central Africa, seeks to promote and

institutionalize transparency, integrity,

and accountability in the financial

reporting process by examining

required disclosures in financial

reporting, corporate governance and

corporate social responsibility.

International Financial Reporting

Standards (IFRS) lay down a large

number of line items that must

be disclosed in a set of Financial

Reports; the Kenya Capital Markets

Authority (CMA) requires several

corporate governance disclosures; and

international best practice in Corporate

Social Reporting is laid down by many

international bodies, the principal one

being the Global Reporting Initiative

(often referred to as the GRI).

Accountants are familiar with IFRSs

laid down by the International

Accounting Standards Board (IASB)

and the CMA but are probably

less familiar with GRI. GRI is an

international independent standards

organization that helps businesses,

governments and other organizations

FINANCIAL REPORTING AND ASSURANCEFINANCIAL REPORTING AND ASSURANCE


understand and communicate their

impacts on issues such as climate

change, human rights and corruption.

Founded in 1997, GRI is a non-profit

organization with its Secretariat in

Amsterdam, the Netherlands. GRI

produces one of the world's most

widely used standards for sustainability

or ecological footprint reporting,

environmental social governance

(ESG), reporting, triple bottom line

(TBL) reporting, and corporate social

responsibility (CSR) reporting. One

primary focus of corporate social

responsibility is the environment.

Businesses, both large and small, have

a large carbon footprint. Any steps they

can take to reduce those footprints are

considered both good for the company

and society as a whole. Businesses

also practice social responsibility

by donating to national and local

charities. Whether it involves giving

money or time, businesses have plenty

of resources that can benefit charities

and local community programs. By

treating employees fairly and ethically,

companies can also demonstrate their

corporate social responsibility.

Another body that deals with

corporate reporting is the International

Integrated Reporting Council (IIRC):

IIRC is a global coalition of regulators,

investors, companies, standard

setters, the accounting profession

and non-governmental organizations

(NGOs). The coalition is promoting

communication about value creation

as the next step in the evolution

of corporate reporting. The IIRC’s

mission is to establish integrated

reporting and thinking within

mainstream business practice as the

norm in the public and private sectors.

The IIRC’s vision is to align capital

allocation and corporate behaviour

to wider goals of financial stability

and sustainable development through

the cycle of integrated reporting and

thinking. The IIRC’s management

have established something akin

to Vision 2030: it is called the

Breakthrough Phase (2014-2017) – it

is the move from the creation of the

International Integrated Reporting

(<IR>) Framework and market testing

to development and early adoption

by reporting organizations around

the world. The IIRC’s objective for

this phase is to achieve a meaningful

shift towards early adoption of the

International <IR> Framework.

Interestingly, Barclays Bank of Kenya

Limited’s latest annual report is

entitled “Integrated report and financial

statements”, a truly magnificent

document which was a finalist in the

Banking Sector category of the 2015

FiRe Award.

In 2014, the Public Sector Accounting

Standards Board of Kenya (PSASB-K)

requested the promoters, the CMA,

NSE and ICPAK, to join the Award

as a basis of monitoring compliance

as provided under section 194 (4) of

the Public Finance Management Act.

The promoters accepted this request

and subsequently, the Board has made

participation by public sector entities

mandatory with effect from the 2015

FiRe Award. The result is that there was

a mammoth increase in the number of

entities whose financial statements had

to be examined by the team of judges.

The 2015 FiRe Award had more

Government entities (133) submit their

financial statements than private sector

entities (121). The success of the FiRe

Award is largely due to the hard work

of these judges; we commend them for

their dedication to the public interest.

Academic research has shown that

it is extremely difficult to discover

financial reporting fraud from an

examination of financial statements

alone. I mention this because a winner

on a couple occasions of past FiRe

Awards was Imperial Bank. But it must

be remembered that the FiRe Award is

all about disclosure; the FiRe Award

is unable to judge the quality of the

numbers in the financial statements.

However, if an entity is already having

financial difficulties, the truthfulness

of the financial reporting is open to

question, and this therefore would

probably lead to the elimination of

its annual report from the selection of

winning reports. But if a company is

doing well, it is impossible to predict

that one day in the future fraud will be

discovered■

COMMENTS BY ICPAK CHAIRMAN FCPA BARASA

Today marks a new dawn in Financial

Reporting in Kenya and in East Africa. For

the first time, the public sector has opened its

doors to the public by participating in the FiRe Award.

Indeed, for the first time in Kenya’s public financial

management history, financial statements of all public

sector entities, for the year ended 30 June 2014,

were prepared on the basis of either IFRS or IPSAS.

These important reforms seek to make Public Finance

Management more efficient, effective, participatory

and transparent resulting in improved accountability

and better service delivery for Kenyans.

The Financial Reporting Award, now in its fourteenth

year welcomes the Public Sector Accounting

Standards Board (PSASB) as a promoter in this year’s

edition of the FiRe Award. We the promoters of

the FiRe Award; CMA, NSE, ICPAK and

now PSASB believe this partnership

is critical in enhancing the

transparency of disclosures

included in the financial

reports of the public sector. I

personally want to extend a

special appreciation to the

Chairman PSASB CPA

Bernard Ndungu for

his commitment to this

process and in ensuring

that the FiRe Award

gets 276 entries from

the public sector. This

adds up to a record

396 entries having

received 120 entries

from the private



sector.

In governments across the world,

public-sector financial systems are

being transformed more fundamentally

than at any time in decades. This is in

response to a number of deficiencies of

government accounting and financial-

management systems. By allowing

governments to hide their liabilities

and the real state of their finances,

traditional government financial

reporting enables governments to pass

off present costs to future generations.

I do not want to be party to such a

generation neither does the profession

I head in Kenya...

Sovereign debt issues that continue

to plague several countries bring to

light the inherent need to improve

government reporting, in particular.

In a connected world, problems

soon flow to other nations. One

reason that high quality public sector

reporting is needed in many countries

is that Government issues financial

instruments which are a very important

part of their financial markets. And

yet, the same focus and spotlight that

is put on the private sector is often not

put on the public sector. Governments

have contributed to the situations they

are facing, by committing resources

without having to account properly

for those commitments. This has made

governments sustain cash outflows

and incur high debt levels that their

real financial position cannot support.

In many developing

nations, the pressure

for high quality

financial management

in the public sector

comes from other

sources as well. The

development partners

and aid agencies need

to be assured that

aid monies are being

used effectively and

efficiently.

There is no holding

back on the message

for adoption of

accrual accounting.

Ian Ball, the former

Chief Executive of the International

Federation of Accountants (IFAC) in

a letter to the Financial Times in the

UK noted, “most governments do

not even know what their capital is,

because their archaic budgetary and

accounting practices do not record and

report assets and liabilities other than

cash. Hard though it may be to believe,

they do not actually know what their

balance sheets look like”.

The accounting profession supports

the reform agenda and acknowledges

strides taken so far. We however

believe more should be done. Below is

our proposal:-

♦ Budgeting, accounting, and

appropriations be done on

an accrual basis; Consider

introducing a charge for the

use of capital - the charge rate

be benchmarked to the private

sector (adjusted for the impact of

taxation); Align the budgeting and

management according to outputs

not inputs. Enhance managerial

discretion for significantly greater

results. This should be pegged

to accountability mechanisms

having “real teeth”, with incentive

mechanisms more systematic and

rigorous.

♦ Reforms to apply some simple

general principles across the

whole of government to achieve

a high degree of internal

consistency and for harmony

across levels of government.

ICPAK supports the adoption and

implementation of IPSASs for public

sector financial reporting. IFAC’s

key arguments revolve around

the public interest (transparency

and accountability); government

performance; and protecting investors

in government bonds. We encourage

the Board to fast track the transition

from IPSAS Cash for MDAs and

County Governments to accrual

accounting. Accrual accounting

is designed to provide critical

information to owners and lenders.

It would not be clear why the

profession is advocating for a faster

transition from the current Cash

Accounting and Current Financial-

Management Practices that satisfy the

current annual compliance interest of

legislators; if I do not highlight certain

shortcomings:-

♦ It fails to accurately represent

the amount of resource

usage. For instance, a large

capital acquisition will distort

expenditure upward in the

first year but the usage of that

asset will not be recognized in

following years;

♦ It fails to take account of future

commitments, guarantees, or

other contingent liabilities. A

liability will not be recognized

until the cash is paid to settle the

debt.

♦ Concentration on cash payments

alone, sometimes resulting in an

unnoticed deterioration in non-

current (fixed) assets.

♦ Control of the inputs purchased

rather than the outputs produced.

♦ Distortion of incentives by

encouraging managers to

underestimate the costs of

programs and to spend their full

annual appropriations.

Has any of you taken time to assess the

pension obligations of the government,

even after issuing a directive that

retirement schemes be converted from

defined benefit to defined contribution

about 6 years ago? Are these factored

in the accounts of the national

government? We challenge the Board

Chaired by my friend CPA Bernard

Ndungu, since all these members are

accountants, to deal with this matter

urgently.

ICPAK and the PSASB also address

matters outside of just standards. As I

stand in front of this delegation, I can

confidently state that the promoters of

FiRe Award were extensively involved

in the development of Mwongozo

code and have been instrumental in

pushing for its implementation in state

corporations. The aim is to provide

a framework for governance in the

public sector (State Corporations).

The governance framework includes

accrual accounting and IPSAS, as

well as internal and external audit

in accordance with professional

standards. We challenge the Executive

and the Legislature to develop a similar

framework for the national and county

governments. Training is particularly

important and so are partnerships.

We are seeking partnership with

stakeholders to join our Centre for

Public Finance and Tax with our key

focus being training of public sector

accountants on effective and efficient

management of the revenue and

expenditure side of public finance.

Key among these is implementation of

IPSAS. Our recent MoU with ACCA

is aimed at providing comprehensive

IPSAS training as part of an overall

capacity building strategy and

development plan.

The key messages are:-

Globally we are witnessing a call to

strengthen public sector accounting,

auditing and financial management.



As a country, we must play our part;

African countries, would do well to

understand the issues, heed the warning

signs and ensure they do not fall into

the same traps. If accrual accounting

is the only acceptable standard for the

private sector, then surely it has to be

for the public sector.

If auditing of financial statements

of large entities is expected in the

private sector, it should apply to

government institutions. Such a

framework provides the basis for

strong governance; effective decision-

making; high performance in service

delivery; and a sustainable future. The

will of the government is crucial for

it to succeed. The Capital Markets

Authority is here to help; the Nairobi

Securities Exchange is here to help;

the Institute is here to help; the

development agencies are there to

help.

The destination is clear; the way

forward is well lit; let the journey

begin;

Finally, I would like to address a special

word of thanks to all the participating

organizations. In particular, I would

like to thank the promoters; CMA,

NSE, PSASB and ICPAK teams for

ensuring that this award continues

to gain momentum, our judges who

have committed their time and will

doubtlessly contribute to the success

of this event by the high-quality input,

and our sponsors for their undoubting

partnership. I wish every participating

organization success and wish to

commend the winners in advance and

look forward to improved reporting by

entities■

COMMENTS BY MR. ERASTUS MWENCHA-CHIEF GUEST

H.E. Mr. Erastus Mwencha, EGH, MBS Deputy Chairperson, of the African Union Commission was the Chief Guest at the FiRe Award Gala Dinner. He congratulated the winners and participants of the event.



The theme Championing

financial reporting,

corporate governance and

social responsibility in East Africa’ was

appropriate. This year as you all know

the United Nations launched 2030

Agenda for Sustainable Development

Goals and to which is embedded in

Agenda 2063 of the African Union as a

vehicle for its implementation.

The FiRe Award is a good platform for

promoting accountability, transparency,

and integrity in compliance with

International Financial Reporting

Standards as well as disclosures on

governance, social and environmental

reporting by private, public and other

entities in East Africa.

Today I would like to convey four key

messages:

1. Africa’s economic growth and competitiveness is good and improving.

♦ Africa is growing fast. GDP

more tripled than in the last

15 years from $600 billion

to $2.3 trillion. As an

emerging economy, Africa

is increasingly becoming

an attractive destination

for investors, thanks to its

geography, rich natural

resources and youthful

population.

♦ Growth was also spurred by

buoyant commodity prices in

export markets like China.

♦ The high growth rates that

Africa achieved, averaging

5.5 percent in the last decade

was due to, a large extent,

prudent macro-economic

policies and good governance

in general.

♦ Foreign Direct Investment

(FDI) is on the rise in

Africa at a time when it is

diminishing in other parts of

the world, and that is because

Africa has one of the highest

rates of return on investment

in the world, exceeding 12%

in some sectors.

♦ Our intra-African investment

does not only exceed FDI

inflows into the continent, but

has also grown in the last year

when FDI was stagnant.

2. We are not there yet. We aspire for a minimum of 7% growth rate, and need good corporate governance.

♦ The African economy is not

transforming and growing

enough. We need a minimum

of 7% growth rate to engender

transformation and to create

jobs.

♦ Prudent macro-economic

policies and good corporate

governance are critical to

reducing risk associated

with investing in Africa and

helps the Continent to access

capital at a lower cost. If any

company, public or private,

needs to borrow or raise

equity in the capital market

to finance its business, the

level of its risk is a major

component of its capacity

to attract investment or the

interest rate at which it can

borrow. This “risk” is not

only that of the company,

but also of the country or

countries in which the entity

operates. Therefore, it is just

as important for governments

to institutionalize good

financial reporting standards

as it is for companies to adopt

good corporate governance

practices.

