SHARI'AH COMPLIANT - kasneb

kasneb NEWSLINE, Issue No. 1, January - March 2017 i

The Professional Journal of kasneb Issue No. 1, January - March 2017kasneb

EDUCATIVE INFORMATIVE ENTERTAINING EMPOWERING

INSIDE PORTFOLIO THEORY

FINANCE ACT 2016

THE RIGHT COLLECTION

AGENCY

STRATEGIC LEADERSHIP

BE YOUR OWN BOSS

kasneb LAUNCHES

NEW BRAND

kasneb UPDATES

PRIZE WINNERS

THEORYPORTFOLIO

NEWSLINE The Professional Journal of kasneb Issue No. 2, April - June 2017


INSIDE ISLAMIC BANKING

VALUE CURVES

MANAGEMENT ETHICS

THROUGHPUT ACCOUNTING

NON-FINANCIAL PERFORMANCE

EVALUATIONe-kasneb kasneb

UPDATESPRIZE

WINNERS

SHARI’AH COMPLIANT

kasneb NEWSLINE, Issue No. 2, April - June 2017ii

kasneb NEWSLINE, Issue No. 2, April - June 2017 1

XXXXXXXXXXXXXX

Editor Honoraris Pius M. Nduatih

Editorial Team Staff members of Kasneb

Circulation OfficeKasneb Towers

Hospital Road, Upper HillP.O. Box 41362 - 00100

Nairobi - KenyaTel: 254 020 4923000

Cellphone: 0722-201214/0734-600624Fax: 254 020 2712915

E-mail: [email protected]: www.kasneb.or.ke

Facebook:kasnebOfficialTwitter: @kasnebOficial

Kasneb Newsline is the professional students journal of Kasneb. The views in the articles featured in this journal

are those of the respective authors and do not necessarily reflect the views of

Kasneb or its partners.

The Editor welcomes contributions from readers especially students and trainers in

accountancy, finance, credit, governance and management, information

communication technology and cognate subjects.

The Editor reserves the right to edit articles for purposes of clarity

and brevity.Trainers and students are free to

photocopy materials contained in this journal for purposes of learning without

seeking prior consent from Kasneb.

Reproduction is allowed without charge as long as prior consent is sought and

the source acknowledged.

Correspondence should be addressed to:

The Editorkasneb Newsline

Marketing and Corporate Affairs UnitP.O. Box 41362 - 00100, Nairobi

E-mail: [email protected]

CONTRIBUTORS

TO THIS ISSUE

Abdhallah Mambo Isaac MainaKellen Kiambati

63 List of prize winners Kasneb is ISO 9001:2015 certified

Kasneb NEWSLINEIssue No.2, April - June 2017

Raymond Kiambati

3 Auditing and Shari’ah supervision of Islamic financial institutions

33 Non-financial performance evaluation

15 Management ethics

Derrick Majani

43 The Trainee Accountants Practical Experience Framework (TAPEF)

48 Kasneb updates

9 Value curves

25 Throughput accounting and the theory of constraints

CONTENTS

ETHICS

RIGHT

WRONG

kasneb NEWSLINE, Issue No. 2, April - June 20172 kasneb NEWSLINE, Issue No. 2, April - June 2017 3

Editor HonorarisPius M. Nduatih

From the CEO’s desk

The concept of Islamic banking, also referred to as Shari’ah

compliant banking, has continued to gain currency globally

over the last few years. In Kenya, for instance, the entry of new

Islamic Financial Institutions (IFIs), and the roll out by conventional

banks of Islamic financial products such as “Amanah”, ‘’Iman” and

“Lariba” is a clear testimony of the increasing popularity of this new

business niche.

In spite of the above trend, a number of players in the financial market

are unable to trace the line of demarcation between Islamic banking and

conventional banking. Principally, the underlying structures in Islamic banking

are based on the trading of assets, leasing arrangements and profit or loss

sharing. On the other hand, conventional banking is based on lending, ability to

pay and charging of interest.

The underlying uniqueness of Islamic banking poses challenges in the auditing and

supervision of Islamic Financial Institutions (IFIs). Part of the scope of audit or supervision

in this context is to ensure that an Islamic financial product or service complies with Islamic

legal precepts and principles (Shari’ah compliance).

It is in the above context that we feature a lead article in this edition of the kasneb

Newsline titled “Auditing and Shari’ah Supervision of Islamic Financial Institutions”. The

writer sheds more light on the Shari’ah audit framework, role of the Shari’ah Supervisory

Board and the challenges in the audit of IFIs.

In the second articled titled “Reading the Value Curves in Strategy”, the writer integrates

the concept of value curves with strategy development and implementation within the

background of a blue ocean strategy. According to the writer, the right value curve should

depict an organisation’s competitive advantage in terms of strategic focus, divergence

and a compelling tag line that “speaks” to the market.

This edition also features other articles in diverse areas of interest to our readers,

including on ethics management, non-financial performance evaluation, throughput

accounting and the theory of constraints.

Enjoy your reading.

Ethics must begin at the top of every organisation. It is a leadership

issue and CEO must set the example.

Edward Hennessy


Introduction

Islamic or Shari’ah compliant banking is a fast-growing segment of the financial sector in Kenya. The industry has shown double digit growth rates although from

a relatively low absolute base. The growth of Islamic finance in Kenya is linked to the reform agenda of the Central Bank of Kenya that reviewed the banking laws more than five years ago that extended to the insurance industry and now the capital markets.

Kenya’s experience with Shari’ah compliant banking is already being shared by Tanzania and Uganda as they seek to enact similar laws. Currently, Kenya has two fully fledged Islamic banks: Gulf African Bank and First Community Bank. Conventional banks such as National Bank, Chase Bank, Barclays Bank and Standard Chartered Bank are already tapping into the Islamic financial market with their National “Amanah”, Chase “Iman”, Barclays “Lariba”, Standard Chartered

“Sadiq” accounts respectively. Other international banks like Dubai Islamic Bank (DIB), the largest Islamic bank in the United Arab Emirates, have registered interest in the Kenyan market. Financiers see a growing demand for this alternative mode of finance that widens the choice for investors and governments that have proactively created the enabling environment to promote the diversification of their financial markets.

In terms of functionality and the objectives of realising financial intermediation, Islamic banking and finance is not any different from the conventional banking and finance, only that the underlying structures are based on the trading of assets, leasing arrangements and profit and loss sharing investments as dictated by the Shari’ah principles. It is this difference that makes auditing and supervision of the Islamic Financial Institutions different from the conventional banking system.

AUDITING AND SHARI’AH SUPERVISION OF ISLAMIC FINANCIAL INSTITUTIONS

• The basic sources of Shari’ah principles are in the Quran and the Sunnah, which are followed by the consensus of the jurists and interpreters of Islamic law.

• Profit sharing and fee-based financing approaches have developed in compliance with Shari’ah laws.

• The Islamic law (Shari’ah) prohibits taking or giving interest (Riba) which is the most essential feature of Islamic banking.

• These special modes of financing have emerged in retail, private and commercial banking for debit and capital markets, insurance, asset management, structured and project financing.

Governing principles in Islamic finance

Tenets of Islamic Finance

Money as potential capital

Prohibition of interest

Sanctity of contract

Risk sharing

Shari’ah compliant activities

Prohibition on speculative

transaction

Islamic financial system

ConventionalMoney

BANK CLIENT

Money + Money (interest)

Islamic

Money

BANK CLIENTTrade

ABDHALLAH MAMBO DALLU, BBM, CPAK, CIAInternal Auditor, Umma University


AUDITING AND SHARI’AH SUPERVISION

Shariàh supervision in Islamic Financial Institutions Shariàh supervision is the process of ensuring that a financial product or service complies with Islamic legal precepts and principles, either by its conforming (to one degree or another) to a recognised Islamic legal norm or by its not violating the same. Ideally, Shariàh supervision will be a part of an Islamic product or service from the time of its development, to its launch, and throughout the period it is offered. At the stage of research and development or of drafting contracts or offering memorandum, Shariàh supervision, in one form or another, should be an active participant. By including Shariàh supervision and advice at the earliest stages, management may save costly legal fees that may be required at a later stage if elements of the proposed business/contracts need to be modified to comply with Shariàh principles and precepts.

If Shariàh supervisors are to certify a venture, they will insist on being a part of its development; or at least to having access to the details of whatever went into the development or structuring of the product, instrument, service or enterprise. Moreover, once a product is launched, Shariàh supervision may take the form of ongoing monitoring through periodic audits. Such audits may be undertaken by means of site visits, document reviews, or consultation with management at regular intervals.

Role of key players in the audit of Islamic Financial Institutions (IFIs)Due to the need to ensure proper adherence to the Shari’ah principles in operations and activities, external auditors are not expected to conduct both types of audit for IFIs. This is because the criteria in deciding whether an activity complies with Shari’ah principles or not is a matter for the Shari’ah Supervisory Board (SSB) of the individual IFI to decide, as they have expert knowledge in Islamic jurisprudence. Given the accepted divergence in Shari’ah principles between, and even within, national groups, the additional attestation of Shari’ah compliance is measured against the Islamic Shari’ah rules and principles, as determined by the SSB in each IFI. The role of the external auditor with respect to Shari’ah compliance is only to test for compliance based on the outlines provided by the SSB. Besides the SSB and external auditors, the other two key players involved in the audit of IFIs are the internal auditors and the Audit and Governance Committees.

The role of Shari’ah Supervisory Board in auditing of IFIs The Shari’ah Supervisory Board (SSB) plays a key role in the overall audit and governance framework, both ex-ante and ex-post. Their role ex-ante is to formulate policy and guidelines to be followed by management in their activities, including approval of products. The ex-post role is to conduct Shari’ah review, which is an examination to ensure that the activities carried out by

Global Islamic finance

Eco-system

Islamic Financial

Services Board (IFSB)

International Liquidity

Management Corporation

(IILM)

Accounting and Auditing

Organisation of Islamic Financial

Institutions (AAOIFI)

International Islamic Financial

Market (IFM)

Islamic International

Rating Agency (IIRA)

International Islamic Fiqh

Academy (IFA)

International Islamic Centre for

Reconciliation and Arbitration

(IICRA)

Shari’ah governance: A credible Shari’ah structure that promotes integrityProper governance provides multi-layer assurance on Shari’ah compliance1. Shari’ah Advisory Council given legislative

stature as highest authority for Shari’ah matters in Islamic finance

2. Institutionalise mutual respect by recognising differences of Shari’ah interpretations in various jurisdiction

3. Accountability of Shari’ah committee of Islamic Financial Institutionds (IFIs) on decision, views and opinions related to Shari’ah matters

4. Board and senior management with sufficient expertise and capability in dealing with issues specific to Islamic financial transactions

5. Emphasise the function of Shari’ah review and Shari’ah audit to provide checks and balance

6. Timely disclosure on fatwa rulings

Shari’ah as overarching principle in Islamic finance

Shari’ah compliance functions:Shari’ah reviewShari’ah audit

MANAGEMENT SHARI’AH COMMITTEE

BOARD



an IFI do not contravene the principles of Shari’ah. The Shari’ah review involves three phases:

(i) Planning and designing the review procedures. (ii) Executing the review procedures and preparing

and reviewing the working papers. (iii) Documenting the conclusions and producing a

comprehensive Shari’ah Supervisory Report.