♦ Recent trends show worrying

signs of rising debt that is

not sustainable. This is likely

to jeopardize the growth

momentum. The recent Euro

crisis was to a large extent

due to non-observance of

regional standards. And also

not too long ago, in 2008 to

be precise, the world was

thrown in a financial crisis

whose genesis was corporate

greediness that degenerated

into a global economic crisis.

♦ Good corporate governance is

an important component as a

building block for an enabling

and predictable environment

for intra-African trade and

investment.

♦ Regional integration is

facilitated through best

practices because companies

are eager to invest across

borders if they can find

a comparable level of

predictability in the business

environment on the other side.

Africa’s trends are showing

readiness to develop its own

multinational companies, but

that is hard to achieve without

a robust and transparent

enabling environment that is

harmonized across borders.

♦ Control of illicit financial

flows that have robbed the

Continent of critical resources

is imperative. A recent study

revealed that illicit flows

from Africa could be as much

as US $50 billion per annum.

This is approximately double

the Official Development

Assistance (ODA) level.

Some of these illicit flows are

due to transfer pricing and

other practices.

♦ We are of course aware that

Africa is not yet where it

aspires to be with regards

to good governance. The

Doing Business Index of the

World Bank sadly indicates

that the vast majority of

African countries fall under

the bottom lower half of the

country rankings. The good

news is that East Africa has

some notable success stories.

Rwanda for example, which

not too long ago suffered

one of the most destabilizing

tragedies resulting in a

catastrophic number of

fatalities, is ranked number

46 out 189 countries on the

Doing Business Index.

Inspiring cases like Rwanda are

enlightening and motivating, but

sustainable growth of an entire region

is not made by singular instances

of success. Considering that the top

performers on the Doing Business

Index are also the top recipients of

FDI in the world, and knowing that

it is not by chance, rather due to solid

connections between good governance

and attractiveness to investors, we

can be confident that our region will

achieve sustainable growth by adopting

and enforcing harmonized financial

and corporate governance standards.

3. Investing in social and environmental responsibility is the right approach for the Continent.

♦ The 2030 Agenda for

sustainable development

and Africa’s Agenda 2063’s

which enjoin us to aspire for

“prosperity based on inclusive

growth and sustainable

development”. These goals

cannot be achieved without

attracting responsible

investments. Behaving

responsibly towards society

and the environment is a

win-win solution. It benefits

society as well as the business

itself.

♦ In this regards, we must

protect our environment. We

have seen malpractices that

destroy environment and do

not give enough back to the

local communities. To address

these challenges, the African

Union in collaboration

with the United Nations

Economic Commission for

Africa (ECA) has developed

an “African Mining Vision”.

We are glad that a number of

countries have domesticated

this vision in their domestic

laws. We call upon others

to do so in order to protect

this and future generations.

This is what Sustainable

Development Goals are also

about.

♦ Corporate responsibility

reporting is also beneficial for

businesses and organizations,

both public and private. It

enables business to measure

its performance and therefore

to judiciously put in place best

practices in, waste reduction,

recycling, and other cost

saving and environment

protection measures.



There are thousands of

examples of companies that

have discovered process

enhancements by examining

their corporate responsibility

reporting data and developing

quality management and

continuous improvement

programs to effect lasting

change. Companies have

also built a good reputation in

the market by being socially

responsible. These attributes

also enhance their market

share as well as their credit

worthiness.

♦ In this area, Africa also has

some bright examples, such

as South Africa, whose top

100 companies engage in

corporate responsibility

reporting, which is due to

the Government’s Corporate

Governance code that came

into force in 2010.

4. Africa’s regional integration path starts with and is also sustained by harmonized standards:

♦ The African Union has

taken significant steps

to institutionalize good

corporate governance.

One of our most recent

successes is the adoption

of the International Public

Sector Accounting Standards

(IPSAS). IPSAS consists of

32 accrual-basis standards that

seek to improve consistency,

comparability and reliability

of financial statements; as

well as enhance oversight and

internal control. IPSAS is a

voluntary system, but it helps

Africa to conform to a set of

transparent and harmonized

financial governance system.

So far we are happy with the

results obtained. Out of the

54 AU Member States, 14

have so far adopted or are

implementing IPSAS.

♦ We hope that steps taken

by the AU and others will

be disseminated so that we

all operate on a common

platform. In this way it will be

possible to integrate financial

markets and contribute

towards greater intra-African

trade and investment. We in

the African Union applaud

the East African Community

to talking steps to encourage

cross-country listing of the

stock Markets. The same

integration is needed for

capacity building institutions

like ICPAK which should

operate at continental level to

facilitate mobility of labour in

Africa.

♦ When Africa harmonizes

standards, domesticates

and enforces them across

borders…. only then, can the

Continent be a key player in

the global arena and even be

able to contribute to setting of

global standards.

In closing I wish to leave you with one

thought: good governance; social and

environmental responsibility make

economic sense! Let us not focus solely

on what it will cost in terms of time,

effort and money. Let us think of what

we are building for future generations

of Africans by means of economic

advancement and global leadership.

I would like to thank you all and also the

Capital Markets Authority, the Institute

of Certified Public Accountants

of Kenya, the Nairobi Securities

Exchange, and the Public Sector

Accounting Standards

Board of Kenya, who

are the promoters of this

award, for their role in the

FiRe Award and the work

they are doing in their

respective portfolios■

FINANCIAL REPORTING AND ASSURANCE


PICTORIALPICTORIAL

14TH EDITION OF FINANCIAL REPORTING AWARDS - GALA DINNER

MANAGEMENTMANAGEMENT

THE ROLE OF STRATEGIC INTENT IN MANAGEMENT OF PUBLIC & PRIVATE ENTITIES

Based on the phrase if wishes

were horses everybody

would ride, we all know

that management in today’s era in all

sectors tend to embrace bold opinions

beyond the limits of existing resources

and capabilities on how best to remain

competitive and how to outcompete

their competitors given the continious

challenges ranging from porters five

forces e.g. threat of new substitutes,

threat of new entries, supplier power,

rivalry and buyer power, changes in

customer tastes and preferences and

continuous innovations in the business

industry. To understand how best

to remain competitive and attain a

competitive edge over others in today’s

challenging business world, we need

to examine what strategic intent is and

how it is of benefit if executed

well to both private and public

entities.

Strategic intent expresses the

leadership position a company

wishes to command along with

the path towards it.

(Macmillan and Tampoe, 2000),

strategic intent is concerned

with the ends and objectives

of the enterprise and combines

vision and of the future, with

the intent to make that vision a

reality.

From the success stories of

companies such as Toyota

,Canon and Komatsu where

Komatsu wanted to outperform

Caterpillar, Canon sought to

beat Xerox and Honda wanted

to become an automotive

pioneer like Ford we

understand that strategic intent

encompasses clear mission,

vision and objectives and the

same competition has emerged

in the banking sector where

banks are improvising new innovations

to stay smarter but at the end some

banks just imitate other banks products

by adding few features e.g Mpesa for

Safaricom and Kenya commercial

bank and Mkesho and Equitel for

airtel and Equity bank. The same is

seen in the mineral water companies,

soap industries, mobile phones,motor

vehicles andother products.

Many companies are expending

enormous energy simply to reproduce

the cost and quality advantages

that their competitors are already

enjoying. This may be evident when

Kencel changed its name to Celtel

then Zain and currently Airtel inorder

to gain competitive advantage in

telecommunication industry but this

could not work well as Safaricom has

continuously remained the super power

(supplier power) in communication

industry as I believe this can be

articulated towards having a clear

strategic intent that embraces the

culture, vision, mission and customer

changing needs. Companies like

safaricom have continuously tailored

their products in line with customer

changing needs also by adhering to

corporate social responsibility like

the marathons e.g Lewa marathon,

Serikali Saidia which is currently

everyone’s skiza tune , Shangwe

mtaani, Bonyeza ushinde e.t.c which

at the end safaricom might be having

a target to achieve from each which is

salient in nature.

JANUARY - FEBRUARY 2016 27THE ACCOUNTANTJANUARY - FEBRUARY 201626 THE ACCOUNTANT

Strategic intent encompasses an

active management process that

includes focusing the organization’s

attention on the essence of winning ,

motivating people by communicating

the value of the target, leaving room

for individual and team contribution,

sustaining enthusiasm by providing

new operational definitions as

circumstances change , and using

intent consistently to guide resource

allocation, Gary Hamel and

C.K.Prahalad (july-august,2005 issue).

Strategic intent provides consistency

to short term action, while leaving

room for reinterpretation as new

opportunities knock the door. An

example at Komatsu, encircling

Caterpillar encompasses a succession

of medium –term programs aimed

at exploiting specific weaknesses

in Caterpillar or building particular

competitive advantages. When

Caterpillar threatened Komatsu in

Japan, Komatsu responded by first

improving quality, then driving down

costs then cultivating export markets

and then underwriting new product

development.

Strategic intent sets a target that

deserves personal effort and

commitment. Companies with a clear

strategic intent, top management

is more likely to talk about global

market leadership and not how they

have maximized shareholder’s wealth

as indeed market leadership guides

shareholders wealth.

It also gives employees the only goal

that is worthy of commitment: to unseat

the best or remain the best, worldwide.

Most businesses with a smart strategic

plan but without a clear strategic intent

usually find themselves in problems

even after enjoying market leadership

include; Pan Paper mills, Mumias

Sugar Company, Walmat, currently

Kenya Airways, Uchumi supermarket.

In reference to this more blame

issues have been raised ranging from

corporate mismanagement to consumer

switching costs but I believe it’s the

role of strategic intent that failed to

be utilized fully. And this would have

worked well if they would have known

that the question is not ‘How will next

year be different from this year but

what we must do differently next year

to get closer to our strategic intent’’.

It’s only with carefully articulated

and adhered to strategic intent will

succession of year to year plans sum

up to global leadership.

We can use strategic intent as a guiding

tool on how to satisfy employee

needs and improve on customer

demands which at the end will ensure

organizational growth as growth

depends on the inventive capacity of

individuals and small teams than on

ability of top management to aggregate

the efforts of multiple teams toward an

ambitious strategic intent.

Strategic intent characteristicsHamel and Prahalad provided the

following attributes of strategic intent

e.g

♦ Sense of direction-It should

be a view of the future

conveying a unifying and

personalizing sense of

direction.

♦ Sense of discovery-A

strategic intent is

differencitated; it implies a

competitive unique point of

view about the future.

♦ Sense of destiny- Strategic

intent has an emotional

edge to it; it is a goal that

employees perceive as

inherently worthwhile.

A typical intent process consists of

three important stages;

Step 1: Set the strategic intent- Involves

having all the three characteristics

stated above

Step 2: Set the challenges- find

appropriate challenges and

communicate them to the workforce.

These challenges are the means to get

into the strategic intent. E.g suppose

strategic intent of company A is to beat

company B then the strategic challenge

will be to come up with a new product

with a certain target price.

Step3: Empowerment of strategic

intent-Key to any strategic intent is a

matter that involves everybody. The

task of Top management here will be

to capture the wisdom of the anthill,

to challenge the traditional downward

communication style to an upward

communication stream of new ideas

coming from the organization.

Private and public entities need to

revive their thinking by embracing

the need of a clear strategic intent to

enable them remain sustainable given

that their financial records need to

be prepared on continuous basis as

organizations with clear strategic intent

interms of vision mission and goals

at most time do have a competitive

advantage over others. A company like

Coca-Cola has continuously remained

strong in terms of manufacturing sodas

as much as there’s stiff competition in

terms of threat of new substitutes from

pepsi, malti e.t.c. Due to its strong

supplier power it has managed to

diversify its product line by engaging

in manufacturing of Dasani drinking

water, Alvaro and Novida products and

this can be attributed to strong strategic

intent that is customer focus and aims

at satisfying the global market demand

despite the changing consumer needs

and rampant changes in government

policies and or laws.

With the knowledge of contingency

concept which states that no system or

structure is suitable for all situations

as the world is dynamic and the

future is uncertain I tend to believe

that strategic intent should be utilized

on short term basis giving room for

adjustment and if executed well may

make an organization and or entities

both private and public to prosper.

All entities should understand the

internal environment and the outside

business environment when planning

to develop a strategic intent with a

keen look at the entities structures and

various levels of strategy execution

and also by understanding the

ongoing debate on ‘whether strategy

follows structure or structure follows

strategy’and by understanding this, a

clear self driven strategic intent may be

developed that sells itself .Therefore in

conclusion strategic intent plays a key

role in management of both private and

public entities■CPA Maroa Julius Mwita CPA-K, BBA (accounting) and MBA (Finance) -Maseno University on going.Accountant Migori county government.


28 THE ACCOUNTANT JANUARY - FEBRUARY 2016 29THE ACCOUNTANTJANUARY - FEBRUARY 2016

31THE ACCOUNTANTJANUARY - FEBRUARY 2016JANUARY - FEBRUARY 201630 THE ACCOUNTANT


5 WAYS TO LEAD WITH EMOTIONAL INTELLIGENCE AND BOOST PRODUCTIVITY

What is Emotional Intelligence?

Emotional intelligence is the

ability to perceive, control

and evaluate emotional

clues, hints or insuations.

Employees today are much more aware

of whether or not they are a good fit

in their workplace culture and they

want their leaders to be more mindful

of their needs. In general, employees

have become more sensitive about

how to best co-exist in a workplace

environment that allows them to be

who they naturally are.

Employees are tired of playing games

and just want to be themselves. As

such, they are managing their careers

and looking to advance by searching

for jobs that truly fuel their passion,

fulfill their desires, and ignite their

real talent. For most, today’s

economic landscape has made the

career management journey extra

challenging. And beyond career

advancement opportunities, people

want their supervisors and leaders to

be more in touch with who they are

as people (not just as their colleagues)

to assure that their career track is in

proper alignment with and supports

their personal and professional goals.

Leaders are so focused on remaining

relevant for their own personal gain

that they have forgotten to be more

sensitive about how to best serve their

employees (the people who help give

them relevancy). In the end, leaders

become more valuable when they

can prove to increase productivity,

employee engagement and results

by creating a teamwork environment

that gets the best performance from

everyone. This requires leaders to

be strong mentors as well as sponsors

who can help their colleagues better

navigate workplace opportunities and

catapult their careers.

Beyond the traditional leadership roles

and responsibilities, today’s workplace

uncertainty requires leaders to be much

more sensitive about what matters most

to their employees. Too many leaders

assume that their colleagues have the

same drive to succeed and willingness

to sacrifice in order to advance as they

do. Everyone is different and leaders

must be more mindful to embrace those

differences and strategically leverage

them to create and sustain unique

opportunities within their departments

and for the business.

The bottom line is that leaders must be

more emotionally intelligent to be more

effective and efficient at maximizing

outcomes and desired results. Here are

5 ways to get started.

1. Care About PeopleCaring is a simple thing to do, but

not always expressed or genuine in

its delivery or tone. Leaders need to

balance the head and the heart. This

means that leaders can’t always be so

intense about what is required from

their employees. Intensity requires

proper timing and focus to build and

keep momentum. As leaders, we need to

show maturity along with our passion,

and be more compassionate in order to

balance what the job requires with the

human spirit. Employees don’t want to

feel like a herd of cattle – but as people

who are being appreciated for their

hard work and effort. For the most

part, employees don’t need a boss that

holds their hand; they just need to be

reminded of what is expected of them.

If this is done with proper tact and

good heartedness, people will perform.

Make the extra effort to say thank

you and be consistent about it. Take

the time to mentor and / or sponsor

employees who have earned the

opportunity. Show that you care about

people. This gesture is more powerful

than you might think in enabling you

to achieve your leadership goals and

objectives.

2. Embrace Differences to Make a Big DifferenceWe live in a world were differences

in people are more apparent than ever

before. People want to be authentic

and appreciate those who embrace

their differences. Today’s leaders

must be more sensitive about how to

manage and leverage differences in

people to assemble great teams and

assign unique talents and abilities

to certain situations. Be smart and

look for common ground within the

differences between people.


Don’t view differences

as a melting pot, but

rather as a mosaic of

opportunities.

Our differences fuel our

unique perspectives and

cultivate innovation

and opportunity.

Some might call this

“diversity” – but that

word has become

associated with advocacy. I am not

suggesting that you must advocate for

one’s differences – but rather, learn

how to embrace and leverage those

differences when people bring their

unique ideas and ideals to the table.

The more inclusive you are, the wider

the breadth and depth of opportunities

around you.

3. Help Employees Experience SignificanceLeaders should not get caught up

in converting their employees to

be more like them – but rather in

motivating employees with how the

job can benefit their life, not just the

bottom line. Allow your employees to

appreciate and experience the human

side of what success can bring to their

families and life outside of work.

Today people want to feel as if they

are creating an impact, that they can

make a mark for themselves and those

around them. Lead your employees

in ways that allow them to be both

successful and significant at work.

Significance is the force that changes

people’s lives and perspectives on

what matters most.

4. Be Accountable Like Everyone ElseJust because you are in-charge doesn’t

mean that you can’t be an equal. This

means that as a leader you must hold

yourself equally accountable and

enforce the same rules of engagement

that you expect from your employees.

The best leaders always do – but

in today’s workplace this behavior

must be more deliberate. Employees

appreciate leaders who share their

perks and privileges. They want their

leaders to be a more integrated part

of the team; more available and less

mysterious.

Admit when you are wrong and be

transparent in how you lead others.

Employees want to know that you can

be trusted; revealing the areas where

you can improve makes you more real

and genuine. Leaders have historically

played the game of authority and

allowed their titles to influence the

conversation and their attitudes. Be

accountable, be an equal, and be

trustworthy. Employees follow and

support leaders who are approachable

and relatable; those who will roll-up

their sleeves and fight the battles with

them.

5. Be Mindful of Their NeedsIf your employees are not working at

or close to their capacity, then you are

not doing your job as a leader. Your

sensitivity radar must always be on.

This means that you are equally mindful

of your employees reaching their full

potential as you are about yourself.

Everyone has the ability to improve

and increase their performance and

productivity. However, improvements

are a consequence of continuous

feedback, recommendations and

suggestions.

Be a better leader and get the most

production from your employees by

being more mindful of their needs. Just

because the department’s performance

has exceeded the plan doesn’t mean

that each employee can’t continue to

grow and mature in their work.

A team is more powerful than the sum

of its parts – but each part must be

continually refurbished and renewed in

order for the team to sustain its power.

Be more sensitive about your

employees and their needs – open

your eyes wider and begin to see

opportunities previously unseen■

MANAGEMENT

35THE ACCOUNTANTJANUARY - FEBRUARY 2016

GOVERNANCE


With the ongoing debate

on ‘two thirds gender

rule’ in Kenya, one

cannot help but wonder why there

seems to be proponents and opponents

to an issue that is core to the very

development of this country. That is

the exclusion of half the nation’s talent

in decision making positions. The fact

that Africa can neither achieve nor

sustain its rising economic growth

(Economist 2011) is a concern not just

regionally but globally as well.

In the recently released report on

‘gender inclusive board room’, by

the African Development Bank titled

‘Where are the Women’, Kenya is

reported to be top of its peers in Africa

even though at a dismal 19.8% in the

12 African countries studied. South

Africa follows at 17.4% while Ivory

Coast has the lowest percentage of

5.1% of women on Boards in Africa’s

top listed companies (AfDB 2015).

The AfDB report recommends among

others that ‘women themselves

must be proactive in applying

for board positions’. A view that

seems well supported, given that

women contributions to board and

organizational effectiveness is no

longer in doubt. Adams and Ferreira

(2009) confirmed this by studying the

meeting attendance and monitoring

effort of the boards in the US firms.

‘‘In addition to structural

composition of size, skills, experience and performance,

the ‘soft’, intangible elements such

as the quality of board meetings,

information sharing, critical

debates and interpersonal dynamics are

now considered essential for the

good functioning of boards’’

(Van den Berghe and Levrau, 2004;

Roberts et al., 2005). These ‘soft’

GOVERNANCE

JANUARY - FEBRUARY 201634 THE ACCOUNTANT


elements are generally associated

with women. How directors interact is

critical to the board’s overall success

just as the skills set the directors bring

with them (Wallace and Zinkin 2005).

Boards are particularly responsible

for corporate governance and exist as

a distinct organ to ensure corporate

stewardship (Adams 2002). Although

other stakeholders get representation

on boards, the majority board members

are ideally selected by business owners

to manage the agency problem, defined

in business as separation of ownership

and control (Shleifer and Vishny

1997) to ensure that managers, who

are agents, act in the best interest of

the owners. Supporting the agency

problem view, Carter et al. (2003)

put forward that when boards are

gender diverse, their ability to monitor

top management is enhanced and

further, that increasing the number of

female directors may increase board’s

independence since women tend to ask

questions that male directors may not

ask. However, in instances where the

CEO is driving board appointments,

this argument raises a question of

whether the increased monitoring by

the board would be a motivator to the

CEO or not.

Decades ago, it was quite ceremonial

to sit on boards. This has since changed

and being a board director is a serious

responsibility that includes appointing

senior executives and setting

corporate strategy. Board members

are increasingly required to steer

organizations in complex business

environments. PwC (2011) identifies

key concerns for corporate Boards as

strategy, risk and ethics, against which

board effectiveness can be assessed.

These roles are supported in other

studies particularly for non-executive

directors (Weir and Lang, 2001 and

Dixon et al. 2005) and summarized

as performance monitoring, strategy

development and conflict resolution.

This explains Lord Davies’ emphasis

that boards should be made up of

competent high calibre women and

men who together offer a mix of skills,

experiences and backgrounds (Davies

2011).

Association of British Insurers, UK’s

leading shareholder group (ABI 2011)

has claimed that including women

on boards is one of the three key

issues that make an effective board

in addition to succession planning

and board evaluation. Similar studies

in the UK have indicated that gender

diverse boards pay more attention to

risk management (TCAM 2009) and

lowers companies’ risk of insolvency

and bankruptcy (Wilson 2009; Wilson

& Ali 2009). Good governance

behaviours have been found in gender

balanced boards where performance

monitoring and evaluation was given

priority, including non-financial

measures (Brown et al. 2002). This

study by Brown et al (2002) reviewed

performance of 141 organizations both

listed and privately held and found that

female directors contribute to board

unity and independence. Some authors

(Turnbull, 2002; Currall & Epstein

2003) on analysing the scandals that

befell Enron and WorldCom opine

that decisions were made without

stakeholder consultation, an aspect

they argue women would have

done better in while anticipating

and managing the crises. Other

researchers in support of this view

mention improved governance

GOVERNANCEGOVERNANCE

through board independence (Fondas

& Sassalos 2000), quality of board

meetings (Izraeli 2000), more strategic

protocols and organization (Storvik

and Teigen 2010), improved intra-

board communication and overall

management style (Terjesen and Singh

2008), ethics (Frank 1997, Campbell

and Minguez-vera 2008) and

reporting (Barako and Brown 2008).

Best practices in governance are

also increasingly supporting gender

diversity (Novak and Shoun 2012).

Indeed, male CEOs also recognized

the unique and positive contributions

that female directors bring to the board

(Burke 1994).

In line with these views, companies

have been in the recent past frantically

looking for women to sit in their

boards. Board seat being a coveted

opportunity, I also get questions from

aspiring women directors how to

access and participate in boardroom

matters. Despite all the guidance

shared so far on this topic, it’s now

important for the board aspirants to

decide whether that board seat is right

and consider seriously any invitation.

Further, board members now face

greater scrutiny and pressure from

shareholders. Women would better

ask themselves a few questions before

accepting board positions. Some of the

key considerations include whether

one is passionate about the business

of the organization. In the absence of

a ‘passionometer’, the women must

have the energy and deep conviction in

the business, in addition to knowledge.

Board work is teamwork so women

should see that they can work with

the existing members since board

members spend a lot of time together

or discuss the same issues. Serving on

boards can be time and travel intensive

so geographical location is a good

practical point to consider.

When the serving women contribute

effectively to the boards, it will sure

open the pipeline for other women

and we’ll soon see a reversed trend on

board gender diversity■

CPA Millicent Omukaga is a

Consultant in Financial Sector

Development and a PhD Researcher

at Erasmus University of Rotterdam

in the Netherlands. She serves on the

AWAK Board among others and is an

Election Scrutineer for ICPAK. CPA

Omukaga is also Commissioner for

University Education in Kenya. She

can be reached on [email protected]


Natural resources are indeed

a window of opportunity

for economic development.

The revenues derived from the

exploitation of natural resources can

assist the National Government and

County Governments to alleviate the

binding constraints that governments

in developing countries often face

when endeavouring to transform

their economies. Many developing

countries are endowed with exhaustible

natural resources- such as oil, gas,

minerals and precious gems – that, if

properly managed, could help them

reduce poverty and sustain growth.

Countries with oil, mineral or other

natural resource wealth, on average,

have failed to show better economic

performance than those without, often

because of undesirable side effects.

The experiences of resources- rich

countries for example those rich in

minerals suggest that resource wealth

is not always a blessing. It can in fact be

a curse. There are several explanations

as to why the exploitation of natural

resources could have negative

consequences for the economy. One

is the corruption of political and

public administration elites. This can

be seen on the basis that revenues

derived from natural resources always

flow directly through government’s

coffers, these elites may be able to

take advantage of weak checks and

balances to misappropriate those

riches for themselves and channel

them elsewhere. Natural resource

wealth also allows less than democratic

governments to buy off opposition,

avoid accountability and prevent

transparency. Natural resources make

it more profitable for the elites to hang

on to power and block the development

of an open society.

Natural Resource Curse should not

be interpreted as a rule that resource-

rich counties are doomed to failure.

The question is what policies to adopt

to increase the chances of prospering.

It is safe to say that destruction or

renunciation of resource endowments,

to avoid dangers such as the corruption

of leaders, will not be one of these

policies. Even if such drastic action

would on average leave the county

better off, which seems unlikely, who

would be the policy-maker to whom

one would deliver such advice?

A blessing which can be argued is

that, natural resources are critical

components of many countries’

export and government revenues. For

example, they account for an important

share of total exports in nearly half of

the countries in sub- Saharan Africa

(IMF,2012a). Also worth noting, is

that natural resources exploitation

makes it possible for the emergence of

global trade in the country which is an

advantage, yet the trade gives birth to

multinational corporations who have

unfettered access to capital and labour

at the expense of the citizenry.

In the foregoing, the multinational

corporations do manipulate prices

and further take advantage of

the loopholes in tax codes in the

developing countries. In view of this,

we need to take into account all the

loopholes which might have been

in our company’s act, Cap 486, and

to strive to protect our Tax systems,

Companies when deliberating on the

legislation in respect to companies and

insolvency Legislation (Consequential

Amendments) Bill, 2015. It is worth

noting that in July 2013, the group

of Twenty Advanced and Emerging

NATURAL RESOURCES IN KENYA; CURSE OR BLESSING TO COUNTY GOVERNMENTS?By CPA Charles Okeyo OwuorVice chairman, Central Rift

nyakwarogara @gmail.com


COVER STORYCOVER STORY

Economies (G20) adopted an action

plan to rein in tax avoidance by

multinational corporations, drawing

from recommendation in a report

by the organization for economic

cooperation and Development (OECD)

2013. Further, some multinational

corporations practice what is known

as “transfer pricing ” or “profit shifting” which involves attributing

a corporation’s net profit or loss before

tax to opaque jurisdiction where taxes

are low.