When executing the Shari’ah review procedures, a draft report from the external auditor regarding Shari’ah compliance testing, and the internal Shari’ah review report from the internal auditor, will help the SSB in documenting their conclusions and expressing a Shari’ah opinion in their comprehensive report. In short, the Shari’ah review is a comprehensive analysis of not only the financial statements but also of contracts, agreements and transactions, to ensure Shari’ah compliance and to add credibility to management’s activities.

Co-ordinating

Group audit

Risk management

Shari’ah audit functionShari’ah review

Shari’ah committee

Monitoring and reporting

Representation

Representation

BOD

RepresentationBoard Audit Committee

Management

Compliance

Monitoring and co-ordinating

Head, Group Audit Takaful

Head, Group Audit Management

Head, Group Audit Banking

Head, Group Audit Asset management

Head, Group Audit Other services

Representation

Shari’ah audit framework reporting line

Risk in Islamic

banking

Islamic finance

Shari’ah and Islamic

finance

Islamic fund management

Shari’ah compliant lending and investment

Takaful Murabaha

Musharakah Mudarabah

Sukuk

Prohibition of interest

Prohibition to support some sectors

(e.g. alcohol)

Principle of assets backed

transaction

Profit and loss principle and risk sharing

Prohibition of interest uncertainty

(e.g. speculation)Islamic Finance



External AuditorOne of the unique roles played by the external auditor of an IFI, besides performing the financial statements audit, is to conduct a test of Shari’ah compliance. The audit process involves a structured, documented plan involving a series of steps beginning with planning the audit and ending with expressing an opinion in an external audit report as to whether the financial statements are prepared in accordance with the fatwa (religious opinions), rulings and guidelines issued by the SSB of the IFI and relevant accounting standards and practices in the country in which the IFI operates.

In order to provide reasonable assurance that the IFI has complied with Shari’ah rules and principles as determined by the SSB, the auditor needs to obtain sufficient and appropriate audit evidence. In order to guide the auditor in making judgement as to whether the financial statements of the IFI have been prepared in accordance with Shari’ah rules and principles, the auditor will rely on the fatwa and rulings and guidance

issued by the SSB. However, the auditor is not expected to provide interpretation of the Shari’ah rules and principles.

Hence, when conducting the audit, the auditor will include procedures in his or her examination to ensure that all new fatwa rulings and guidance and modifications to existing fatwa rulings and guidance are identified and reviewed for each period under examination. The auditor will review the reports issued by the SSB to the IFI concerning Shari’ah compliance as well as the SSB’s minutes of meetings to ensure that all types of products offered by the IFI have been subjected to a review by the SSB. The auditor must also examine the findings of all internal reviews carried out by the IFI’s management, the internal audit and the report of the internal Shari’ah review. The auditor will send his or her draft report and conclusions related to Shari’ah compliance to the SSB, and if the SSB’s draft report indicates that compliance is lacking, the auditor may modify his or her draft report, providing adequate explanation of the nature of, and reasons for, the modification.

Internal auditor - Shari’ah Review According to governance standards for IFIs No. 3 (GSIFI 3), the conduct of the internal Shari’ah review process may be undertaken by the internal audit department, provided that the reviewers are properly qualified and independent. Before the review process can take place, management prepares a charter containing a statement of purpose, authority and responsibility, and sends it to the SSB for approval. Once the charter is approved, the board of directors will send the charter to the head of the internal Shari’ah review, who will then appoint a team that has competence to carry out the task.

The reviewers will first plan each review assignment and the documentation. Then they will collect, analyse and interpret all matters related to the review objectives and scope of work, including examination of documentation, analytical reviews, inquiries, discussions with management and observations to support their review results. Working papers that document the review will be prepared by the reviewer and reviewed by the head of internal Shari’ah review, who will then discuss the conclusions and recommendations with appropriate levels of management before issuing the final written report.

Islamic Banking

Focus on investment

Emphasis on soundness of project

Coordination with partners in resource mobilisation

Apply moral criteria in investment

Emphasis on ability to repay

Dependence on borrowing in resource mobilisation

Apply only financial criteria

Conventional Banking

Focus on lending

Differences from conventional banks



Audit and Governance CommitteeThe role of the Audit and Governance Committee (AGC), comprising non-executive directors, is described in detail under GSIFI No.4. It is responsible for checking the structure and internal control processes and ensuring that the activities of the IFI are Shari’ah-compliant. The duties of the AGC also include the review of the reports produced by the internal Shari’ah review and the SSB to ensure that appropriate actions have been taken.

The scope of audit for IFIs is much broader. AAOIFI defines “scope of an audit” as the audit procedures deemed necessary by the auditor in the circumstances to achieve the objective of the audit for the IFI. It further states: “The procedures required to conduct an audit in accordance with Auditing Standards for Islamic Financial Institutions (ASIFIs) should be determined by the auditor having regard to the requirements of appropriate Islamic Rules and Principles, ASIFIs, relevant professional bodies, legislation, regulations which do not contravene Islamic Rules and Principles and, where appropriate, the terms of audit engagement and reporting requirements. International Standards on Auditing (ISAs) shall apply in respect of matters not covered in detail by ASIFIs providing these do not contravene Islamic Rules and Principles.”

From the above statement, it is clear that external auditors of IFIs are expected to deal with wider rules and guidelines. Since they are expected to conduct tests of Shari’ah compliance, they will have to ensure that management has adhered to the interest-free and permissibility (halal) principles as specified by the SSBs.

Challenges on the audit of IFIsThere are currently a number of challenges with regard to the auditing of IFIs, especially in terms of Shari’ah compliance audit.

First, despite the efforts of AAOIFI in promulgating auditing standards, the focus and scope tend to be on financial statements rather than the broader concept of Shari’ah audit, which involves the audit of all activities of IFIs based on maqasid al-Shari’ah (purposes of Islamic faith). Furthermore, the use of the term “Shari’ah review” rather than “Shari’ah audit” by AAOIFI may implicate a lower level of assurance in the case of the former.

Second, based on AAOIFI’s auditing standards, the functions of Shari’ah audit or review are distributed to different entities, for example, external auditor, Shari’ah Supervisory Board (SSB), internal Shari’ah reviewer and the Audit and Governance Committee. While external auditors act as the external mechanism in monitoring compliance, their lack of competence makes them rely heavily on the SSB’s fatwa, whereas in fact they should be making an independent judgement on the issue of compliance.

Third, the independence of the SSB has been questioned as they are involved in making fatwa and in setting up the guidelines on Shari’ah compliance as well as in conducting a Shari’ah review or audit of the IFI concerned. Given the rapid growth of IFIs globally, there is the need for a proactive measure by AAOIFI to issue clear auditing standards, which will make the work distinct from supervisory boards, so as to overcome these challenges and provide a flat form for the professionalism of Shari’ah compliant auditing.

ConclusionShari’ah audit and Shariàh supervision may be thought of as the most important distinction between a conventional and a truly Islamic financial institution. While a business may attempt to represent itself as “Islamic,” unless it has qualified Shariàh auditors and supervisors, it has no way of certifying that its services, products and operations are actually Shariàh-compliant. Shariàh supervision signifies a real commitment on the part of management to the principles of transparency and accountability in the matter of Shariàh compliance.

THE ISLAMIC FINANCE MODEL

Real economy

Financial economy

Islamic finance

= Asset

backed

Maysir = Gambling

Riba = Interest

Gharar = Uncertainty


The quality of education am getting from

my kasneb-accredited college

is high.

Before you enroll, ask if the college is accredited by kasneb

MY FUTURE IS BRIGHT


The strategy canvas enables companies to see the future in the present. To achieve this, companies must understand how to read value curves.

Embedded in the value curves of an industry is a wealth of strategic knowledge on the current status and future of a business.

The first question the value curves answer is whether a business deserves to be a winner. When a company’s value curve, or its competitors’, meets the three criteria that define a good blue ocean strategy; focus, divergence and a compelling tagline that speaks to the market, the company is on the right track.

These three criteria serve as an initial litmus test of the commercial viability of blue ocean ideas. On the other hand, when a company’s value curve lacks focus, its

cost structure will tend to be high and its business model complex in implementation and execution. When it lacks divergence, a company’s strategy is a me-too, with no reason to stand apart in the marketplace. When it lacks a compelling tagline that speaks to buyers, it is likely to be internally driven or a classic example of innovation for innovation’s sake with no great commercial potential and no natural take-off capability.

READING THE VALUE CURVES IN STRATEGY

A tagline that represents the brand promise

Benefits of using a compelling tagline

• It is a simple and effective way to communicate brand extension, revitalisation or a change in positioning, and can deliver a message that enhances your brand experience by promoting unique product and/or service benefits.

• Helps differentiate new or revised brands and creates effective brand awareness when launching new products and/or services to the desired market audience.

• Can be easily updated or changed to suit the organisation’s product/services marketing mix, and can be used to communicate an organisation’s broader range of products and/or services.

• One or more taglines can be used to suit various organisational product/services or business units.Aspects of a good tagline

Contains key words

Shows specific benefits

Shows what they can do

for you

DR. KELLEN KIAMBATI, Management Consultant


VALUE CURVES

A company caught in the red oceanWhen a company’s value curve converges with its competitors, it signals that the company is likely to be caught within the red ocean of bloody competition. A company’s explicit or implicit strategy tends to be trying to outdo its competition on the basis of cost or quality. This signals slow growth unless, by the grace of luck, the company benefits from being in an industry that is growing on its own accord. This growth is not due to a company’s strategy, however, but to luck.

Over delivery without paybackWhen a company’s value curve on the strategy canvas is shown to deliver high levels across all factors, the

question is, “does the company’s market share and profitability reflect these investments?” If not, the strategy canvas signals that the company may be oversupplying its customers, offering too much of those elements that add incremental value to buyers. To value-innovate, the company must decide which factors to eliminate and reduce and those to raise and create to construct a divergent value curve.

An incoherent strategyWhen a company’s value curve looks like a bowl of “spaghetti”, a zigzag with no rhyme or reason, where the offering can be described as “low-high-low-low-high-low-high”, it signals that the company does not have a coherent strategy. Its strategy is likely based

Spaghetti value curve signals an incoherent strategy A value curve showing a coherent strategy

Compete in existing market placeBeat the competition

Exploit existing demandMake the value-cost trade-off

Align the whole system of a firm’s activities with it’s strategic choice of differentiation or low cost

“Defend current position” perspective

Create uncontested market spaceMake the competition irrelevantCreate and capture new demand

Break the value-cost trade-offAlign the whole system of a firm’s activities in pursuit

of differentiation and low cost

“Innovate and pursue new opportunities” perspective


VALUE CURVES

on independent sub-strategies. These may individually make sense and keep the business running and everyone busy, but collectively they do little to distinguish the company from the best competitor or to provide a clear strategic vision. This is often a reflection of an organisation with divisional or functional silos.