Countries endowed with natural

resources face the challenge of

managing their economy due to price

volatility, where commodity price

swings can be large and long lasting,

thus it could be hard to forecast prices.

The transmission of these swings to the

local economy can be averted through

good fiscal frame-works such as

hedging instruments, well-developed

domestic financial markets, and access

to international financial markets.

It is recognized legally that developing

countries who are favoured to have

natural resources to require affiliate of

multinational corporations involved in

the exploitation of their resources to

remit a fair amount of tax and to avoid

manipulating their capital structure

for tax purposes. To be careful not

to be in such practices, our county

governments in collaboration with the

National Government are advised to

put in place a thin capitalization rule,

which specifies a “safe haven” debt

–to-equity ratio that limits the amount

of deductible interest for tax purposes.

This is for purposes of countering

cross-border shifting of profit through

excessive debt and therefore aims to

protect a country’s tax base. The thin

capitalization rule helps to promote

more equity finance in the resource

sector together with the improvement

of the prices of countries’ natural

Resources assets (development of

domestic stock market).

The thin capitalization not

only protects the tax base of

resource-rich counties, but

can also assist in linking the

financial development of these

counties with the exploitation

of their resources.

Vision 2030 envisages the

resources sector to be the

main gate in our county

governments. County

governments should therefore

try to collect as much revenue

as they possibly can from the

hefty profits to be generated which

can be seen to glitter from darkness in

this sector while remaining attractive

to investment. As we are aware that

exploitation of natural resources,

particularly minerals, oil and gas

requires much technical expertise,

which multinational corporations are

not keen on sharing, we must therefore

urge both the National and County

governments to invest heavily on

research training and development

so as to tap this area effectively and

efficiently. In view of the above

discussions, some of the ideas that

most merit consideration by counties

rich in oil or other natural resources are

but not limited to the following;

♦ Strengthening the business climate

by simplifying the tax system.

♦ Improving the enforcement of

contracts and access to credit

information.

♦ Strengthening entry and exit

regulation to facilitate the re-

allocation of resources to new and

high productive sectors.

♦ Include in contracts with foreign

purchasers clauses for automatic

adjustment of the price if world

market conditions change.

♦ Hedge export proceeds in

commodity futures markets.

♦ Denominate debt in terms of

commodity prices.

♦ Avoid excessive spending in boom

times; allow deviations from a

target surplus only in response

to output gaps and long-lasting

commodity price increases, as

judged by independent panels of

experts rather than politicians.

Whether natural resources are a

blessing or a curse, the effectiveness

of public investment especially natural

resources exploitation depends on

the institutional factors, such as the

capacity to select; implement and

evaluate projects. It is essential, then,

to have strong public management

system including the ability to provide

forecasts of resource revenues, the

capacity for medium term budgeting,

good cash and liability management,

and transparency in the collection and

utilization of natural resources revenue

through appropriate accounting,

reporting and auditing. We Kenyans

and like other countries like Uganda

and Mozambique who developed their

new discoveries the other day, need

to learn from each other and from

other countries’ challenges to manage

the volatile revenues generated

from abundant natural resources.

Policymakers can spur growth and

fight poverty by ramping up investment

spending as long as they are mindful

of their economy’s capacity to absorb

such investments. Needless to say,

policies and institutions have to be

tailored to local circumstances, county

by county, but with good intentions

and innovative thinking■

COVER STORYCOVER STORY

41THE ACCOUNTANT40 THE ACCOUNTANT JANUARY - FEBRUARY 2016 JANUARY - FEBRUARY 2016


INSIDE ORGANISATIONS- EMPLOYEE ISSUESBy CPA Anne Komira, Email: [email protected]

The causes of incompatibility

between employers and

employees resulting to

separation and its impact to the

employer

Personally, I have worked for

several employers and before I sign

every other employment contract, I

normally anticipate I would stay a

little longer than the actual period I

last in one organization. The practical

employment life may not be as easy as

we had imagined during the olden days

when we were school going children.

Contrary to our expectations, there

seems to be a number of unique issues

with every employer which are silent

and employees only get to learn about

them after joining the institution. A

number of these factors make it very

hard for employees to fit and stick

in the organizations and those who

persevere only survive in discomfort.

No wonder, the unending job vacancies

in institutions, the health issues like

high blood pressure and ulcers, and

the increased job hopping from one

employer to the other being the trend

in modern employment life.

As an employer, have you reviewed

your staff turnover rate? As an

employee, how many employers

have you worked for and have you

evaluated the cost benefit analysis?

Was the move worthwhile? How

many times have you re-considered

poaching your ex-employees and as

an employee, how many times have

you re-considered going back to your

previous employer? What is this that

employees are looking for in every

organization that employer are unable

to provide? Why are employers always

recruiting instead of developing the

employees they have?

Our employment life has a direct impact

on how our characters are shaped

and influences our personal life. The

unending rat race in every organization

leaves employees who cannot manage

a number of these discomforts look for

alternatives in other employers with

the assumption that the grass on the

other end may be green or they opt to

go on their own into entrepreneurship.

HR experts make a joke out of this that

once employees are in the organization,

the grass is seen to be brown and those

outside view it to be green but the

doors are locked once the employees

are lured to join the organizations.

Regardless of situations, the employee

may be forced to struggle within for a

while before another door can open for

them to move out.

After serving a number of employers,

one fact seems to be very true, that all

employers big or small have issues.

What are not constant are the nature

of the issues and the magnitude of

how they affect individual employee’s

personal life. One reason why

employees will keep moving even after

they have the knowledge of the issues

each employer has is to have a change.

It will not help to keep complaining

about the same problems, but

complaining about different problems

will make you think differently,

balance different environments and

adapt well in problematic areas.

Most successful employees are

job hoppers. They thrive in all

environments and will normally be

viewed as good employees and liked

by their supervisors due to their

dedicated effort. They seem to have

a lot of effort and work like they

are slaves and have never gotten a

better employer than the one they are

working for. The HR personnel least

monitor these employees as they will

rarely complain about their personal

welfare but will always remain

focused on the organization goals.

To the dismay of the employer, these

employees will normally pull out that

surprise resignation letter when they

reach their peak in the organization

and do not seem to see anything to

keep them around except the unending

organization politics, increased

work pressure and expectation,

discriminating reward systems among

others.

A number of reactions normally come

in such circumstances like envious

colleagues who saw the thriving

employee as a threat would through a

celebration bash as the enemy is on the

door steps. HR experts would see the

organization loss as they would have to

go through the hiring process again and

if the role is one not popular to many,

WORKPLACEWORKPLACE


they are sure they will hire between

three to four employees before they

can get one who can fit in the role.

There are financial losses in terms of

productivity of the new employee who

has to go through the learning curve

and is prone to make mistakes. Fraud is

likely to take place around this time as

new employees are not well conversant

with the controls in the system and

those who have used the system long

enough may explore the opportunity.

HR managers have to struggle to

match the character of the incoming

employees with the role requirements

which may not automatically be the

case in a number of instances and

hence the need to incur additional

training costs as the new employee

adapts to the organization culture.

The line managers of the outgoing

employees are normally the centre of

attention. They may be blamed for not

being able to manage the employees

well which led to their exit, of which is

an assumption as employees reasons for

quitting could even be bad organization

culture and the work environment

which goes beyond one’s supervisor.

The next big loss for the line manager

is, as the theatrics continue to move

across, performance is still expected

and if it’s a political organization, then

even getting a replacement may take

a long time. Reasons for employees

living employers normally emanate

from a number of factors which go

beyond the pay. Money alone does not

make employees happy but lack of it

also makes them feel ignored and not

appreciated.

All negotiations to hold back an

outgoing employee normally revolves

around the pay package offer of the

new employer without considering

the internal factors which made the

employee to set off the journey of

looking for a new employer in the

first place. All said and done, where

are employers positioned once the

employee decides to take off and the risk

aspects? While still in employment, the

employer is in control of the employee

and is sure that the company secrets are

well guarded from the confidentiality

clause which most employers sneak

in their employment contracts. The

dismissal or resignation letter normally

terminates the employment contract

and hence it’s rendered null and void.

How does the employer take control of

the ex-employee?

Employers stand high chances and

are awkwardly positioned in risky

platforms if they dare mistreat the

outgoing employee. In most cases,

employers are encouraged to treat

the outgoing employees with utmost

respect, and to observe the separation

clause in the employment contract

and HR policy to the latter. All their

dues should be paid and parting ways

should be in a friendly manner. Why

should this be the case? The exiting

employee was once a trusted officer

of the organization who knows all

the secrets, good or bad practices,

and at the slightest provocation can

spread everything to the outside world.

This may result in both financial and

reputation loss to the organization.

Assuming the employee was in

marketing or sales, customers are

normally loyal to people and not the

product per se. The annoyed exiting

employee may just decide to leak a

small weakness of the product you

have been selling and hence win all

the customers to the competitor who

may seem to be the new employer.

What if the staff was in production

and leaks the product secret to other

new entrants in the market who would

create competition and challenge the

market share of the former employer?

In case of a banker, chances are that

the employee may convince a number

of customers to move with them by

which they will close their existing

accounts and move on. For finance

staff, options are myriad which should

not even be mentioned. The fast and

easier one is to set the organization

with the regulatory bodies on areas

of non compliance which may lead to

the closure of organizations or huge

penalties resulting to losses. One

Tax consultant in one of the ICPAK

seminars advised employers to ensure

they part ways with their accounting

staff including their Finance Directors

in a proper manner to enhance

continued friendship.

When employees leave employment,

the good will of being the best

employer is lost as the employees

stand a chance to share the unpleasant

experiences within the organization

making it unattractive to potential job

seekers. The exit of one employee is at

times seen as the open door for mass

exodus. This is majorly experienced

in accounting firms where resignation

from one employee wakes up the rest

to look for new employers who would

probably offer better terms of service.

In instances where an employer opts

to layoff a few employees in order to

manage the employee costs, lack of

clear formula leads to good employees

quitting the organization in the process.

ConclusionEmployees are important component

of every organization and should

be treated with utmost respect if an

organization hopes to prosper. Much

as every individual need may not be

met, the ability to encourage the staff

to ensure they feel appreciated may not

be over emphasized. Every employee

is important but the ones holding key

positions should be treated with utmost

care. Getting into a contract with an

employee/ employer is normally a

sacrifice and one should ensure they

endure when need be. Employers are

cautioned not mistreat their employees

with the notion that organization is

more than one individual as the same

one individual is capable of messing

up the whole organization. When the

time comes for one to take off, the

relationship should be harnessed so

that the employee shares the positive

experiences with the employer and not

vice versa to manage the reputation

risk of the organization with the

outside world■

WORKPLACEWORKPLACE

44 THE ACCOUNTANT JANUARY - FEBRUARY 2016 45THE ACCOUNTANTJANUARY - FEBRUARY 2016


OPINIONOPINION

SHORT CUT TO DEATH: WHY IS FOOD EATING US?By: Muthony wa Gatumo

October is officially the

annual Breast Cancer

Awareness month

worldwide. Through various social

forums & mediums, the general public

is targeted with every last aspect

pertaining the said disease. Judging

from the still ongoing intense debate

it generated. This year's climax in

reference to this subject matter. Was

most definitely the World Health

Organization's 26th October, 2015

latest report on scientific findings on

carcinogenic foods. Meaning foods

that cause cancer.

According to the American Cancer

Society website www.canter.org.

Cancer is the most common name used

for a group of more than 100 different

diseases. All originating from abnormal

body cells growing uncontrollably.

Serious long term illness & guaranteed

death is caused if any of these diseases

go untreated.

Naturally, every last specialist

information that might empower

us to effectively guard ourselves &

vulnerable loved ones. As much as

is humanly possible. Against such

a powerful, dangerous and deeply

devastating enemy is extremely

welcome and priceless. However,

during my recent layman's fact finding

mission over the internet, I was

shocked and surprised to note that

those in the know;the common man's

guaranteed protectors;the experts

on cancer are equally very quick to

contradict themselves. When they

clearly declare that there's no hardcore

conclusive scientific evidence on their

their nonstop findings. The reason why

every seemingly concrete evidence

has an equally similarly powerful

opposing viewpoint. From yet another

certified expert. Meaning that the

common mwananchi must take the full

responsibility of painstakingly going

through all the hard found data. Which

is consistently and religiously provided

and upgraded by the said specialists

from all schools of thought. In order

to create, maintain and manage one's

personalized road map to a cancer free

future. There is no short cut or wonder

pill or quick fix. This time around.

Sorry.

And if you thought that cancer was

the reserve of the on-speed-dial reality

of the far flung so called First World.

What our Kenyan youth call "majuu".

Or only found among our own Who's

Who imaginary millionaires' club

reality, think again. Very seriously

speaking.

“Very recently our local media shocked us with

an exclusive homegrown extremely

depressing cancer

news update. Which informed us

about the cancer epidermic right

here in Meru County. Kenyatta National Hospital is the only public

health facility with relevant

cancer treatment machines in Kenya.

According to the Meru Health

Executive, Dr. William Muraah.

15 per cent of patients seeking cancer treatment at KNH are from

Meru. With a marked increase of liver cancer cases in Imenti Central and

Imenti South”.

Dr. Muraah is quoted to have said

that, "Farmers who rely on irrigation

usually rush to harvest their crops

when the rains start & due to high

moisture content, the cereals develop


aflatoxin." Eating animals given grains

with aflatoxin exposes you to cancer.

There is also a great concern over the

fact that many people under the age of

30 in Meru, are now toothless.

In this light, the current most serious

lifestyle question we all must urgently

address. Is not if you eat to live or live

to eat. But whether or not the very

food meant for fueling our lives; life's

most non negotiable main ingredient

will eventually eat up your life in long

drawn seriously painful very expensive

installments.

16 extremely popular foods eaten

daily the world over appeared in the

WHO blacklist. Making things like

soda, chips, yogurt and even breakfast

cereals very bad for your health. A

habit of exclusively consuming the

highlighted items, in my most humble

basic understanding, is as dangerous

as smoking, drinking or being exposed

to abestos. Because specific foods

are now found to be as responsible

for cancer causing abnormal body

cells growth, as are the other culprits

equally found in the rather alarmingly

ever growing line up; that also has

naturally occurring factors like family

genetics, artificial hormones, some

cosmetics etc.

The International Agency for

Research on Cancer (IARC) Working

Group mentions that high cooking

temperatures, where food is exposed

to a direct flame, as is our popular

barbecued Nyama Choma delicacy,

does produce more of a certain type of

cancer causing chemicals. Even though

there's no concrete scientific evidence

that how you cook your meat affects

the risk of cancer, processed meat like

sausages, bacon and hot dogs, is likely

to be as dangerous as pork & other

types of red meat.

Plastics are another serious concern,

in my opinion. This is the most

commonly found material in nearly

every Kenyan household. Used

for a myriad of domestic purposes

especially in our kitchens, certain

homes' entire kitchenware being

100% made from plastic. Thanks to

it's easy availability and affordability.

It is equally easy to maintain & has

a long shelf life unlike counterparts

made of glass or ceramic material. But

did you know that all plastics are not

made equal? Some are designed only

for household products and others for

gardening supplies. Plastics tailor-

made for industrial use should never

be used in the manufacture of cheap

kitchen utensils. The different said

categories and purposely fashioned

for specific targets. Due to their

chemical components. Meaning that

there is plastic only made for serving

and a different sort for storage of our

food & drinks. Because factors like

high temperatures will automatically

release inbuilt dangerous chemicals on

contact. What ends up contaminating

the plastic container's contents with

carcinogenic elements.

Not all plastics are dangerous in this

respect. But some definitely are. Every

time you drink or eat from that pretty

looking cup or plate. Each time you

pack that plastic lunch box for your

little one. You could be seriously

endangering precious priceless life

unknowingly.

It goes without saying that talking

to your doctor. A qualified certified

healthcare professional one on one

about your health and every other

related niggling issue. Must always

be your very first priority. Without

one ounce of a doubt. Yet. It is said

that prevention is better than cure.

Consciously taking you and your loved

ones' general well-being very seriously

from the get go. Knowing that it all

starts and stops with you and nobody

else. Making that precious priceless

time to do the intense homework that is

obviously needed to fully engage and

utilize your inbuilt survival instincts.

And the ability to take full charge of the

quality of your life. The devil is a liar!

There is always a way to rise above

any last challenge that life throws

your way. For instance. Did you know

that even if there's no known cure or

scientifically proven miracle food? All

concerned parties 100% and then some

agree that one-third of all cancers can

be prevented?

It starts with your mindset. How

powerful you believe and especially

know you were made & meant to be.

Knowing that today it the very first

day of the rest of your life. That every

day is a blank page, in the ongoing

inactivated history of your best life

yet. Now henceforth, reality dictates

that only you alone determines how

your story ends. Beginning by striving

against all odds to maintain the best

possible you friendliest lifestyle. Start

with a balanced diet. Eat well, be active

and do whatever it takes to maintain

a healthy body weight. Balance and

moderation being your catchwords.

Avoid over indulgence. The most

glaring fact is this. Eating any of the

16 WHO forbidden foods wont kill

you in a day. Making them your staple

diet will; guaranteed consumption

of lots of fibre, fruit & vegetables is

very good for you. So is reducing fat

& sugar intake. And that occasional

kanywaji(drink) shared with your

buddies will definitely increase the

quality of your well-being! Although

what does the exact opposite is making

your favourite tipple your miracle

cure for all known and unknown

stresses!! Taking your alcoholic drink

for breakfast, lunch and supper daily.

January. That will only irrigate your

pressing challenges, not drown them!!

With the Christmas season upon us

once again. And since we all must

thank ourselves. In the most authentic

Kenyan tradition. For making it this

far and despite all the issues of 2015.

Here's some tips off the Canadian

Cancer Society's website:

1. Space out your drinks about an

hour apart.

2. Drink some water along with

your alcohol.

3. Schedule at least 2 alcohol-free

days each week.

4. You're more likely to be

successful with realistic

preventative goals then cutting

out all alcohol immediately.

Established in 1995, Kenya Cancer

Association is the leading national

voluntary run non profit organization.

Its core mandate is to raise public

awareness on cancer. Their website is a

God sent wealth of information■MERRY CHRISTMAS!

OPINIONOPINION

JANUARY - FEBRUARY 2016 49THE ACCOUNTANT

statistics show that there is an increase of lifestyle diseases in the world today.



INSPIRATIONINSPIRATION

You should actually be brave

enough to find somebody

else to run all the day-to-

day, and nitty-gritty details of your

company, and then step aside and work

from home for a while, so you can start

to think about a bigger picture--or your

next business. These are the words of

Sir Richard Branson, founder of the

Virgin Group--an empire of more than

400 companies that includes an airline,

a mobile phone company, and a credit

card company.

International business times brings

out an interesting angle on luxury

from Virgin Atlantic’s perspective.

It reported that at a time when many

airlines are going bankrupt, tacking

on high baggage fees and having

massive layoffs and merging; Virgin

Atlantic is not following the trends

and is offering luxury suites ranging

in price from $4,000 to $10,000. (No

wonder Branson wrote the book- screw

business as usual).

IBT explains Virgin Atlantic’s luxury

in the following way; amenities listed

on the company's website include: Flip

down cocktail tables and push panel

armrests, adjustable reading lights,

and conveniently located headphone

jacks; Passenger control unit still has

lumbar support and firm touch buttons

to prevent accidental activation; Each

seat has its own aisle access; More

storage with a new literature pocket and

two ottoman storage solutions; In-seat

power supply compatible with most

international plug types; AeroMobile

system installed so a passenger can

make and receive phone calls and send

texts from their own mobile phone. At

the time of this repot, the new Upper

Class Suites were only being offered

on flight VS003 from Heathrow to

JFK and VS004 back to London. A

round-trip ticket can range anywhere

from $3,988.20 for a restrictive ticket

to $10,470.20 for a fully flexible and

refundable reservation. More flights

and destinations would be added

throughout that year on Airbus A330

aircraft and would be available on

Boeing 787s beginning in 2014…

This account simply shows you several

ways you can spoil or pamper yourself

and that there is no limit to luxury;

and why should there be? Don’t you

sometimes honestly feel you should

put everything aside and simply

think about yourself… only you for a

moment…for a day…for weeks?

In her book 2,001 ways to pamper

yourself, Lorraine Bodger notes

that pampering, contrary to popular

wisdom, is not bad for you- it is

wonderful for you! It’s one of the

best things that can happen to you.

Pampering doesn’t mean spoiling. It

means indulging, caretaking, making

you feel good; delighting you, bringing

you joy. In this book, she says among

other things; throw away every item

of your clothing that does not look

great on you; take time to build a

roaring fire in your fireplace; curl

up and re-read your favorite novel;

watch a sad movie and cry as much

as you like; take a scenic drive to the

accompaniment of your favorite CDs;

Do yourself a favor; choose friends

who support and encourage you; invest

in a great briefcase; take one of your

grandchildren on a trip; make a list

of twenty-five best things that ever

happened to you; enjoy the intimacy of

your close friends; if you have a boring

chore to do, break it up into one-hour

units of work, interspersed with one-

hour units of fun. And figure out what

(or who) gives you comfort and then

do your best to keep it (or them) in

your life… Finally, let your nails grow.

Talking of luxury, it has been noted

that luxury items could also include

cushions which relax you and are a

brilliant way to bring instant style

to your house. Not just that, it can

make a great but inexpensive impact.

Don’t forget that paint can create a

fine appearance almost anywhere;

choose colours that are delightful to

you. Curtains enhance beauty, and

you can change them with the seasons.

Me, Myself, and I"Find somebody else to run your business on a day-to-day basis."

TIME TO PAMPER YOURSELFCompiled by Angela Mutiso

[email protected]

Get good furniture… even if it is one

at a time… these things can create an

opulence situation all the time. Carpets

and chandeliers can make an instant

statement. Ensure that your shoes are

perfect and that you have etiquette in

your manner and speech.

In the meantime youqueen.com talks

of 10 luxury situations; “The Mecca:

A spa day where it says - Picture a

calm, tranquil environment. Soft,

harmonious music is playing through

discrete speakers. Flickering candles

light the space with a romantic glow,

emitting such a delightfully fragrant

smell that you’re tempted to linger in

the foyer, just for another moment.

The waiting room is sumptuous and

comfortable. Herbal tea, sweet tasting

water and an array of beauty products

are at your disposal… it’s the absolute

Mecca of pamperisation (yep, we

made up that word just for this article).

So enjoy, savor and use it wisely, my

friend.”

It talks about movie marathon where

your fears are disappearing while

eating popcorn, advises that you take

a nap; stressing that an afternoon

nap could help you feel energized

and revitalized. But not many

companies have embraced it. Aim for

20 minutes…if you stay longer it will

have the opposite effect and you will

feel groggy.

It proposes that you have a DIY beauty

day… nail polish, hair treatment, facial,

invite friends, do nail file; another

recommendation is that you should

give your foot a massage…as each

area of your foot relates to a specific

body part… as for beauty counters…

visit such places; try new shades,

colours, you can pay for a make up…

Go shopping… but don’t buy an every

day item… no grocery shopping …you

can buy a dress you’ve been eyeing

for months… also… Eat out; Book

yourself a table. If you have many

friends willing to cough up some cash,

book a few tables…or you can decide

to spend a day in your Pajamas…

besides, you can take a day off; you can

put off the alarm, stay in bed all day,

and enjoy your day to the maximum…

finally youqueen.com suggests that …

you can eat dessert first; just like you

did when you were a kid. While you

are doing this, revel in your attributes,

your delightful personality and your

rocking body.

Still, as you have fun, you must think

of the future; think of your retirement;

and this is where Suze Orman comes

in. Suze Orman author of fascinating

books like: You’ve earned it, don’t lose

it; The 9 steps to Financial Freedom

and the courage to be rich, in yet

another book titled: Ask Suze… about

planning for your future, presents

an interesting question and answer

scenario among many questions she

answers in the book. Below is a useful

question and answer she shares:

Q. I know that planning for retirement

is important, but I always seem to be

trying to catch up with my bills. When

do I really have to start thinking about

retirement planning?

A. I don’t even have to know how

old you are to answer this question:

The answer is right now. Here is why:

Time is the most important factor in

the growth of your money. The more

time your money has to grow and the

more time you spend making careful

decisions about it today, the more

money you will be likely to have when

you retire. Planning and investing for

your future are signs of self-respect.

Start now.

Finally, always assess your triumph by

the degree in which you are enjoying

peace, health, love and time. And get

comfort from William Wordsworth,

the nature poet; who declared: Nature

never did betray the heart that loved

her■

INSPIRATIONINSPIRATION

5352 THE ACCOUNTANT JANUARY - FEBRUARY 2016 THE ACCOUNTANTJANUARY - FEBRUARY 2016

The Merriam Webster

Dictionary defines flowers

as the part of a plant that

is often brightly colored, that usually

lasts a short time, and from which the

seed or fruit develops.

The transformation that flowers make

to a place can be so delightful. Their

elegance become focal points in many

places and is known to influence the

way rooms or locations are perceived.

Other than their beauty, flowers offer

more to our world.

According to proflowers, they are

essential to removing carbon dioxide

and toxins in the air. They feed the

honeybee population that’s responsible

for promulgating food crops… and to

most people flowers carry enormous

symbolism, provide soothing sympathy

and are an integral part of many of

life’s ceremonies.

Proflowers further notes that; whether

planted in the ground as part of a

garden or blossoming from shrubs and

trees, flowers add depth and interest to

landscapes. Outdoor weather patterns

affect the timing of the blooms. Bright,

colorful azaleas chase away the winter

dreariness as they bloom, sometimes

long before the grass turns green.

It notes that many animals eat flowers

for nourishment. Flowers have long

been used in cooking for humans as

well and their popularity as a food

source has gone up. Edible flowers are

often used as garnishment for dishes

or as part of a recipe. Popular flowers

used in cooking and preparing meals

include lemon, coriander, gardenia,

marjoram and garlic chives. The

flowers of herbal flowers usually taste

similar to the actual herb.

ExpressionsFlowers are a traditional part of both

happy and sad occasions. Traditionally,

the flowers at funerals bring a sense to

an otherwise sad occasion. Flowers

play an integral role in weddings and

often are the focal piece in a wedding’s

design. Flowers are often used to

express gratitude and love to friends

and lovers. They are also medicinal

and relieve stress. Both the flowers

and the leaves can be used in a tea or

made into a paste to increase blood

flow in the skin. Flowers also serve a

vital role in our ecosystem. Flowers

attract insects and birds, which serve

as pollinators for the plant itself.