Strategic contradictionsAre there strategic contradictions? These are areas where a company is offering a high level on one competing factor while ignoring others that support that factor. An example is investing heavily in making a company’s Web site easy to use but failing to correct the site’s slow speed of operation. Strategic inconsistencies can also be found between the level of your offering and your price. For example, a petroleum station company found that it offered “less for more”: fewer services than the best competitor at a higher price. No wonder it was losing market share fast.

The major principle of formulating a blue ocean strategy is to reconstruct market boundaries. This principle addresses the search risk many companies struggle with. The challenge is to successfully identify, out of the haystack of possibilities that exist, commercially compelling blue ocean opportunities. This challenge is key because managers cannot afford to be riverboat gamblers betting their strategy on intuition or on a random drawing. This is done using six frameworks namely:-

Functional barriers Hierarchical barriers Operative islands

An internally driven companyIn drawing the strategy canvas, how does a company label the industry’s competing factors? For example, does it use the word megahertz instead of speed, or thermal water temperature instead of hot water? Are the competing factors stated in terms buyers can understand and value, or are they in operational jargon? The kind of language used in the strategy canvas gives insight as to whether a company’s strategic vision is built on an “outside-in” perspective, driven by the demand side, or an “inside-out” perspective that is operationally driven. Analysing the language of the strategy canvas helps a company understand how far it is from creating industry demand.

Outside-in perspective is driven by the demand side

(i) Looking across alternative industries.

(ii) Looking across alternative strategic groups.

(iii) Looking across complementary goods.

(iv) Refining buyers. (v) Refining perspectives of an

industry. (vi) Participating in shaping external

trends over time.

The question is, how do we develop a blue ocean strategy? Think of a typical strategic plan. It starts with a lengthy description of current industry conditions and the competitive situation. Next is a discussion of how to

From silos, lack of communication,

Multiple handoffs

to

Cross functional roles,High collaboration,

Results oriented


VALUE CURVES

increase market share, capture new segments, or cut costs, followed by an outline of numerous goals and initiatives. A full budget is almost invariably attached, as are lavish graphs and a surfeit of spreadsheets. The process usually culminates in the preparation of a large document culled from a mishmash of data provided by people from various parts of the organisation who often have conflicting agendas and poor communication. In this process, managers spend the majority of strategic thinking time filling in boxes and running numbers instead of thinking outside the box and developing a clear picture of how to break from the competition. If you ask companies to present their proposed strategies in no more than a few slides, it is not surprising that few clear or compelling strategies are articulated.

It is no wonder that few strategic plans lead to the creation of blue oceans or are translated into action. Executives are paralysed by the muddle. Few employees deep down in the company even know what the strategy is. And a closer look reveals that most plans do not contain a strategy at all but rather a smorgasbord of tactics that individually make sense but collectively do not add up to a unified, clear direction that sets a company apart let alone makes the competition irrelevant.

The other principle is to focus on the big picture. This principle is key to mitigating the planning risk of investing lots of effort and lots of time but delivering only tactical red ocean moves. Here, the aim is to develop an alternative approach to the existing strategic planning process that is based not on preparing a document but on drawing a strategy canvas. This approach consistently

BIG picture thinkingFocus on the big picture instead of being immersed in numbers and jargon

produces strategies that unlock the creativity of a wide range of people within an organisation, open companies’ eyes to blue oceans and are easy to understand and communicate for effective execution.

Drawing a strategy canvas not only visualises a company’s current strategic position in its marketplace but also helps it chart its future strategy. By building a company’s strategic planning process around a strategy canvas, a company and its managers focus their main attention on the big picture rather than becoming immersed in numbers and jargon and getting caught up in operational details.

Drawing a strategy canvas does three things.

(i) First, it shows the strategic profile of an industry by depicting very clearly the factors (and the possible future factors) that affect competition among industry players.

(ii) Second, it shows the strategic profile of current and potential competitors, identifying which factors they invest in strategically.

(iii) Finally, it shows the company’s strategic profile or value curve depicting how it invests in the factors of competition and how it might invest in them in the future.

The strategic profile with high blue ocean potential has three complementary qualities: focus, divergence and a compelling tag line. If a company’s strategic profile does not clearly reveal those qualities, its strategy will likely be muddled, undifferentiated and hard to communicate.


VALUE CURVES

Visualising strategy at the corporate levelVisualizing strategy can also greatly inform the dialogue among individual business units and the corporate center in transforming a company from a red ocean to a blue ocean player. When business units present their strategy canvases to one another, they deepen their understanding of the other businesses in the corporate portfolio. Moreover, the process also fosters the transfer of strategic best practices across units.

Using the Pioneer-Migrator-Settler (PMS) MapVisualising strategy can also help managers responsible for corporate strategy predict and plan the company’s future growth and profit. All the companies that create blue oceans have been pioneers in their industries, not necessarily in developing new technologies but in pushing the value they offer customers to new frontiers. Extending the pioneer metaphor can provide a useful way of talking about the growth potential of current and future businesses. A company’s pioneers are the businesses that offer unprecedented value. These are your blue ocean strategists and they are the most powerful sources of profitable growth. These businesses have a mass following of customers. Their value curve diverges from the competition on the strategy canvas. At the other extreme are settlers—businesses whose value curves conform to the basic shape of the industry’s. These are me-too businesses. Settlers will not generally

contribute much to a company’s future growth. They are stuck within the red ocean. The potential of migrators lies somewhere in between. Such businesses extend the industry’s curve by giving customers more for less, but they don’t alter its basic shape. These businesses offer improved value, but not innovative value. These are businesses whose strategies fall on the margin between red oceans and blue oceans. A useful exercise for a corporate management team pursuing profitable growth is to plot the company’s current and planned portfolios on a pioneer-migrator-settler (PMS) map. If both the current portfolio and the planned offerings consist mainly of settlers, the company has a low growth trajectory, is largely confined to red oceans, and needs to push for value innovation. Although the company might be profitable today as its settlers are still making money, it may well have fallen into the trap of competitive benchmarking, imitation and intense price competition. If current and planned offerings consist of a lot of migrators, reasonable growth can be expected. But the company is not exploiting its potential for growth and it risks being marginalised by a company that value-innovates.

Overcoming the limitations of strategic planningManagers often express discontent, either explicitly or implicitly, with existing strategic planning, the core activity of strategy. To them, strategic planning should be more about collective wisdom building than top-down or bottom-up planning. They think that it should be

PIONEERSValue Innovation

MIGRATORSValue Improvements

SETTLERSValue Imitation

TODAY TOMORROW

Cost savings are made by eliminating and reducing the factors an industry

competes on

Buyer value is lifted by raising and creating elements the industry has

never offered


IF YOU CHANGE THE WAY YOU LOOK

AT THINGS, THE THINGS YOU LOOK AT

CHANGE.

Reconstruct market conditions

Focus on the big picture, not the numbers

Reach beyond existing demand

Get the strategic sequence right

Overcome key organisational hurdles

Execution principles

Formulation principles

Execution risk

Formulation risk

Build execution into strategy Management risk

Organisational risk

Business Model risk

Scale risk

Planning risk

Search risk

Six Principles of Blue Ocean Strategy

ConclusionRecent developments in strategy formulation and implementation call for a paradigm shift from the traditional approach. This shift should focus more on drawing a strategy canvas and open a company’s eyes to blue oceans.

Building the process around a picture addresses many of managers’ discontents with existing strategic planning and yields much better results. As Aristotle pointed out, “The soul never thinks without an image.”

more conversational than solely documentation-driven, and it should be more about building the big picture than about number-crunching exercises. It should have a creative component instead of being strictly analysis-driven and it should be more motivational, invoking willing commitment, than bargaining-driven, producing negotiated commitment. Despite this appetite for change, however, scant work exists on building a viable alternative to existing strategic planning, which is the most essential management task in the sense that almost every company in the world not only does it but often takes several grueling months each year to complete the exercise.

Some renowned taglines

VALUE CURVES


Defining ethics

Ethics can generally be defined as the branch of philosophy that deals with morality. It is concerned with distinguishing between good and evil in the

world, between right and wrong human actions and between virtuous and non-virtuous characteristics of people. Ethics has also been defined as the moral principles that control or influence human behaviour. Given that ethics deals with an individual’s conduct, it is important that it be considered in all aspects of human life.

Others have defined ethics as a code of thinking and behaviour governed by a combination of personal, moral, legal and social standards of what is right. Although the definition of “right” varies with situations and cultures, its meaning in the context of a community intervention involves a number of guiding principles with which most community activists and service providers would probably agree.

Ethics can also be defined as the discipline, often classified as a sub-discipline of philosophy, which is concerned with what is good and just for individuals, groups, organisations and society. The discipline investigates the nature of our well-being and happiness,

ETHICS MANAGEMENT

Good versus evil in the world

ISSUES THAT CONCERN ETHICS

Right versus wrong human actions Virtuous versus non-virtuous characteristics Justice and fairness

Virtue ethical theories

Individual character ethics

Work character ethics

Professional character ethics

RAYMOND KIAMBATI, Management Consultant


Management ethics The main goal of management ethics is to treat all employees and customers justly and fairly. It is believed that by following moral and ethical codes, business will improve. When management adheres to management ethics, employees become motivated and the workplace

environment becomes motivational. Acting ethically means adhering to law, competing with others in an honest manner and performing daily tasks without any element of deceit. Many companies around the globe update written codes of conduct as a result of past corporate scandals. It is not uncommon for a company to update this document on a yearly basis. After a code of conduct document has been updated, each staff member must read and understand the document. Further, all employees must adhere to the updated codes of conduct and those that do not follow these regulations are often dismissed. Although managers must follow the same codes of conduct as employees, they have additional obligations.

Almost every decision that is made on a daily basis involves an ethical decision. Managers must keep this in mind at all times. By setting a good ethical example for their employees, managers can easily encourage all employees to follow the same ethical practices. Some companies offer managers specialised management ethics courses that must be completed prior to job acceptance.

Frequently, managers who switch companies are asked to follow a different code of conduct. This does not mean that all other management ethics should be forgotten, but it does mean that additional ethics should be learned. Ethics are not necessarily interchangeable from country to country. Sometimes, different cultures respect different ethical rules. Thus, any person who decides to move to another country may have to adapt to cultural and workplace ethical differences. In this case, management ethics is the ethical treatment of employees, stockholders, owners and the public by a company. A company, while needing to make a profit, should have good ethics. Employees should be treated well, whether they are employed locally or overseas.

Different renumeration structures for the same task No payment for overtime work Poor working conditions

HOW DO WE RELATE?

Individual

Group

Organisation

Society

Individual

Group

Organisation

Society

the appropriate pathways to our prosperity, our obligations and, related to all this, the rights that we owe to ourselves and to one another. In modern society, ethics defines how individuals, professionals, corporations and societies choose to interact with one another.

HOW DOES THE ORGANISATION RELATE WITH ITS STAKEHOLDERS

Employees

Managers

Owners

Internal Stakeholders

External Stakeholders

Suppliers

Customers

SocietyGovernment

FinanciersCompetitors

Shareholders

Organisation

They need masks

Masks? That’s an extra cost to the firm.

Thought it was CSR

We worked the whole weekend!