Insects and birds also help keep the

surrounding ecosystem of flowers well

maintained and healthy by keeping

away predators, and utilizing the plants

or flowers for their own growth. All

plants produce a flower at some point

during the process of their growth. The

DO WE NEED FLOWERS? Compiled by Angela Mutiso

[email protected]

Wherever you tread the blushing flowers shall rise, and all things flourish where you turn your eyes - Alexander Pope

ENVIRONMENTENVIRONMENT ENVIRONMENTENVIRONMENT

54 55THE ACCOUNTANTJANUARY - FEBRUARY 2016JANUARY - FEBRUARY 2016THE ACCOUNTANT

flower itself produces seeds, which

are then pollinated by either being

transported by birds or insects, or by

being released into the wind or dropped

from the plant. Flowers help keep the

ecosystem growing and provide new

plant life, as well as help sustain local

insects and birds.

Taking care of the ecosystemIn addition to the benefits flowers

provide to the local ecosystem, they

also greatly benefit humans. The

natural bugs and birds that flowers

attract, help keep our own surrounding

environment healthy. The seeds that

flowers drop and pollinate locally

produce more plants, and more fruits

and vegetables for us to eat. In addition,

certain bugs--such as bees, produce

honey from the nectar of the flowers,

but also pollinate the flowers as they

do so--allowing them to produce seeds.

The bugs and birds flowers attract help

keep some "bad" bugs away, such as

bugs that may eat or destroy other

plants.

Ehow.com notes that without insects

or birds to help pollinate flowers, they

would have no way of reproducing

to create new flowers or growth.

Flowers help our ecosystem flourish

and attract a plethora of life to the

area and facilitate the expansion of

our environment. If flowers are cut

down or destroyed before pollination

can occur, that particular species has a

high chance of dying off in that area. In

addition, local wildlife will also vanish

in that area since they would have no

food.

Flower preservation and other usesMeanwhile it helps to know that

there are many ways of preserving

flowers. Wikipedia notes that flower

preservation is as early as the

history of man, although deliberate

flower preservation is a more recent

phenomenon. In the Middle East,

the bones of pre-historic man were

discovered with delicate wild flowers

probably as a tribute to a passing

loved one. Evidence of deliberate

use of specific flowers is indicated by

the pollen grains that were present.

Brightly colored and vivid flowers

were also found in Egyptian tombs.

These flowers were approximated to

be 4,000 years old. In the sixteenth

century medicinal nosegays began to

give way to ornamental ones.

Flowers essentially started to be

used for decorative purposes such as

jewels, fans and gloves. During the

Elizabethan Age the once familiar ruff

was replaced by soft lacy collars, and

bosom flowers also became popular.

Out of the Victorian era grew the

fascination of communicating with

flowers carried in the nosegays. The

idea of the Language of Flowers

developed, when it was decided that

giving and receiving a bouquet of

flowers, when the flowers themselves

carry a meaning, gives much greater

pleasure. One of the earliest methods

of preserving flowers is by drying.

Many plants retain their shape and

color when air-dried naturally. Use of

glycerine has also been known to make

the preserved plant supple and long-

lasting. To use this method, the plant

material needs to be gathered in a fully

hydrated state. Water and glycerine

are then mixed. The ratio of water to

glycerine should be 2:1. The water

should be lukewarm for better mixing

and faster absorption. If the autumn

colors are showing, it may be too late

to preserve them in glycerine.

In 2010, the guardian reported that

scientists said human activity could

spell end for a quarter of all flowering

plants, with huge impact on food chain,

in a feature titled; Over 25% of flowers

face extinction – many before they are

even discovered, the paper explained

that more than one-in-four of all

flowering plants are under threat of

extinction according to the latest report

to confirm the ongoing destruction of

much of the natural world by human

activity.

As a result, many of nature's most

colourful specimens could be lost to the

world before scientists even discover

them, claims the research, published

then in the journal Proceedings of the

Royal Society B. They added that

a researcher David Roberts, who is

one of the co-authors, of the Durrell

Institute of Conservation and Ecology

at the University of Kent said: "Plants

are the basis for much of life on

earth with virtually all other species

depending on them; if you get rid of

those you gets rid of a lot of the things

above them.”

So yes, we need flowers in our lives,

for our homes, for insects, for their

beauty and for life itself; take care

of the flowers around you. Besides,

flowers go beyond physical beauty,

the term flower, is used to describe

lovely things words and even people

that flourish around us… for example;

his genius flowered at the university;

a political movement that began to

flower…They depict youth, and so

much more.

Lee Iacocca; says: We’ve got to pause

and ask ourselves: How much clean air

do we need? So, begin to flower today,

in any way you know■

57THE ACCOUNTANTJANUARY - FEBRUARY 2016JANUARY - FEBRUARY 201656 THE ACCOUNTANT

ENVIRONMENTENVIRONMENT


HEALTH HEALTH

A common infectionGrace had been having white patches in her mouth for sometime but found it difficult to share this ‘little secret’ with anyone. But as days went by, it became terribly uncomfortable for her; in the end she had to consult her doctor. Asked why she thought this should be a big secret, Grace explained that she had been taking antibiotics for a while due to another ailment which she had now recovered from. But no sooner had she started feeling better than this new ailment popped up; so rather than bog people down with what was now visibly ailing her, she preferred to keep it under wraps.

But what is oral thrush? Oral thrush is caused by forms of a fungus called Candida, it can make you very uncomfortable and can occur in several parts of your body. According to Wikipedia, candidiasis is a fungal infection due to any type of candida (a type of yeast). When it affects the mouth, it is commonly called thrush. Signs and symptoms include white patches on the tongue or other areas of the mouth and throat. Other symptoms may include soreness and problems swallowing. When it affects genitalia in women, it is commonly called a yeast infection. Signs and symptoms include itching and burning. Less commonly it may affect men’s genitalia resulting in itchiness. Very rarely, the infection may become invasive spreading throughout the body, resulting in fevers along with other symptoms depending on the parts of the body affected.

Who gets it?Wikipedia explains that more than 20 types of Candida can cause infection with candida albicans being the most common. Infections of the mouth are most common among children less than one month old, the elderly, and those with weak immune systems. Conditions that result in a weak immune system include HIV/AIDS, the medications used after organ transplantation, diabetes, and the use of corticosteroids. Other risks include dentures and following antibiotic therapy. In women these infections occur more commonly during pregnancy, in those with weak immune systems, and following antibiotic use. Risk for widespread infection includes being in an intensive care unit, following surgery, low birth weight infants, and those with weak immune systems.

Wikipedia says candida yeasts are generally present in healthy humans, frequently part of the human body's normal oral and intestinal flora, and particularly on the skin; however, their growth is normally limited by the human immune system, by competition of other microorganisms, such as bacteria occupying the same locations in the human body. Candida requires moisture for growth, notably on the skin For example, wearing wet swimwear for long periods of time is believed to be a risk factor. In extreme cases, superficial infections of the skin or mucous membranes may enter into the bloodstream and cause systemic Candida infections. As mentioned earlier, diseases that increase the risk of candidiasis include HIV/AIDS,

mononucleosis, cancer treatment, steroids, stress antibiotics, diabetes, and nutrient deficiency. Hormone replacement therapy and infertility treatments may also be predisposing factors. Treatment with antibiotics can lead to eliminating the yeast's natural competitors for resources in the oral and intestinal flora; thereby increasing the severity of the condition. Almost 15% of people with weakened immune systems develop a systemic illness caused by Candida species. Diets high in simple carbohydrates have been found to affect rates of oral candidiases.

Oral thrush in babiesAccording to medicalnewstoday.com, babies get candida in their bodies at birth or soon after. Many babies get thrush in the mouth in the first few weeks or months of life. There is no clear reason why some babies get candida. Candida in the mouth normally becomes thrush. Oral thrush is most common in infants and is generally not a serious condition in itself. However, it can be uncomfortable and lead to difficulties with eating or infant feeding if it does not resolve or is not treated.

A small amount of this fungus lives in the mouth most of the time. It is usually kept in check by the immune system and other types of germs that also normally live in the mouth. However, when the immune system is weaker, the fungus can grow, leading to sores and lesions in the mouth and on the tongue. Oral thrush may occur in babies because their immune systems take time to mature, making them less able to resist infection.

ORAL THRUSH Compiled by Angela [email protected]

JANUARY - FEBRUARY 2016THE ACCOUNTANT58


Thrush appears as whitish, velvety lesions in the mouth and on the tongue. Underneath the whitish material, there is red tissue that may bleed easily. The lesions can slowly increase in number and size. The first sign may be that the baby is unsettled, especially when feeding (his mouth is sore). However, many babies are not bothered by thrush.

What are the symptoms?If an older child or adult gets thrush in the mouth, or ulcers that look like they may be thrush, it may be a sign of another disease, and you may need to have it checked. Signs of thrush can occur suddenly. Thrush can also be difficult to get rid of, especially in infants. The corners of the mouth may crack when you open your mouth. Other symptoms can include a loss of taste, or feeling as if swallowed a cotton ball. The thrush can become severe enough that one may have difficulty swallowing food.

Wikipedia says Nystatin is an antifungal medication but many mold and yeast infections are sensitive to it. It is used primarily for infections involving the skin,

mouth, esophagus, among other areas■

Health Tips♦ When visiting your doctor, you may want to

know where the doctor is affiliated in case you need hospitalization… magic words

♦ You may want to know if the doctor is board certified… magic words

♦ Save a shilling a day… Lorraine Bodger♦ Ride your bicycle to work...Lorraine Bodger

♦ For white cotton on linen, put some washing soda in a bowl of hot water and soak the article, this will emulsify the grease…Barty Phillips

♦ If you smoke in the car, put a layer of baking soda in the bottom of the ashtray to absorb smoke odor. Empty frequently…Linda Cobb

♦ To make banana milk shake, take a banana, 100ml milk, and 125 grams yogurt…put everything in a blender and liquidize (if you are on a diet, you can opt for skim milk and plain yogurt).

HEALTH JOURNAL OF THE INST ITUTE OF CERT IF IED PUBL IC ACCOUNTANTS OF KENYA

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62 JANUARY - FEBRUARY 2016THE ACCOUNTANT

BOOK REVIEW

"I want to thank God for winning this title, last time I came fourth. I just want to thank the judges for recognizing me as the winner," Maison Sere, A 42-year-old unemployed man crowned Zimbabwe's ugliest man at a pub pageant in Harare. Sere, who was missing several teeth and dressed in torn overalls, beat off five other contestants for the $500 Mr. Ugly prize; a man who felt he was uglier contested this but Sere was still the winner.

"Unfettered monitoring and inspection" This is what Israeli spy Jonathan Pollard, released in November 2015 after 30 years in a U.S. prison, will go through according to reports.

“You are bound to compare your current partner to other people you’ve dated. But keep your thoughts to yourself. It’s also not a good idea to ask too much about their previous partners or even how many they’ve slept with. But it’s completely reasonable to worry about your sexual health. With this one it’s best to be blunt. Just ask straight out: “Do you have any STIs?”

Chris Hart; speaking about openness in relationships

“I’d love to hang out! But I’m really busy.”; “Sorry I didn’t get back to you earlier! I’ve been so busy.”; “What’s going on with me? Just busy as usual!”…You guessed it. The single-word saboteur is BUSY.”

Author Kira Asatryan explaining that there’s this word that you probably use all the time. It’s a seemingly harmless word, close to meaningless, really, but it’s slowly, subversively tainting your relationships. She says the word busy is stealthily driving your friends away, and it’s time to eliminate it from your social vocabulary.

“Terrorist world war”….’something like Paris can happen any time.”

These are the warnings from Hans-George Maasen; head of the domestic intelligence agency. This was after a near- simultaneous attacks by suicide bombers and gunmen on bars and restaurants, a concert hall and sports stadium killed 129 and left hundreds of people wounded.

“I want to ask criminals in Kisumu to surrender get saved or flee to other regions because we won’t relent on the war against crime.”

Willy Lugusa; Nyanza Regional Police Coordinator; speaking after a suspected robber was killed, while three were arrested and a firearm plus other stolen items were recovered after police raided a house in the lakeside town.

“Farmers should know that crop management may be the difference between good and poor yield. Even in farming styles and methods, the best practices can cut down on pest and excessive use of inorganic fertilizers.”

Joyce Malinga, country crop director explaining that professional farmers have to involve the services of professionals to help sustain good yields.

“We think he used unnecessary force, considering that he aimed at his chest and shot twice.”

Comments in a case involving a supermarket manager in Nairobi, who allegedly shot his colleague dead; he was being investigated for murder.

“My stay in Kenya and Uganda will be a source of hope…..”

Pope Francis speaking about his visit to Kenya and Uganda “People die everyday, corpses litter the streets…how can the leaders allow their population to be massacred from morning to night?”Rwandan President Paul Kagame; stating regretfully that what is happening in Burundi reminded him “a little” of what took place in Rwanda in 1994. “Thousands of Burundian refugees are now streaming into neighbouring Tanzania and Rwanda. Others have resigned themselves to their fate, waiting for death in their own country for either possessing the wrong surname or expressing a different opinion. Even more important, Burundians and those of us here in Kenya who seem hell-bent on treading the same path… must see politics based on ethnicity for what it really is: A curse that does nothing but defile our humanity.”

Writer; R. Gachuhi; lamenting the bloodshed in Burundi –DN

“My life is an endless cycle of borrowing money to plug more money that I owe… this storm will mean we will go hungry for a very long time. We bet everything on this harvest….The loan sharks only have to deal with delayed payment, they will get their money. But us farmers are condemned to die in debt.”