ETHICS MANAGEMENT


Background information on management ethicsThe word ethics comes from the Greek word ethos which means character. The definition of ethics has been constantly developed through generations of philosophers such as Socrates, Plato, Aristotle, Plutarch, Cicero, Avicenna and the renaissance and modern philosophers. Ethics has to do with morality, principles or standards that we employ in our day-to-day activities and interactions. Whether we like it or not, we all partake in the moral reality, by thinking about moral issues and making moral choices. We do so even when the choice is to avoid making any choice on moral issues. Every time we think of what we did in the past, what we should be doing now or what we should be doing in the future, we are thinking to some extent about our morality. Morality, however, is not ethics. If morality is the lived ethical domain, then ethics is the principled investigation of that domain.

Ethics flourishes in an environment where people have confidence with one another and have mutual trust. Perceived fairness in the performance management process is essential so that it is part of the solution, not part of the problem. A culture of continuous improvement that directly faces and deals with the development needs of employees and leaders will benefit when people are able to learn from their mistakes and, therefore, develop sustainably. Fundamentally, performance management

helps develop quality leadership, which is a key element in strong ethical culture and business success.

The scope of ethics is so broad that it affects almost every decision made in our social interaction. Ethics is an integral part of individuals and management in all aspects of life, that is, from private life, social to organisation level. Ethics is as old as human race.

Leaders play a critical role in creating, sustaining and changing their organisation’s culture, through their own behaviour and through the programmes and activities they support and praise or neglect and criticise. All leaders must demonstrate behaviour that fosters an ethical environment, one that‘s conducive to ethical practices and that effectively integrates ethics into the overall organisational culture.

A key leadership responsibility is to ensure that the organisation makes it easy for employees to “do the right thing.” Leaders must foster an environment and

It is unethical to knowingly sell products that are faulty

It is unethical to do work only when under supervision

It is unethical to spend office time doing things unrelated to the office

KEY WORDS REGARDING BUSINESS ETHICS

Quick! Let’s check our facebook accounts before the

boss drops in.

Business EthicsFor interested parties that are

influenced by decision making or action of enterprises, it is regarded as

a standard for an enterprises’s decision making and action as well as ethical standard for policies, organisations

and behaviours.

Ethical Management

From CEO to staff, ethics management is a decision

standard that separates right or wrong and good or bad of personal

behaviour

ETHICS MANAGEMENT

I just unboxed the phone. I swear am not the one who broke the screen. I found it

that way.

I wonder if the boss has noticed I have not done a

thing the whole day.

I wonder if they noticed I have not done a thing the

whole day.


an organisational culture that supports doing the right thing, doing it well, and doing it for the right reasons, that is, reasons that are supported by ethical values.

A study conducted in the year 2000 by Boulstridge and Carrigan to investigate the response of consumer’s to ethical and unethical marketing behaviour concluded that most consumers lacked information to distinguish whether a company had or had not behaved ethically. Because of little awareness on the part of customers of any other socially responsible behaviour by companies, Boulstridge and Carrigan cited two multinational companies which despite being known offenders, continued having good sales. Most respondents in

the study agreed that social responsibility was not an important consideration in their purchasing behaviour. Hence even with knowledge about unethical activities by the company, some consumers still bought products from the offending company. Others argued that lack of information did mean that social responsibility was not placed high on their purchasing agenda. If they liked and regularly bought a product, they would find it hard to boycott the product over unethical behaviour. The most important purchasing criteria were price, value and quality and brand familiarity, meaning that consumers bought for personal reasons rather than societal ones.

In the business reality of the 21st century where management and intangible assets are key sources of competitive advantage, the individual behaviour of employees from top management to front-line workers can make or break an organisation’s reputation. This has a significant impact on share value, the ability to attract and retain clients, investors, employees, or customers, and the risk of compliance violations.

The Nestle boycott: Nestle aggressively pushed their breastfeeding formula in less economically developed countries (LEDCs), specifically targeting the poor. They made it seem that their infant formula was almost as good as a mother’s milk, which is highly unethical.

Rotten apples can make an otherwise ethical organisation unethical Unethical organisation can make an otherwise ethical employee unethical

All employs of Kasneb must abide by these values.

• INTEGRITY

• PROFESSIONALISM

• CUSTOMER FOCUS

• TEAMWORK

• INNOVATIVENESS

Core values of kasneb

ETHICS MANAGEMENT


Globalisation increases the potential impact of behavioural conflicts. An organisation operating in different countries may find that the values and ethical standards of other cultures clash with its own. Each of these issues contributes to the need for every organisation to define its own principles of behaviour by clearly outlining its organisational values and creating a code of ethics and corporate conduct that provides guidance in decision making internally and in relation to external parties and compliance requirements. Such guidance is a critical element in the creation of a framework for ethical management.

Global perspective of ethicsBusiness ethics has evolved through time and across disciplines into a discipline that is one of the most important topics in the field of business today. In the global context, management ethics can be defined as decisions about what is right or wrong (acceptable or unacceptable) in the organisational context of planning and implementing business activities in a global environment.

It is clear that changing values, as influenced by global media, and changing perceptions and cultures will impact global ethics. The most challenging aspect is that the global business does not have a single definition of “fair” or “ethical.” While culture influences the definitions of those ideals, many companies are forced to navigate this sensitive area very carefully, as it impacts both their profitability and reputations.

As a result of the Enron scandal and other recent scandals, there has been a strong push to improve business ethics. This is occurring on several fronts – action began by former New York attorney general and former governor Elliot Spitzer and others who sued

companies for improper acts, Congress passing of the Oxley Bill to impose sanctions on executives who sign financial statements later found to be fraudulent.

Ethics evolves over time. It is difficult for both companies and professionals to operate within one set of accepted standards or guidelines only to see them gradually evolve or change. For example, bribery has been an accepted business practice for centuries in Japan and Korea. When these nations adjusted their practices in order to enter the global system, the questionable practices became illegal. Hence a Korean businessman who engaged in bribery ten or twenty years ago may not do so today without finding himself on the wrong side of the law. Even in the United States, regulations and laws that encouraged or supported unethical business practices such as discrimination have changed tremendously over the last several decades. Who knows what the future holds? Some of the business practices that are commonly accepted today may become irrelevant in future.

What is considered right in one place may be wrong in another place. Likewise, ethics may vary from one place to another owing to religion and culture

What is “fair” or “ethical” varies from place to place because of religion, law and culture

Sources of business ethics

Religion

LawCulture

Why is she trying to shake my

hand?Why is he bowing?

Regulations and laws that supported unethical practices like discrimination in some countries have had to change because of globalisation

ETHICS MANAGEMENT


Use of unethical means to exceed or achieve set targets

Doing business globally opens the arena for conflicts in norms. Many multinational companies have codes of ethics, mission statements and integrity policies guiding their practices. However, when operating outside their boundaries they confront different sets of norms which sometimes conflict with their home based ones. In this conflict of norms, occasionally the ethical issue is not seen to be the same by the parties concerned. Ethics in management can change and develop as human evolution continues.

The senior managers of companies are under increasing pressure from owners and shareholders to provide ever-growing returns. The historic Sarbanes-Oxley legislation was created due to the public outrage over ethical and financial misconduct by the senior

management of companies. The high demands on exceptional performance have forced some managers to use unethical means to exceed or achieve set targets.

Local perspectives of business ethicsManagement ethics is approached from a compliance perspective rather than a culture building perspective that requires leadership commitment in order for it to be effective. Management ethics is practiced widely and forms a part of the management system of many firms in Kenya. Most companies/ institutions have their internal codes of conduct. In addition to strengthening integrity, Chapter 6 of the Constitution of Kenya requires all to act ethically. However despite systems and modalities put in place, unethical practices are widespread in our society. For example, corruption remains a major issue that seriously impedes political, social and economic

Kick backs are a common unethical practice in business

Are you guided by moral values or legal compliance. The first has to do with integrity and the other with simply being right. The first is an inner quality

while the latter is an outer quality. In the first instance, you do it out of your own will and in the latter, you are forced to do it by law. We need people who can stand up against unethical practices like fraud

As you can see, we did extremely well this quarter.

ETHICS MANAGEMENT

OUR CORE VALUES

IntegrityHonestyQuality

Do you expect me to show this to

shareholders?

Are you saying what I think you

are saying..... and that?


ETHICS MANAGEMENT

development of Kenya. Most private businesses are interested in making money irrespective of how the money is made. Making money is not wrong in itself; it is the manner in which firms conduct their businesses that raises ethical concerns.

The accounting profession has not been spared of unethical blame either. Research carried out by Kamau, C .et al (2012) shows that to achieve set goals, managers commonly practice creative accounting. These are accounting practices that are not conventionally accepted or practiced. These practices are performed with the objective of making the company appear to be financially stronger or weaker depending on the management‘s goals. Creative accounting is also known as

scholars. A study by Kamau, C. et al (2012) ascertains that tax avoidance and evasion are some of the major factors contributing to practice of creative accounting among companies in the private sector in Kenya. This raises the issue of ethical practices in accounting among Kenyan accountants and calls for accounting regulatory bodies to tighten the grip on financial reporting rules in a bid to curb creative accounting practices in Kenya.

In organisations, business ethics encompasses issues such as corporate governance, adherence to regulations, the effectiveness of board committees, accurate financial reporting auditing, executive compensation for the leadership of the organisation and the role of the CEO in setting ethical standards among others.

Instances of ethical misconduct are also seen in academia. According to the Center for Academic Integrity, 70% of students on most college campuses admit to some form of cheating. Cheating has also become a significant problem in high school, with 60% to 70% of students admitting to cheating, according to the center.

Unethical practices have led to collapse of companies, a recent example being that of Triton Kenya. Another example is that of the Kenya National Assurance Company. The once giant life assurance company collapsed due to mismanagement and theft of assets by employees.

Collusion during examinations is an unethical misconduct in academia

“Cooking” financial reports is a practice that goes against business ethics

“cooking the books”, “window dressing” or “earnings management.” Creative accounting is the transformation of accounting figures from what they actually are to what perpetrators desire by taking advantage of the existing rules or ignoring some or all of them. It may involve simple practices like window dressing as well as those which are sophisticated, such as off-balance sheet financing. The difference between creative accounting and fraud is that creative accounting is working within the regulatory framework but fraud involves breaking the law (Jones, 2011). There are four main forms of creative accounting, namely earnings management, income smoothing, aggressive accounting and big bath accounting.

Techniques, effects and detection of creative accounting has been identified and researched on by various

Don’t but me. They say figures don’t lie. Your job here is to make them lie.

But sir.....that’s unethical.


Ethical issues in managementPerformance management contributes to the success of an organisation through the alignment of values and behaviour with business goals, through employee evaluation and reward, and through employee development. The more that employee goals and organisation values are aligned, the stronger the ethical culture will be. Perceived fairness in the performance management process is essential so that it is part of the solution, not part of the problem. A culture of continuous improvement that squarely faces and deals with the development needs of employees and leaders will benefit when people are able to learn from their mistakes and, therefore, develop sustainably. Fundamentally, performance management helps develop quality leadership, which is a key element in strong ethical culture and business success.

A case study at the Zimbabwe Broadcasting Corporation found that top management and the board were corrupt. Procurement of goods and services were done without following proper tender procedures, thereby depriving the corporation of millions of dollars. There was no efficiency and effectiveness in the way service was being delivered. There was lack of accountability and transparency in the way business was being done. It was reported that employees went for over seven months without salaries yet top management and the board paid themselves handsomely. There was no relationship between the chief executive officer’s salary and performance of the organisation. Nepotism and intimidation were also reported to be high and this affected morale among employees and service delivery to the general public remained poor. It was noted that bad corporate governance and unethical conduct of top management affected both staff morale and service delivery.

Widespread and highly visible organisational misconduct and scandals such as Enron and WorldCom in the United States and in Europe, Parmalat (Italy) and Royal Ahold (Netherlands) have plagued global businesses. All four of these companies engaged in massive accounting frauds to overstate their earnings and had operated under unethical organisational cultures. Managers were involved in channel stuffing, inventory shifting strategies, deceptive sales techniques, financial fraud and other schemes to inflate earnings. Misconduct related to employees, suppliers, and consumers created discussions about right and wrong as well as the

appropriate legal consequences. Organisational ethics programmes were developed in public corporations as ethics became more institutionalised by the Federal Sentencing Guidelines for Organisations, especially the 2004 amendment.

The numerous scandals in business such as those at AIG, Tyco, WorldCom and Enron have raised many concerns about the emergence of unethical and irresponsible behaviour in organisations. The seemingly unending occurrence of instances of corruption in both business and politics has also activated consciousness about ethics in general and business ethics in particular.

Arguments are being made by governments and organisations such as Oxfam and Medecins Sans Frontieres on ethical grounds to allow cheaper access for consumers of drugs such as AZT. Pharmaceutical firms defend their pricing policies based on the consideration of other stakeholders such as shareholders, employees and the wider community who can only benefit from new product developments if high economic returns are made from existing drugs. In this situation, it is difficult to decide who should be considered most important. Is it stakeholders or consumers? Often it is difficult to make a consistent ethical judgement that achieves equal “good” or avoids harming all stakeholder interests. There remains a need for marketers to continue to seek to act with social responsibility.

Having various interests, objectives and beliefs, interest groups are involved in the public procurement system in several ways; such as lobbying legislative bodies to pass or alter procurement statutes, influencing implementation of these rules and influencing budget authorisation and appropriation processes. In addition to social and economic environment, public procurement practitioners are under other external pressures such as environmental protection movements, foreign policy commitments, politicians and other interested groups. The procurement functions are performed in a very complex environment. Both individual interest and factors in the external environment affects the extent to which managers can carry out procurement in an ethical manner.

ConclusionThere is no doubt that there are strong and persuasive reasons for managers to engage in and promote ethical behaviour within their organisations. The reasons range

ETHICS MANAGEMENT


from normative ones (managers are expected to be ethical and ought to be ethical) to the pragmatic or instrumental (it is in their self-interest to be ethical). Management ethics has become a vital concern to organisations and society over the past several decades. The Kenyan Government has established the Ethics and Anti-Corruption Commission, ethical requirement has been promulgated in chapter six of the Constitution of Kenya and many organisations have set an ethics and Integrity department in order to fight the vice of unethical conducts. However, much remains to be done.

For the management community to turn this situation around, significant efforts are required. Part of the challenge is coming to understand what management ethics means, why it is important and how it should be integrated into decision making. Principles of ethics from moral philosophy and management theory are available to inform interested managers. One of the most formidable challenges is avoiding immoral management, and transitioning from an immoral to a moral management mode of leadership, behaviour, decision making, policies and practices. Moral management requires ethical leadership. It entails more than just “not doing wrong.” Moral management requires that managers search out those vulnerable situations in which immorality may reign if careful, thoughtful reflection is not given by management. Moral management requires that managers understand, and be sensitive to, all the stakeholders of the organisation and their stakes. If the

moral management model is to be achieved, managers need to integrate ethical wisdom with their managerial wisdom and to take steps to create and sustain an ethical climate in their organisations. If this is done, the desirable goals of moral management are achievable.

There is still much to be done to understand and improve business ethics globally. The academic community can support business ethics with more research to determine the role of both the individual and organisational culture in building an effective ethics program. Businesses need to remain open to learning more about how to build an effective ethics initiative and understanding the importance of managing the internal organisational culture to maintain a commitment to integrity and transparency.

The importance of management ethics in all aspect of life cannot be expounded. It is a key ingredient to the success of any organisation and hence the need to incorporate it into the management system. To achieve ethical conduct, institutions as well as professional bodies should develop and practice their own ethical codes. An example is the accountants code of ethics. The intent of this code of ethics is to make all accounting professionals aware of their responsibility to act as change agents within their organisations, supporting the maintenance of effective internal controls and ensuring that their organisations have considered, adopted and fully implemented ethical codes.

Characteristics of compliance strategy

Ethos Conformity with externally imposed standards

Objective Prevent criminal misconduct

Leadership Lawyer driven

Methods Education, reduced discretion, auditing and controls, penalties

Behavioural assumptions

Autonomous beings guided by material self-interest

Characteristics of integrity strategy

Ethos Self-governance according to chosen standards

Objective Enable responsible conduct

Leadership Management driven with aid of lawyers, HR, others

Methods Education, leadership, accountability, organisational systems and decision processes, auditing and controls, penalties

Behavioural assumptions

Autonomous beings guided by material self-interest

Implementation of compliance strategy

Standards Criminal and regulatory law

Staffing Lawyers

Activities Develop compliance standards Train and communicateHandle reports of misconductConduct investigationsOversee compliance auditsEnforce standards

Education Compliance standards and system

Implementation of integrity strategy

Standards Company values and aspirationsSocial obligations, including law

Staffing Executives and managers with lawyers, others

Activities Lead development of company values and standardsTrain and communicateIntegrate into company systems, provide guidance and consultationAssess value performanceIdentify and resolve problemsOversee compliance activities

Education Compliance standards and system

Strategies for ethics management

ETHICS MANAGEMENT


Throughput is the amount of a product or service a company can produce and deliver to a client in a specific period of time. Businesses with high

throughput levels can take market share away from lower throughput firms, because they can produce that product or service more efficiently than their competitors.

In general terms, throughput is the maximum rate of production or the maximum rate at which something can be processed. It could be the productivity of a machine, procedure, process, or system over a unit period and is expressed in a figure-of-merit or a term meaningful in the given context, such as output per hour, cash turnover, number of orders shipped.

Throughput accounting is a principle-based and simplified management accounting approach that provides managers with decision support information for enterprise profitability improvement.

Throughput accounting was proposed by Eliyahu M. Goldratt (photo below) as an alternative to traditional cost accounting.

As an approach that is relatively new in management accounting, it identifies factors that limit an organisation from reaching its goals and then focuses on simple measures that drive behaviour in key areas towards reaching organisational goals.

It is cash-focused and does not allocate all costs (variable and fixed expenses, including overheads) to products and services sold or provided by an enterprise.

THROUGHPUT ACCOUNTING AND THE THEORY OF CONSTRAINTS

3 trucks3 gas pumps

Throughput = 3/minute (no waiting)

Eliyahu M. Goldratt: “ I say an hour lost at a bottleneck is an hour out of the entire system. I say an hour saved at a non-bottleneck is worthless. Bottlenecks govern both throughput and inventory.”

CPA DERRICK MAJANI, HEAD OF FINANCE, BANDARI SACCO LTD, MOMBASA



The idea of throughput is part of the theory of constraints in business management. The guiding ideology of the theory of constraints is that a chain is only as strong as its weakest link. Advocates of the theory attempt to minimise how weak links affect a company’s performance.

Goldratt postulated that every process has a constraint (bottleneck) and focusing improvement efforts on that constraint is the fastest and most effective path to improved profitability. By identifying and exploiting the constraint that limits any system of work, Goldratt believed that management would get control, execute well, release capacity and enjoy success.

The theory of constraints is applied within an organisation to increase throughput by following what are called ‘the five focusing steps as identified by Goldratt. These steps are methodologies that have been developed to help organisations deal with constraints, otherwise known as bottlenecks, within the system as a whole (rather than any discrete unit within the organisation).

THE FIVE FOCUSING STEPS

Step 1: Identify the system’s bottlenecks

In many scenarios, the bottleneck resource is known. If not, it is usually straight forward to work out. For example, an organisation has market demand of 50,000 units for a product that goes through three processes: cutting, heating and assembly. The total time required in each process for each product and the total hours available are shown in the table below.

Process Cutting Heating Assembly

Hours per unit 2 3 4

Total hours available 100,000 120,000 220,000

A system is as weak as its weakest link

A system typically only has one

constraint at a time

A system optimum performance is NOT the sum of local

optimization. Strengthening anything other than the weakest

link has no impact on the performance of the system.

This is the weakest link. Making it stronger will allow the chain to

carry more weight.

Systems succeed or fail as an integrated system,

not a collection of discrete tasks.

Strengthening this link will have zero impact on the chains ability to carry

more weight.

THE SYSTEM CAN CARRY ONLY 10KG

10Kg

20Kg

50Kg 5 Focusing

steps

Go back to step #1

Identify the constraint

Exploit the constraint

Elevate the constraint Subordinate

everything else to the constraint

5

1

2

34

Since the strength of the chain is determined by the weakest link, then the first step to improve an organisation must be to identify the weakest link - Goldratt Peter at the back of the line, a half

a mile behind the lead hiker

Peter at the front of the line, huffing and puffing away with

everyone behind him

Peter’s load lightened and shared; the whole troop makes good time

Ronnie: the slowest hiker

A system can produce only to the bottleneck’s capacity - max throughput is 40 units/day

BOTTLENECK

60 units per day

40 units per day

70 units per day

60 units per day

Hey, wait!

I am hurrying!



The total time required to make 50,000 units of the product can be calculated and compared to the time available in order to identify the bottleneck.

Process Cutting Heating Assembly

Hours per unit 2 3 4

Total hours required for 50,000 units

100,000 150,000 200,000

Total hours available 100,000 120,000 220,000

Shortfall in hours 0 30,000 0

It is clear that the heating process is the bottleneck. The organisation will in fact only be able to produce 40,000 units (120,000/3) as things stand.

Step 2: Decide how to exploit the system’s bottlenecks This involves making sure that the bottleneck resource is actively being used as much as possible and is producing as many units as possible. So, ‘productivity’ and ‘utilisation’ are the key words here. In the above case, productivity from the use of heating hours should be optimised.

Step 3: Subordinate everything else to the decisions made in Step 2 The main point here is that the production capacity of the bottleneck resource should determine the production schedule for the organisation as a whole. Idle time is unavoidable and needs to be accepted if the theory of constraints is to be successfully applied. To push more work into the system than the constraint can deal with results in excess work-in-progress, extended lead times, and the appearance of what looks like new bottlenecks, as the whole system becomes clogged up. By definition, the system does not require the non-bottleneck resources to be used to their full capacity and therefore they must sit idle for some of the time.

3. SUBORDINATE ALL ELSEAlign the whole system or organisation to support the decisions made above.

Some options:• Limit WIP of upstream to match.• Upstream do preparation work.• Upstream improve their quality.• Pair upstream with constraint staff.