Francisco Santo Domingo; a Philippine A 37 year old rice farmer reacting after losing his crops to a typhoon; He had taken a loan to buy rice seeds and just a week away from harvest… the typhoon struck now his fate is like that of several other Philippine farmers; who will have to go back to a loan shark to try and finance another rice crop at very high interest rates…. and pay his other loans… hoping that the typhoon will not mess him up again. ”

“

MEMORABLE QUOTES

The book I can make you thin may be one of the most interesting weight-loss books you have ever

read. The book by Paul McKenna (PhD) which is accompanied by a CD starts with a simple question; how would you like to eat whatever you want whenever you want and still lose weight?

McKenna says so many people lose weight only to regain it soon after stopping the diet they have so painstakingly followed. This is because in the end, diets don’t work, eating is not due to lack of will-power. Eating, ultimately, is under the control of the brain. Maintaining weight loss by dieting requires a continuous conscious effort to eat less. Like our inability to resist sleep, our brains will override our minds and make us eat.

This is the nature of any living organism where the brain dictates behavior. How can this be altered? The answer lies not in the diet but in changing our response to signals from the brain. That is behavior modification. In this book are keys to accomplishing that which seems impossible; losing weight and keeping it off. There are no fad diets recommended here but rather an approach to controlling the response to hunger and reducing the stress that dieting causes. It shows you how to lose weight and keep it off.

The author points out that in his seminal study into human starvation during the Second World War, biological researcher Ancel Keyes discovered that reducing people’s diet to a state of semi-starvation produced symptoms of irritability, loss of endurance and obsessive behavior

around food, including but not limited to lying, hoarding and stealing. Even more telling, in the three-month period after the semi-starvation was ended and people could once again eat whatever they wanted, their obsession with food continued. Many people ate up to eight times as much food as they had done before the study began.

The author notes that what this goes to show is that depriving yourself of food is the worst possible way to lose weight. And if what you are doing is not working, you need to do something different. And if you are overweight it’s not your fault – it is the natural result of your current mental programming, and no diet, pill, shake or ‘how-to’ book can change that. The only way to lose weight and keep it off is to go to the unconscious mind and change your relationship with food forever.

The author says he has tried to make the book as brief as possible (it is 141 pages) you can finish it quickly and get on with your weight loss. He has also shown successful people’s testimonies to his weight loss prescription. He even encourages you to eat when you are hungry and wonders why not. The book has five chapters which include; chapter one- Are you ready for something different? Chapter-two the simplest weight-loss system in the world, chapter three- programme your mind to slim your body chapter four- overcoming emotional eating, chapter five the truth about exercise, chapter six craving busters and chapter

seven frequently asked

questions about the simplest weight-loss system in the world. McKenna poses some interesting questions to the reader in this revolutionary book; would you like to feel really happy with your body? Are you unable to lose those last 10 pounds? Do you find it difficult to say no to second helpings? Do you get disheartened about your eating habits and your weight? If so this amazing book and CD can help you!

Comments on the book say Paul McKenna has developed a breakthrough weight-loss system that re-patterns your thoughts, attitudes and beliefs about yourself, your health and food to help you easily take control of your diet and lose weight permanently… as you use Paul’s amazing system, the latest psychological techniques will automatically help you to start losing weight straight away! You can use it again and again to make you feel happier about yourself as you can go all the way to your

ideal shape, size and weight■

Reviewed by Angela Mutiso [email protected]

Title: I can make you thin

Author: Paul McKenna

Category: Health

Publishers: Transworld Publishers

Eritrean Law Graduate Makes History At Harvard"For my grandmother back in

Africa, my success in law school

seemed like magic”. Meet Haben

Girma, at 27 she has just become the

first graduate at Harvard Law who is

blind and deaf.

Source: This Is Africa

Which African Country Will Paint The Sky Pink Next?Airlines in Zimbabwe and Ethiopia

made history when they chartered

all female-operated flights. That

brings the tally to three, when will

other African countries follow suit?

Source: News 24

The Tale Of Tanzania's Trapped MinersIt has been the ultimate test of

survival for 5 Tanzanian miners.

They have finally been rescued after

being underground for 41 days, left

to eat insects and suck the water

from roots and the soil. They were

searching for other miners when

they were trapped.

Source: Washington Post

What You Need To Know About The Migrant Crisis“As long as Africa doesn’t receive

the fair prices for its resources, there

will be migrant flows.” That is the

answer from Senegalese President,

Macky Sall, on solving the migrant

crisis.

Source: Mail & Guardian

Senegal Bans Burqa In Public National interest or a crackdown? President Macky Sall says the

full face veil worn by Muslim

women is not compatible with the

Senegalese culture or the moderate

Islam they practice.

Source: The Guardian

1,111 Carat Diamond Found In BotswanaIt's the largest find in more than a

century. The world's second-largest

diamond has been discovered in

Botswana's Karowe mine, weighing

in at 1,111 carats.

Source: Wall Street Journal

Kagame Approved For Another Seven Year TermRwanda's Paul Kagame has joined

the list of African leaders seeking

a third term in office. Lawmakers

approved the decision and it is up

to the public to vote in a nationwide

referendum. Similar bids turned

violent in the Republic of Congo,

Burundi and Burkina Faso.

Source: Reuters

64 THE ACCOUNTANT JANUARY - FEBRUARY 2016

TID BITSTID BITS

AFRICAN MEDIA LEADERS

FORUM CHARTS NEW

PATHWAYS TO JOURNALISTIC

EXCELLENCE:

Action Plan Focuses on Media

Development and Greater

Engagement for Sustainable

Development of the Continent

Johannesburg-More than 600

media leaders met at the 7th African

Media Leaders Forum on November

11-13 to review new opportunities

arising from digital technologies

and charted a forward-looking

action plan for media development

on the continent.

“Africa is on the cusp of

unprecedented economic, cultural

and social transformations,” said

Eric Chinje, CEO, African Media

Initiative (AMI). “African media

have a central role to play in

catalyzing sustainable development

on the continent and securing

sustainable growth of the media

sector. At Birchwood Hotel and

conference Center, we took an

evidence-based approach to secure

a better future for African media

and improve the everyday lives of

Africans.”

A highlight of the Forum was

a keynote address by H.E. Dr.

Ameenah Gurib-Fakim, President

of the Republic of Mauritius, and

a welcome address by Hon. Jeff

Radebe, Minister in the Presidency,

South Africa.

The 19 Zimeo Excellence in Media

Awards 2015 announced at the

Forum mark a new push to drive

excellence in media and support

the sustainable development

agenda for the continent. A record

557 entries in 22 categories were

received from across the continent

and were assessed by a pan-African

complement of judges and jurors.

The Forum tasked AMI with

exploring the establishment of a

publicly-financed “Special Fund

for Media Development,” whose

core purpose will be to strengthen

journalism capacity in Africa’s

low-income countries. Plans are

underway to establish an electronic

“African Media Cooperative”

that would pool news stories

and improve knowledge-sharing

among media houses. A new

initiative to strengthen coverage

of African elections and boost

reporting capacity was announced.

To harness the latest knowledge

and leverage technology, AMI will

seek collaboration with the U.S.

Newspaper Publishers Association.

The AMLF is convened by the

Nairobi-based African Media

Initiative (AMI) and marks the

largest gathering of its type

of African media owners and

professionals. The next AMLF will

be held in Abidjan, Cote d’Ivoire in

November 2016 and venue and dates

will be announced after consultation

with the Ivorian authorities■


Take a look at

some interesting

excerpts from

Africa.com and

from The African

Media Initiative

(AMI). You can

follow them up

on the web.


SEVEN 2016 KENYAN TRAVEL PLANS NOT TO MISS OUT ON Ritah Munyiva

[email protected]

As the New Year sets in,

many make new resolutions

with regards to personal

life, business and all sorts of issues.

Amongst the resolutions, throw in a

new adventure for your new year; here

are some adventures that could make

your 2016 holiday more memorable

and fun.

The Amazing Summit Kenya is well endowed with great

mountains for climbing. These include

Mount Kenya in Central Kenya,

Aberdare Ranges on the Kenyan

highlands, as well as Menengai and

Longonot craters in Rift Valley.

The mountains can be very hot while

climbing during the day but cold at

night. However, Mt. Kenya is cold

throughout due to its snowcapped

nature. While on a mountain climbing

adventure, always walk during the day

when it is safe, listen to your body

and never force your body to continue

climbing if a health complication

occurs.

Being Africa’s second highest peak

at 5,199 meters above sea level,

summiting Mount Kenya is not a walk

in the park – preparing for this big trek

requires conquering other ‘smaller’

mountains first.

All set for it – this big trek is done for

between four to five days under the

supervision of hired guides and porters

who come in handy to carry the bags,

head to the next destination before the

trekkers to set up the camp and prepare

some meals.

There are eight routes to the peak, but

the three most commonly used are

Chogoria, Naro Moru and Sirimon.

The Chogoria - Sirimon route is highly

recommended as it is quiet coupled

with beautiful sceneries, lakes and

waterfalls also.

The adrenalin - pumping jump Bungee jumping on the Tana River

in Kenya is another 2016 adventure

to try out. One of the truly adrenalin

pumping ground activities, bungee

jumping involves a dive from a

structure 60 meters tall with an elastic

cord connected to one’s back, so as

to enjoy the sensation of free falling

but not fall to the ground. The thrill

comes as much from the free-falling

as from the rebounds and gives you

a totally exhilarating feeling. This

activity can be selected as part of the

team corporate building fun in Sagana,

Kenya. Families can also try this out.

The Savage Wilderness Camp, an hour

and a half drive from Nairobi, is one

of the main commercial bungee jump

provider. Every person will have 15

minutes in the jump cage. If the jump

has not taken place after that time the

person will be returned to the ground

without refund.

It is important to note that this activity

has weight restrictions as the maximum

weight of a jumper is restricted to 110

kilogrammes while the minimum

weight 40 kilograms however, there is

no age restrictions.

The Bungee jump can also form part

of a road trip or Safari on your way to

Mt. Kenya, the Aberdares or Samburu

National Park. The camp is also a

convenient picnic-camping site.

The exciting – Kenyan style water rafting This is another adventurous activity

that could be combined with bungee

jumping. Water rafting is another value

added tourism attraction product. The

Tana River Rafting at the Sagana

Camp offers an exciting day of thrills

and spills as well as a great mix of high

action whitewater coupled with scenic

calm water and birdlife.

A typical Tana River water rafting

starts with receiving a comprehensive

safety briefing followed by signing of

a compulsory release and assumption

of risk form, visitors drive up to a spot

where they receive some final practical

training before heading down river.

According to Sagana Camp, the trip

is either 16 kilometer (high water

season) or eight kilometer (low water

season) lasting up to four hours; this

will however vary due to the water

levels. There are options of scenic

float trips from the camp downstream

on completely flat water for those not

wishing to experience any high action

TRAVELTRAVEL



water rafting.

The Mathioya River rafting is another

plan but one of the hardest rafting

rivers in Kenya as it is a narrow and

technical river thus previous water

rafting experience is required. The

Athi River water rafting is another

plan. Flowing through Tsavo National

Park, one can raft up to 80 - kilometers

of Kenya’s second longest river with

three days and three nights on the

river. Water rafting can also be done

at the Ewaso Ngi'ro River, which runs

through Samburu National Park.

The dazzling – birds’ viewing According to the Kenya Tourist Board,

Kenya has a vast variety of species,

over 1,000 made possible by lack of

climatic extremes.

The Kakamega Forest National

Reserve is said to be home 380 species

of plants spread in swamps, riverine

and hardwood forest areas, glades and

the shallow forest around the edge of

the reserve.

Lake Nakuru is home to millions of

flamingos which gather to feed on the

algae mingling amongst eagles, herons,

pelicans and other speckled birds.

Still along the Great Rift Valley, Lake

Bogoria is home to over 373 recorded

bird species while Lake Naivasha, a

freshwater lake attracts black herons,

kingfishers – over 450 species have

been recorded there. The Aberdares is

also home to plenty of dazzling Birds.

Thanks to Lake Turkana’s ecosystem,

the Sibiloi National Park situated on the

east shore of Lake Turkana in Northern

Kenya is also home to a diverse bird

life. The Lake is also one of Africa's

most important breeding areas for the

Nile crocodile.

The welcoming – wildlife conservanciesMuch of Kenya’s success in protecting

fauna and its wilderness is due to the

private conservancies that border

national parks and reserves. The

conservancies encompass vital habitats

and migration paths that would

otherwise be lost. Here, visitors have

an opportunity to venture out to watch

as the king of the jungle seeks for his

prey, locate signs of animals’ activities

such as slumbering areas and carcasses.

Some of the private conservancies are

located in Maasai Mara and Laikipia.

While there, engage in some horse

or camel riding or even an overnight

camp.

The aquatic experience The Kenyan Barrier Reef Kenya is the

world’s second longest coral reef. With

more than 140 miles of reef stretching

from Shimoni in the south to Malindi

in the north, there are plenty of places

for anyone interested in an adventurous

marine exploration trip.

Marine Parks are the place to the

diverse aquatic species as they flutter in

and out of the coral gardens. While at

it, try out a deep sea fishing experience.

The Great MigrationEvery year between July and October,

nowhere in the world is there a

movement of animals as immense as

the wildebeest migration where over

two million animals migrate from the

Serengeti National Park in Tanzania

to the greener pastures of the Maasai

Mara National Reserve in Kenya.

The highlight is normally while the

wildebeests have to cross the Mara

River, the large aquatic reptiles as well

as other carnivores are busy preying on

them.