1. IDENTIFY THE CONSTRAINTConstraint: The resource or policy that prevents the organisation from obtaining more of the goal.

Symptoms• Work piles up waiting to be processed by the constraint.• Resource is heavily stressed.• Resources downstream from constraint are regularly idle.

2. EXPLOIT THE CONSTRAINTGet the most capacity out of the constrained process, with only minor changes.

Some options:• Shield them from interruptions• Limit their WIP• Reduce their non value add work.Note: Do not ask them to do overtime

Activating a resource is like pressing the ON switch of a machine; it runs whether or not there is any benefit to be derived from the work it’s doing - Goldratt

Throughput accounting

Cost versus throughput accounting

Cost accountingInventory is an assetEfficiency = function/shilling (hours) Labour is a “variable” costPeople sitting idle are discarded!

Inventory is a liabilityEfficiency = function/direct costs (idle or not) Labour is a “fixed” costPeople sitting idle are a part of the system!



Step 4: Elevate the system’s bottlenecks Elevating a bottleneck without cost is unusual. Normally, elevation will require capital expenditure. However, it is important that an organisation does not ignore Step 2 and jumps straight to Step 4, and this is what often happens. There is often untapped production capacity that can be found if you look closely enough. Elevation should only be considered once exploitation has taken place.

Step 5: If a new constraint is broken in Step 4, go back to Step 1, but do not let inertia become the system’s new bottleneck When a bottleneck has been elevated, a new bottleneck will eventually appear. This could be in the form of another machine that can now process less units than the elevated bottleneck. Eventually, however, the ultimate constraint on the system is likely to be market demand. Whatever the new bottleneck is, the message of the theory of constraints is: never get complacent. The system should be one of ongoing improvement because nothing ever stands still for long.

I am now going to have a look at an example of how a business can go about exploiting the system’s bottlenecks, that is, using them in a way so as to maximise throughput. In practice, there may be lots of options open to the organisation. In the context of an examination question, however, you are more likely to be asked to show how a bottleneck can be exploited by maximising throughput via the production of an optimum production plan. This requires an application of the simple principles of key factor analysis, otherwise known as limiting factor analysis or principal budget factor.

LIMITING FACTOR ANALYSIS AND THROUGHPUT ACCOUNTINGOnce an organisation has identified its bottleneck resource, as demonstrated in Step 1 above, it then has to decide how to get the most out of that resource. Given that most businesses are producing more than one type of product (or supplying more than one type of service), this means that part of the exploitation step involves working out what the optimum production plan is, based on maximising throughput per unit of bottleneck resource.

In key factor analysis, the contribution per unit is first calculated for each product, then a contribution per unit of scarce resource is calculated by working out how much of the scarce resource each unit requires in its production. In a throughput accounting context, a very similar calculation is performed, but this time it is not contribution per unit of scarce resource which is calculated, but throughput return per unit of bottleneck resource.

4. ELEVATE THE CONSTRAINTMake other major changes needed to break the constraint. Enhance the capability of the constraint to increase its throughput further.

Some options:• Improve their tools.• Improve their environment.• Improve their team work.• Hire more people.

5. REPEAT• The bottleneck should now have shifted.• Start all over again.

Make the bottlenecks work only on what will contribute to throughput today … not nine months from now. That’s one way to increase capacity at the bottlenecks. The other way you increase bottleneck capacity is to take some of the load off the bottlenecks and give it to non-bottlenecks.

Queues at upstream to be serviced

Upstream DownstreamBottleneck(Constraint)

Bottleneck restricts the flow

Downstream starved of full flow



Throughput is calculated as ‘selling price less direct material cost.’ This is different from the calculation of ‘contribution’, in which both labour costs and variable overheads are also deducted from selling price. It is an important distinction because the fundamental belief in throughput accounting is that all costs except direct materials costs are largely fixed – therefore, to work on the basis of maximising contribution is flawed because to do so is to take into account costs that cannot be controlled in the short term anyway. One cannot help but agree with this belief really since, in most businesses, it is simply not possible, for example, to hire workers on a daily basis and lay workers off if they are not busy. A workforce has to be employed within the business and available for work if there is work to do. You cannot refuse to pay a worker if he is forced to sit idle by a machine for a while.

Example 1

Beta Ltd. produces 3 products; E, F and G. Details of the production are shown below:

E F G

Sh. Sh. Sh.

Selling price per unit

120 110 130

Direct material cost per unit

60 70 85

Maximum demand (units)

30,000 25,000 40,000

E F G

Time required on the bottleneck resource (hours per unit)

5 4 3

There are 320,000 bottleneck hours available each month.

Required:

Calculate the optimum product mix for each month.

Suggested solution

A few simple steps can be followed:

1. Calculate the throughput per unit for each product.2. Calculate the throughput return per hour of

bottleneck resource.3. Rank the products in order of the priority in which

they should be produced, starting with the product that generates the highest return per hour first.

4. Calculate the optimum production plan, allocating the bottleneck resource to each one in order, being sure not to exceed the maximum demand for any of the products.

It is worth noting here that you often see another step carried out between Step 2 and Step 3 above. This is the calculation of the throughput accounting ratio for each product. Thus far, ratios have not been discussed, and while I am planning on mentioning them later, I have never seen the point of inserting this extra step when working out the optimum production plan. The ranking of the products using the return per factory hour will always produce the same ranking as that produced using the throughput accounting ratio, so it doesn’t really matter whether you use the return or the ratio.

E F G

Sh. Sh. Sh.

Selling price per unit 120 110 130

Direct material cost per unit 60 70 85

Throughput per unit 60 40 45

The goal is not to improve one measurement in isolation. The goal is to reduce operational expenses AND reduce inventories and increase throughput simultaneously.

Operating Expenses

Operating Expenses

Throughput (Production)

Inventory

Cost Accounting

Cost Accounting vs Throughput Accounting

Throughput Accounting

Mos

t Foc

us

Least Focus

Inventory

Production



E F G

Time required on the bottleneck resource (hours per unit)

5 4 3

Return per factory hour 12 10 15

Ranking 2 3 1

It is worth noting that, before the time taken on the bottleneck resource was taken into account, product E appeared to be the most profitable because it generated the highest throughput per unit. However, applying the theory of constraints, the system’s bottleneck must be exploited by using it to produce the products that maximise throughput per hour first (Step 2 of the five focusing steps). This means that product G should be produced in priority to E.

In practice, Step 3 will be followed by making sure that the optimum production plan is adhered to throughout the whole system, with no machine making more units than can be absorbed by the bottleneck, and sticking to the priorities decided.

When answering a question like this in an examination, it is useful to draw up a small table, like the one shown below. This means that the marker can follow your logic and award all possible marks, even if you have made an error along the way.

Pro

duc

t

No

. of

unit

s

Hrs

per

uni

t

Tota

l hrs

T/p

ut p

er h

r

Tota

l t/p

ut

G 40,000 3 120,000 Sh. 15 Sh. 1,800,000

E 30,000 5 150,000 Sh. 12 Sh. 1,800,000

F 12,500 4 50,000 Sh. 10 Sh. 5000,000

Sh. 4,100,00

Each time you allocate time on the bottleneck resource to a product, you have to ask yourself how many hours you still have available. In this example, there were enough hours to produce the full quota for G and E. However, when you got to F, you could see that out of the 320,000 hours available, 270,000 had been used up

(120,000 + 150,000), leaving only 50,000 hours spare.

Therefore, the number of units of F that could be produced was a balancing figure – 50,000 hours divided by the four hours each unit requires – that is, 12,500 units.

The above example concentrates on Steps 2 and 3 of the five focusing steps. I now want to look at an example of the application of Steps 4 and 5. I have kept it simple by assuming that the organisation only makes one product, as it is the principle that is important here, rather than the numbers. The example also demonstrates once again how to identify the bottleneck resource (Step 1) and then shows how a bottleneck may be elevated, but will then be replaced by another. It also shows that it may not always be financially viable to elevate a bottleneck.

Example 2

Cat Ltd. makes a product using three machines – X, Y and Z. The capacity of each machine is as follows:

Machine X Y Z

Capacity per week (units) 800 600 500

The demand for the product is 1,000 units per week. For every additional unit sold per week, net present value increases by Sh. 50,000. Cat Ltd. is considering the following possible purchases (they are not mutually exclusive):

• Purchase 1: Replace machine X with a newer model. This will increase capacity to 1,100 units per week and costs Sh. 6 million.

• Purchase 2: Invest in a second machine Y, increasing capacity by 550 units per week. The cost of this machine would be Sh. 6,800,000.

• Purchase 3: Upgrade machine Z at a cost of Sh. 7,500,000 thereby increasing capacity to 1,050 units.

Required:

Determine Cat Ltd’s best course of action.

Suggested solution

First, it is necessary to identify the system’s bottleneck resource. Clearly, this is machine Z, which only has the capacity to produce 500 units per week. Purchase 3 is therefore the starting point when considering the logical



choices that face Cat Ltd. It would never be logical to consider either Purchase 1 or 2 in isolation because of the fact that neither machine X nor machine Y is the starting bottleneck. Let’s have a look at how the capacity of the business increases with the choices that are available to it.

X Y Z Demand

Current capacity per week

800 600 500* 1,000

Buy Z 800 600* 1,050 1,000

Buy Z and Y 800* 1,150 1,050 1,000

Buy Z, Y and X

1,100 1,150 1,050 1,000*

* = bottleneck resource

From the table above, it can be seen that once a bottleneck is elevated, it is then replaced by another bottleneck until ultimately market demand constrains production. At this point, it would be necessary to look beyond production and consider how to increase market demand by, for example, increasing advertising of the product.

In order to make a decision as to which of the machines should be purchased, if any, the financial viability of the three options should be calculated.

Buy Z

Additional sales = 600 - 500 = 100 units

Sh. “000”

Benefit: 100 x Sh. 50,000 5,000

Cost (7,500)

Net cost (2,500)

Buy Z and Y

Additional sales = 800 - 500 = 300 units

Sh. “000”

Benefit : 300 x Sh. 50,000 15,000

Cost Sh. 7,500,000 +

Sh. 6,800,000(14,300)

Net benefit 700

Buy Z, Y and X

Additional sales = 1,000 - 500 = 500 units

Sh. “000”

Benefit: 500 x Sh. 50,000 25,000

Cost (Sh. 7,500,000 + Sh. 6,800,000 + Sh. 6,000,000)

(20,300)

Net benefit 4,700

The company should therefore invest in all three machines if it has enough cash to do so.

The example of Cat Ltd. demonstrates the fact that, as one bottleneck is elevated, another one appears. It also shows that elevating a bottleneck is not always financially viable. If Cat Ltd. was only able to afford machine Z, it would be better off making no investment at all because if Z alone is invested in, another bottleneck appears too quickly for the initial investment cost to be recouped.

RATIOSI want to finish off by briefly mentioning throughput ratios. There are three main ratios that are calculated: (1) return per factory hour, (2) cost per factory hour and (3) the throughput accounting ratio.

“We should be trying to optimize the whole system. Some resources have to have more capacity than others. The ones at the end of the line should have more than the ones at the beginning—sometimes a lot more. Am I right?” - Goldratt



Throughput ratios explained1. Return per factory hour: Throughput per unit/

product time on bottleneck resource. As we saw in Example 1, the return per factory hour needs to be calculated for each product.

2. Total factory costs/total time available on bottleneck resource: The ‘total factory cost’ is simply the ‘operational expense’ of the organisation referred to in the previous article. If the organisation was a service organisation, we would simply call it ‘total operational expense’ or something similar. The cost per factory hour is across the whole factory and therefore only needs to be calculated once.

3. Return per factory hour/cost per factory hour: In any organisation, you would expect the throughput accounting ratio to be greater than 1. This means that the rate at which the organisation is generating cash from sales of this product is greater than the rate at which it is incurring costs. It follows on, then, that if the ratio is less than 1, this is not the case, and changes need to be made quickly.

ConclusionMost production scenarios feature a scarce resource (bottleneck). The challenge for production managers is to ensure optimal utilisation of the scarce resource. As illustrated above, it is possible to analyse productivity for both available and scarce resources and make optimal production decisions.

There is no choice in the matter; either you manage the constraints or they manage you. The constraints will determine the output of the system whether they are acknowledged and managed, or not.

Anything that limits a system from

achieving higher performance

versus its goal. A thinking

process that enables people to invent

simple solutions to seemingly complex

problems.

Theory of constraints

“Bringing a company closer to its goal. Every action that brings a company closer to its goal is productive” - Goldratt

Challenge

Resource whose capacity is close to capacity and could be a bottleneck if it is not scheduled correctly.

Does the CCR become a bottleneck if “cutting” station has an unexpected breakdown for 30 minutes?(Assume 100 units are produced in an 8 hour shift)

Where is the bottleneck?What is the throughput?What is the percentage utilisation of each workstation?What is the throughput if C has a 1 in 5 defect rate?

Which saves time when reduced?

Can a non-bottleneck become a bottleneck?

Non-bottlenecks How do you find a bottleneck?


Introduction

Non-financial perfomance indicators are based on no-financial information which may originate within the operating department and it is used to

monitor activities within the department. Non-financial performance evaluation gives more timely indication of the trend of performance achieved than financial performance evaluation.

Non-financial performance evaluation uses qualitative information that indicates whether managers or responsible partners are working as expected. When an organisation is using non-financial performance indicators, they always focus on critical success factors that vary from business to business.

These include:

(i) Having a wide range of products that people want.(ii) Brand name.(iii) Low prices.(iv) Quick delivery.(v) Customer satisfaction.

Areas within which a firm employs non-financial performance measures include:

1. Service quality: the following performance measures are used to evaluate service quality:• Number of complainants.• Customer waiting time.• On time deliveries.• Number of new accounts loss or gain.

NO

N-FINANCIAL PERFOMANCE EVALUATION

Financial versus non-financial performance indicators

“Traditional” financial metrics while critical in measuring financial performance fail on many fronts. They:• Don’t capture relationships with customers, employees,

suppliers and other stakeholders.• Don’t provide information on future revenues and profits.• Don’t provide information on the status of product innovation.• Don’t provide information on the efficacy of governance and

management processes.

Litmus tests for performance indicators

Characteristic Key Question

Linked to objectives

Can the measure be aligned with an objective?

Actionable Can action be taken to improve the metric’s performance?

Simple Can the measure be easily and clearly explained?

Credible Is the measure resistant to manipulation?

Integrated Can the measure be linked both down and across the organisation?

Measurable Can the measure be quantified?

ISAAC T. MAINA (CPA), Lecturer, Excel Institute of Professionals, Thika


NON-FINANCIAL PERFORMANCE EVALUATION

2. Production performance: the following performance measures are used:• Set up times.• Output per employee.• Schedules adherence.• Manufacturing lead time.

3. Marketing effectiveness. This can be evaluated using: • Trends in marketing share.• Sales volume forecast versus actual sales.• Sales volume growth.• Customer visit per sales person.• Number of new customers quoted.

4. Human resource. This can be evaluated using:• Staff turnover.• Number of complainants from the customer

side.• Days lost through absenteeism.• Rate of attending to tasks.

5. Research and development: This can be evaluated using:• Frequency of new products concepts.• Success history of previous products.• Quality of the product.• Proportion of new products and services to

old ones.

Models of non-financial performance measurementThe following models of non-financial performance measurement will be discussed.

• Performance pyramid.• Fitzgerald and moon building block model.• Performance prisms.• Kaizen.

1. Performance pyramidThe Performance Pyramid also known as the SMART Strategic Measurement and Reporting Technique by Cross and Lynch 1991 viewed businesses as performance pyramids. The attractiveness of this framework is that it links the business strategy with day-to-day operations. Objectives are top down and measurements are top up.

Supporters of performance pyramid claim that there must be objectives to be achieved such as:

• Market share.• Customer satisfaction.• Flexibility both internal and external.• Quality of the product improvement.• Delivery of the product.

To measure the above objectives, we use the following:

(i) Financial data - that will show improvement of the market.

(ii) Productivity - which will indicate customers satisfaction based on increase in productivity or decrease in productivity.

(iii) Cycle time - this will indicate number of the set ups made and efficiency of production to improve the quality.

(iv) Waste - it is important for each organization to know the cost of waste within their department which will indicate whether there is improvement in productivity or not.

Performance pyramid recognizes that corporate vision comes at first point when measuring performance to ensure that there is no deviation from objective

2. Fitzgerald and Moon building block modelThis emerged from the year 1996 after a research conducted by Philip Moon and Lin Fitzgerald. They proposed a model based on six dimensions, three standards and three measures. They developed a building block model to represent the dimensions, measures and standards as shown in the following diagram.

MarketObjectives

MeasuresBusiness

Business operating systems

Departents and work

centresQuality Delivery

Customer satisfaction

Corporate vision

External effectiveness

Flexibility

Cycle time

Financial

Productivity

Waste

Internal efficiency

Operations



Dimensions

These are the areas of business performance which need to be monitored and controlled if business goals are to be achieved. They include:

• Competitiveness - this measures market share and relative cost.

• Financial performance - it indicates rate of profitability and continuity.

• Quality of service - this refers to the level of benefit customers expect from the product.

• Flexibility - refers to ability of the organisation to alter volumes or specifications quickly.

• Resource utilisation - this refers to the percentage of full capacity utilised in each process or assets that are being used.

• Innovation - this measures product and process improvements and the time it takes to implement.

Standards

These refer to what performance measures should possess. They include:

(i) Ownership - performance measures should be acceptable to every one. Employees should be involved in identification of measures as opposed to the measures being imposed on them.

(ii) Achievability - performance measures should be realistic, therefore employees will not be motivated to achieve a target if considered to be impossible.

(iii) Fairness - performance measures should be equally challenging for all parts of the business.

Measures

This refers to the properties of rewards for each reward scheme. They include:

(i) Clarity - reward scheme should be clearly communicated to employees in advance.

(ii) Motivation - reward scheme should be set in a manner which motivates employees to achieve the business goals.

(iii) Controllability - employees should only be rewarded or penalised for the results over which they control or influence.

3. Performance prismsIt is a second generation performance measurement and management framework that is innovative in its approach. Its advantages over other frameworks are that:

(i) It addresses all parts of an organisation.(ii) It considers all the stakeholders.(iii) It tries to show the relationship of each stakeholder

and organisation processes.

The 5 pillars or facets of prismThe performance prism aims to manage the performance of an organisation from five interrelated facets as follows:

(i) Stakeholder satisfaction: this first facet of the prism focuses on who are the stakeholders and what they want. The importance of the stakeholders mapping is recognised. Stakeholders mapping means identifying the key stakeholders and determining how important each of them is to the organisation. This may be based on how much power they have and on whether or not they are likely to use it, for example, if majority of employees are members of a trade union, then employees will hold a significant influence over the organisation. The major stakeholders of an organisation and what they might typically want are as follows:• Investors (both equity and debt investors) -

typically want a return on the investment in form of capital gains, reward in form of interest or dividends and reports from the organisation’s management team.

BUILDING BLOCKS FOR PERFORMANCE MEASUREMENT SYSTEMS

DIMENSIONS

ProfitCompetitivenessQuality of service

Resource utilisationFlexibility

Innovation

REWARDSSTANDARDS

OwnershipAchievability

Equity

ClarityMotivation

Controllability

Continued on page 38



• Customers - they want products (goods and services) of the right quality, the right price and at the right place.

• Employees - they seek interesting work, empathy from their employer, to learn and improve transferable skills and to receive a decent level of remuneration.

• Suppliers and joint venture partners - they want a profitable relationship which enables their businesses to grow.

• Regulators - they want the organisation to act legally, to act fairly, to act safely and report their actual activities fully and truly.

(ii) Stakeholder contribution - organisations are becoming more demanding in what they expect from their own stakeholders. This second facet of performance prism examines and identifies exactly what the organisation wants from its stakeholders. The organisation comes up with ways to measure whether or not the stakeholders are providing their end of the bargain. An organisation may, for instance, want the following from these stakeholders:

(a) Investors - the organisation may require capital for growth from investors and they may want to know their willingness to take more risk.

(b) Employees - the organisation requires flexibility and multiple skills from employees.

(c) Regulators - the organisation requires regulators to understand the business set up, therefore they should provide proper laws to govern the

business.(iii) Strategies - many management frameworks

start with strategies. There is a myth that having identified the strategies an organisation will use, selecting appropriate performance measures is easy. This is largely because many people confuse strategies and goals.

(iv) Processes - after identifying the strategies, an organisation needs to find out if they have the right business processes to support the strategies. Many organisations classify their business processes into four categories:• Developing products and services.• Generating the demand.• Fulfilling the demand.• Planning and managing the enterprise.

These processes can then be subdivided into more detailed processes. Measures will then be developed to see how well the processes are working. Management will have to identify the most important processes and focus attention on these rather than simply measuring the functions of all processes. This will involve the following techniques:

• Business process reengineering (BPR) - this is used to identify any redundant processes within the organisation.

• Value chain analysis - This may be employed to identify what the key processes within the organisation are that will improve the value of the trial products.

(v) Capabilities - these are the people, practices, technologies and infrastructure required to enable a process to work. It is important that the right capabilities exist within an organisation in order to support the processes identified in the process facets of the performance prism. In the capabilities facet, the organisation needs to identify which capabilities are required and identify performance measures to see how well these capabilities are being performed. An example of an “order to cash” fulfillment process may require the following capabilities:• Customer order handling.• Planning and scheduling.• Procurement.• Manufacturing.• Distribution.

PROCESSES

PERFORMANCE PRISM

CAPABILITIESSTRATEGIES

STAKEHOLDER CONTRIBUTION

STAKEHOLDER SATISFACTION

CorporateBusiness unitBrandsProductsOperating

Develop product and servicesGenerate demandFulfill demandPlan & manage enterprise

Investors, customers and intermediaries

Employees, regulators and communities

SuppliersPeoplePracticesTechnologyInfrastructure

Continued from page 35



4. KaizenKaizen means continuous improvement involving everyone in the organisation, from the top management to the managers, to the supervisors and then to workers. In Japan, the concept of Kaizen is so deeply engrained in the mind of both managers and workers. Having a mind to continuously improve has become a philosophy of the Japanese workforce. The word kaizen is derived from two words, namely Kai and Zen. Kai means to break apart while Zen means improve upon existing situation. The Kaizen philosophy upholds the following principles:

(a) Principle of team work - each organisation should have team work to ensure that the organisation is working with one objective.