The Maasai Mara is approximately 280

kilometers west from Nairobi County.

There are two ways to get to the Maasai

Mara either by road or air.

Walking safaris while at the Mara

involves an adventurous trek in the

Maasai Mara ecosystem giving one

a chance to see the animals in close

view. This, however, is not allowed in

the Maasai Mara National Reserve, but

is permitted in the conservancies and

group ranches that border the Maasai

Mara National Reserve. The walks are

conducted by specially trained Maasai

guides who explain the way of the

Maasai culture displaying their skills

in animal tracking and sharing their

immense knowledge on the wildlife.

Most camps and lodges offer walking

safaris.

To get a bird’s eye view of the Mara,

go ballooning. This is probably another

highlight while at the Maasai Mara as

the trip is heavenly and magical. Those

on the hot air balloon will normally

spend up to two hours floating over

the savannah. Take off is usually in the

wee hours of the morning just in time

to catch a breathtaking sunrise.

You dare not miss a Game drive while

at the Maasai Mara as this is designed

to take visitors closer to the wildlife

rich spots as some go around their daily

activities such as hunting. It is always

recommended that visitors use a local

driver or guide who is familiar with the

area, able to give enough information

about the animals and their habitat,

and who also knows where they can

currently be found and how best to

approach them. However, there is also

an option of self-driving.

As you plan your year, put down one

of these adventurous trips in your 2016

bucket list■

TRAVELTRAVEL

ranking of anything under the sun: it writes that “India is the most popular country for outsourcing. Companies across the world are reaching out to India because their culture is full of intelligent, efficient and hard-working individuals”. Roberto Manabat, the Chairman and Chief Executive Officer of Manabat Sanagustin and Company, the KPMG representative firm in the Philippines, writes that “cost optimization will always continue to be one of the main drivers of growth. But companies should remember that cost optimization should be balanced by the objective of achieving high quality results. Providing both cost-efficiency and a highly talented labour pool, the Philippines is an attractive investment destination. Aside from its competitive salary rates, the Philippines offers the lowest real estate rental rates in the region, which is only one-twelfth of the rental costs in Hong Kong but with the quality of infrastructure at a par with some of the best in Asia”.

However, sad as it may be that Kenya has not captured outsourcing business from other countries, Cliff Justice reveals that not all may be lost. He points out that there is a revolution taking shape in the business services industry, one that disregards the traditional shared services and outsourcing paradigms, and centers the design of support services on the needs and priorities of the enterprise as a whole. Since the information technology outsourcing mega-deals of the 1990s and through the expansion of offshoring and business process outsourcing in the 2000s, companies in the US and other high-cost countries

have consistently sought ways to use sourcing strategies to reduce the cost of back office services. When outsourcing was part of a comprehensive strategy, it has proved to be a transformation catalyst that has helped companies implement new processes and technologies, reduce costs, access a global talent pool and change their overall business through the use of partners. But today, the average deal size is smaller, performance expectations are higher and many providers are delivering more complex services with greater industry knowledge and business acumen. While cost is still key, success in a mature relationship is more often determined by its contribution to the business than by cost savings alone. The shared services system has also steadily evolved from the days of simple accounts payable and data entry processing. In many companies it has moved up the value chain to provide a wider range of more complex services and, as a result, established an internal brand. Indeed, multi-functional captive delivery centres are an example of the success of the global shared services concept. Many organizations have monetized the asset and sold off their captives to become commercial service providers with specialties in an industry and in a function.

In the past five years, a number of significant changes have begun to transform the traditional underpinnings

of business service delivery in the Western world. For example, cloud technology and social media are ubiquitous. They are changing not only how people connect with family members or store music, but also how they do business, collect data and deliver technology. These are more than new technologies; they represent a change in behaviour in how the customer and business agree to interact, share information and conduct trade. Perhaps as significant a change is who the customer is. The traditional low cost arbitrage markets have been India, China and other parts of Asia. However, the success of outsourcing and global manufacturing has spawned a rapidly growing middle class in these regions, which is both increasing the cost of labour and broadening the potential customer base for many companies. As this success causes the benefits of labour arbitrage to disappear, how do organizations effectively serve new markets, and where is the next level of back office savings? Most companies would opt


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WHY IT IS IMPORTANTTO AVOID THE DESTRUCTION OF KENYA’S EDUCATION SYSTEMBy Jim McFie, a Fellow of the Institute of Certified Public Accountants of Kenya

JANUARY - FEBRUARY 2016 THE ACCOUNTANT 71

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Cliff Justice

Cliff Justice is a partner of KPMG LLP in Houston, Texas; his area of responsibility is Innovation and Enterprise Solutions. He leads the firm’s Cognitive Technology, Artificial Intelligence and Robotics innovation initiatives. He is a leading authority on business services strategy, design and operations; he has more than twenty years of experience in operations, outsourcing, offshoring and enterprise services transformation. Prior to his

current role, he led the Shared Services and Outsourcing Advisory practice, one of the world's leading consulting groups specialized in sourcing advisory and business services operations. He joined KPMG in 2008 and created the Shared Services and Outsourcing Advisory practice. In 2011, he led the acquisition and integration of EquaTerra, establishing KPMG as one of the world’s largest shared service and outsourcing consulting firms. Prior

to joining KPMG, Cliff Justice was the managing director of EquaTerra.

Sadly, outsourcing and offshoring are functions that Kenya was never able to win away from other destinations: if the amount of outsourcing and offshoring that is done in the Philippines today was done in Kenya, Kenya’s Gross Domestic would instantly grow by 30% and provide jobs for many young people. Ranker.com gives the

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JANUARY - FEBRUARY 2016 73THE ACCOUNTANT

for many more new consumers and additional savings on accounting, finance and information technology (IT): the competitive advantage will go to those that can both connect with new customers and do business effectively in these new markets with lower costs, better data and market insights, and operational flexibility.

When thinking about sales, general and administrative functions—human resources, IT, purchasing, accounting, etc.—some organizations view these support services as a tactical necessity, while others consider them a strategic weapon: some see cost centres, and others competitive advantages. The reality is that neither of these are mutually exclusive. In fact, they demonstrate the degree of contrast that Cliff Justice sees in the strategies and objectives of new business service models. But in a market ripe for and requiring change, a service delivery model that focuses on the holistic requirements and priorities of the enterprise gives companies the ability to enter new markets more easily, integrate acquisitions more quickly, adopt new processes more rapidly, and access and analyze a wider range of data that, most importantly, serves their customer better. While many of these new business service organizations have different objectives, most share common traits. They are centrally managed, and usually have an integrated portfolio of capabilities – typically a combination of external service providers, internal specialists and internal shared services. Most of these organizations are enabled by common technologies and governed

by common processes. These companies have the characteristic of a delivery concept KPMG calls the Extended Global Enterprise—or “EGE.” The EGE is not a specific model or a set delivery structure, but rather a paradigm for delivering business services based on the concept of end-to-end processes, of internal and outsourced service providers, of high value services and of strong central governance. Instead of relying on resources within the four walls of the enterprise, the EGE leverages a global pool of internal and outsourced resources to deliver a service that is nimble, aligned to the business, and connected with customers, employees and suppliers.

The EGE concept has four key attributes. Firstly, its overall goal is to increase value to the business, and help achieve competitive advantage. Beyond meeting service levels and cost benchmarks, it also enables flexibility and the ability to quickly adopt new processes, assemble talent, deliver new technology and centrally collect and analyze relevant data. Secondly, its design is influenced more by customer need and business strategy than by the traditional organizational structure. Thirdly, it consists of a balanced portfolio of services and processes that spans functions, and deploys the most appropriate capabilities whether they are internal, globally sourced or technology enabled. Fourth, it is governed by an empowered organization that has a charter to support the business, manage the delivery model and is measured by the value it creates. Through alignment

of global capabilities, processes and governance, implementation of an EGE-oriented model enables delivery of services in a way that not only supports the business but also advances it. It is about using the knowledge and capabilities of service providers – both internal and external – to make the enterprise more successful.

Cliff Justice asks whether this approach always works. Not for everyone. But the results from recent surveys demonstrate that companies with services delivery designed on similar concepts have reported cost savings of 10-15 percent to 20 percent above and beyond the traditional shared services and outsourcing or decentralized models. They are reducing facility costs by 10 to 15 percent, for example. And due to improved processes, they are getting 8 to 13 percent savings on indirect goods and services.

But that is only the first step. On 26th June 2015, Cliff Justice, citing research from McKinsey Global Institute at the World BPO/ITO Forum's Global Sourcing & Cloud Summit in New York, predicted that over the next 10 years, the work of 110 million to 140 million knowledge workers around the globe may be handled by cognitive robotic process automation systems. This shift to robotic process automation -- which digitizes labor through the use of advanced machine intelligence, engagement, analytics, big data, social media, mobile technologies and cloud computing - will change the knowledge worker labour market as we know it. Cliff Justice characterized robotic process automation (RPA) as

a double-edged sword. While RPA is expected to ultimately expand the job market according to some economists and researchers, the latest wave of automation in its early stages will disenfranchise many workers, exacerbating the income inequality seen today. He cautioned that RPA systems will not necessarily cause 110 million to 140 million knowledge workers to lose their jobs, assuming that “the economy and demand for knowledge workers continues to grow at projected rates”. New RPA technology will fill some of the future demand for knowledge workers: a portion of the displaced workforce will be freed up from doing repetitive

clerical and administrative tasks to focus on innovating and generating revenue, but others will be automated out of a job.

Cliff Justice points out that there are three classes of RPA technology: the first is basic process automation, which includes sophisticated macros, screen scraping and business workflow technologies that sit at the Open Systems Interconnection (OSI)presentation layer and are not integrated into the IT system; the second, enhanced process automation, consists of technologies that use natural language processing and can, for instance, understand unstructured

data and apply that understanding to process automation; the third and most transformative class is autonomic or cognitive platforms: Cliff Justice adds that “these have the ability to parse context and understand meaning like IBM's Watson supercomputer did in Jeopardy; as this technology merges with robotic task automation, you have a whole different class of digital labor. You have technology that can understand your customers and run queries against rules engines. If the response falls within parameters, the technology can inform the robot to carry out a transaction and actually do things that in the past required decisions."For queries that produce results outside a


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given set of parameters, the system can route the request as an exception to a human employee, who can review it and answer it.

Cognitive robotic advancements will have a major impact on the labor market shifting the knowledge worker framework from one of labour arbitrage, which reduces costs for relevant functions by anywhere from 15% to 30%, to one of labour automation, which reduces costs by 40% to 75%. In the very near future labour arbitrage is not really part of the conversation. The concept of outsourcing, which has been a vehicle to move things to low-cost areas, is a dead concept today. The shift to robotic process automation can be compared to the Industrial Revolution. It will transform the whole idea of how one operates one’s business; rather than looking to untapped geographic regions - "the next India" - to drive greater profitability, the new untapped potential will be found through digitization and automation.

Cliff Justice states: "If you think it is … going to be about low-cost labour, you are dead wrong." One key element of RPAis that labor automation is scalable. "With labour arbitrage, if you are going to scale the business, your cost moves up as you do it; labour automation, on the other hand, follows the price/performance curve, not a labour curve. Technology is faster and cheaper, whereas labour doesnot scale that way."What about the impact of the shift to cognitive robotic process automation on the economy? Work by MIT

researchers Andrew McAfee and Erik Brynjolfsson has concluded that robots will eventually create "more jobs than we could ever have imagined." But Cliff Justice cautioned that before this job growth, there is likely to be a lot of social unrest as income inequality increases.

Thomas Piketty's 2014 book, "Capital in the Twenty-First Century", talked about how when return on capital is the predominant measure of domestic income and it exceeds labour, income inequality accelerates and you have social unrest. Cliff Justice claims "That is what we're seeing now. Capital is exceeding labour in the western world and in the developing countries."The good news in this massive disruption, he said, is that cognitive robotics applied to the knowledge worker space opens doors for innovators. "And you open the door for massive amounts of opportunity. This is an entrepreneur's dream."

Erik Brynjolfsson and Andrew McAfee of MIT and fourteen other experts, in an “Open letter on the digital economy” on 4th June 2015, recommended a set of basic public policy changes in the US in the areas of education, infrastructure, entrepreneurship, trade, immigration, and research. They claimed that there is a strong consensus that these can quickly improve America’s economy and the well-being of its workforce. I would like to end this article by repeating exactly their suggestion for the future of education in the US:“The economic history of the first machine age has been described as a race between technology and

education. Because America invested heavily in education, starting with the innovation of publicly-funded primary education in the 1820s, and later adding vocational schools, high school, and college scholarships like the GI bill, the result was not only prosperity, but shared prosperity. But during the last few decades, the educational attainment level of the American workforce has stagnated while the demand for skills that complement the explosion of digital technologies has continued to expand. Moreover, the differences in educational attainment levels by income have risen. Today, we need to invest more in education--at least two years of community college rather than a high school degree should be the minimum educational goal--and we need to address the widening gap in educational opportunities by income. But it will not be enough simply to invest more in education. We need to redesign how we deliver education at all levels using the power of digital technologies. We need to reinvent education with greater emphasis on STEM disciplines and coding skills. We need to shift away from rote learning and build instead on our uniquely human strengths in areas like creativity and interpersonal interactions”.

Kenyans, we live in an extremely competitive world: can we take this advice to heart, rather than spend our time trying to get prior access to examination papers which has effectively destroyed the value of the Kenya Certificate of Secondary

Education?■

curse or blessing to county governments? · poses a thought provoking question: are the teachers...

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