(b) Improvement - to have a continuous way of improving processes.

(c) Leadership - proper guidelines should be given to ensure goals are achieved.

(d) Cross functional teams - different cost centres working together to achieve common goals.

(e) Discipline in the work place - there should be rules and regulations to govern the processes.

(f) Process goal - there should be a starting point of process and emphasis for the process that will create a map to create a goal.

(g) Productivity improvement; there must be productivity improvement where level of production should be increased.

Kaizen pillarsKaizen has three key pillars, namely:

• Housekeeping.• Waste elimination.• Standardisation.

These are explained below:

(i) HousekeepingThis is the process of managing the workplace. In Japan, the work place is known as “gemba.” It is the real place where value is added to a product or services before passing it to the next process.

Gemba uses five methodologies as follows:

• Sciri - means sort what is not needed. The organisation puts red tags on those items which are considered irrelevant. All red-tagged items are then eliminated.

• Seiton - to straighten what must be kept. Make things visible, put tools on pegboard then outline the process to perform the laid down activities.

• Seiso - scrub everything that remains clean and paint to provide a pleasing appearance.

• Seiketsu - spread the clean and check the routine. When others see improvement in the kaizen area, it gives them the training and time to improve their work area.

• Shistuke - this refers to standardisation and self-discipline.

The management and employees must work together to fulfil the requirements for each category with 3 factors:1. Visual management 2. The role of the supervisor3. Importance of training and creating a learning organisation

THREE PILLARS OF KAIZEN



(ii) Waste eliminationIn Japan, waste is made. The resource of each process (people and machines) either add value or remove value. A non-value adding activity is classified as “muda” in Japan, and it should be eliminated. There are two classifications of muda in manufacture or office contexts.

Muda in manufacturing - examples include shipping defective parts, waiting for inspection of a product, excess inventory.

Muda in offices- examples include passing on work that contains an error, signature approval where there is bureaucracy, copies, files or a lot of paper work, excessive documentation.

(iii) StandardisationStandards are set by management but they must be able to change when the environment changes. Companies can achieve dramatic improvement by reviewing standards periodically, collecting and analysing data and engaging teams to conduct problem solving activities. Once standards are in place and are being followed, deviations alert workers that there is a problem. The employees will then review the standards and either correct the deviations or advise management on changing and improving the standards. This should be a never ending process and it is better explained and presented.

Incentive schemesThere is a wide range of incentive schemes for management and staff, each with a different cost. They include financial and non-financial schemes for individuals and group schemes and could be short term or long-term and so on.

Any move towards standardisation is a move in the right direction

WHY PROCESS STANDARDISATION?

Improves organisational management:• Facilitates early identification and proactive management

of risks• Improves accuracy of estimates• Improves external relations, as the company presents a

single face to its suppliers and customers• Provides a stronger foundation for any organisational

restructuring, as processes are similar across similar job functions

• Improves knowledge management (more opportunities to leverage and reuse knowledge)

• Facilitates knowledge sharing and applied learning across organisational boundaries

• Facilitates various organisational reviews• Increases organisational flexibility, as resources such as

people and assets can be reassigned according to market requirements

• Improves employee retention, as people understand their jobs and what’s expected of them

• Enables implementation of process control methods (collecting similar metrics and reporting on them)

An incentive scheme is a plan or programme to motivate an individual for good performance. An incentive is most frequently built on monetary

rewards, but may also include a variety of non-monetary rewards or prizes

INCENTIVE SCHEMES

DefectsReprocessing or correcting work Inventory

Building and storing products the customer

has not ordered

MotionExtra physical/mental motion that doesn’t

add value

WaitingEmployees waiting

for another process or information

Over production

Producing more than what the customer

needsIntellectNot using employees

full intellectual contribution

Over processingAdding excess value when the customer does not require it

WASTETransportationMoving from one place to another

EIGHT TYPES OF WASTE (MUDA)



Financial incentives can help to improve performance because staff and management can earn extra money. They include:

• Profit related and share option skills.• Bonuses.• Commissions.

Non-financial schemes/non-pay schemes do not include any financial benefits. Examples include:

• Formal recognition awards.• Holiday vouchers.• Gifts.• Use of company cars.

Whichever scheme is adopted by the organisation, the key aims are to improve performance and encourage staff to remain in the organisation for a long time.

A good incentive scheme should be based on the following principles:

• Equity - a good incentive scheme should treat all the members of the scheme equally and fairly.

• Clarity - a good managerial incentive scheme should have clear objectives and clear strategies on how goals will be achieved. There should be a clear standard set for one to qualify for an incentive.

• Detailed - a good incentive scheme for management of performance should have all the information required so that staff will be motivated to achieve the goals.

• Measurable - a good incentive scheme should be measurable, that is, it can be quantified in monetary terms.

Service industry performanceService industry performance always relies on exceptional customer service to ensure strong operation and to attract repeat business. In many cases, it is not possible to measure service industry performance but when management is setting goals, there is need to set a system to gauge and measure performance in key service areas.

Performance measurement system in the service industry should have the following:

No limits to earnings

Mutual agreement required

Easy to understand, must be fair to all

Fool proof tracking of operator performances

The company must establish best methods and fair standard times

Pre-requisites of a structured incentive scheme

Supervisors must be included

The carrot should be worthwhile going for

WIP levels must be controlled


1. Service initiatives - These include on-the-job training and peer-to-peer mentoring. Such incentives provide a mechanism for employees to approach management with concerns and suggestion to increase service performance.

2. Setting goals - develop clear and measurable service goals. These can help employees in the service industry to understand management expectations and set the stage for how an organisation wants customers treated. Goals can be set by departments or individuals and be monitored and measured through customers’ satisfaction surveys and performance appraisals. Goals should be clearly defined and have timelines for completion.

3. Performance indicators develop a criterion for measuring goals, progress and performance. In the service sector, indicators could include high marks on customers’ feedback survey, increased repeat business figures, production output level, number of orders met, number of customers referred, and number of complaints from customers.

4. Performance evaluation - staff in service industry should be regularly evaluated on their attitude towards customers, knowledge of customers, product and service provided by the staff. Employees can be evaluated on their goal progress and where

there are problems, a process of mentoring and training to improve performance level should be developed.

5. Value performance - regularly measure performance and value it based on service areas which are the cornerstone of the organisation. With such a system in place, organisations can monitor customer services, get employees feedback, notice areas of concern and quickly fix problems before they become constraints.

ConclusionAlthough non-financial performance measures are increasingly becoming important in decision-making and performance evaluation, companies should not

simply copy measures used by others. The choice of measures must be linked to factors such as corporate strategy, value drivers, organisational objectives and the competitive environment. In addition, companies should remember that performance measurement choice is a dynamic process – measures may be appropriate today, but the system needs to be continually reassessed as strategies and competitive environments evolve.

By supplementing accounting measures with non-financial data about strategic performance and implementation of strategic plans, companies can communicate objectives and provide incentives for managers to address long-term strategy.


COMPOSITION OF FEDEX’S SERVICE QUALITY INDEX (SQI)Failure type Weighting

factor (WF)Number of

incidents (NI)Daily Points

= WF x NILate delivery - right way 1Late delivery - wrong way 5Tracing request unanswered 1Complaints reopened 5Missing proofs of delivery 1Invoice adjustments 1Missed pickups 10Lost packages 10Damaged packages 10Aircraft delays (minutes) 5Overcharged (packages missing label) 5Abandoned calls 1

Total failure points (SQI) XXX,XXX

SOFT AND HARD MEASURES OF SERVICE QUALITYType Nature Aspects

SOFT MEASURES Not easily observed, must be collected by talking to customers, employees or others

Provide direction, guidance and feedback to employees on ways to achieve customer satisfaction

Can be quantified by measuring customer perceptions and beliefs

HARD MEASURES Can be counted, timed or measured through audits

Typically operational processes or outcomes

Standards often set with reference to percentage of occasions on which a particular measure is achieved

Control charts are useful for displaying performance over time against specific quality standards.


Introduction

The umbrella body for professional accountants globally is the International Federation of Accountants (IFAC). One of the independent

standard setting boards under IFAC is the International Accounting Education Standards Board (IAESB). IAESB is responsible for developing and promoting International Education Standards (IESs) for professional accountants and aspiring professional accountants globally. These standards are grouped into two; Initial Professional Development (IPD) standards which relate to the accounting qualification process, including entry requirements and required competencies, and continuous professional development (CPD) which relates to post qualification professional growth.

The IESs issued by the IAESB are highlighted below:

(i) IES 1: Initial Professional Development - Entry requirements to a programme of professional accounting education.

(ii) IES 2: Initial Professional Development - Technical Competence.

(iii) IES 3: Initial Professional Development - Professional Skills.

(iv) IES 4: Initial Professional Development - Professional Values, Ethics and Attitudes.

(v) IES 5: Initial Professional Development - Practical Experience.

(vi) IES 6: Initial Professional Development - Assessment of Professional Capabilities and Competence.

(vii) IES 7 - Continuing Professional Development. (viii) IES 8 - Competence Requirements for Audit

Professionals.IES 5 prescribes the practical experience required of aspiring professional accountants (in this case, CPA

students) by the end of the qualification process (IPD). Aspiring professional accountants are required to acquire sufficient practical experience to enable them demonstrate that they have gained technical competence, professional skills and professional values, ethics and attitudes necessary for performing the role of a professional accountant. The practical experience should be recorded in a consistent form, supported by verifiable evidence and subjected to a periodic review by a workplace training supervisor.

The practical experience acquired will be evaluated as to relevance and sufficiency at the point of application into membership of the Institute of Certified Public Accountants of Kenya (ICPAK). All CPA graduates are expected to join ICPAK either as associate members (if they have not met the required practical experience requirements), or as full members where they have met the mandatory experience requirement.

kasneb and ICPAK, working jointly in an effort to ensure full compliance with IES 5, have developed the Trainee Accountants Practical Experience Framework (TAPEF) to guide aspiring professional accountants in sourcing for relevant practical experience and ensuring that such experience is properly documented for evaluation. The TAPEF is expected to be rolled out with effect from July 2018 following the completion of the ongoing mid-term review of the syllabuses.

As part of preparations to ensure smooth roll out of the TAPEF, piloting of the framework was undertaken among one hundred (100) CPA students and graduates with their respective work place supervisors. The overall experience from the pilot phase was good. The challenges noted during the pilot phase have also been addressed to ensure a smooth roll out.

UPDATESINTRODUCING THE TRAINEE ACCOUNTANTS PRACTICAL EXPERIENCE FRAMEWORK (TAPEF)A joint kasneb-ICPAK initiative

By CPA/FA Isaac M. Njuguna – Examinations Director, kasneb and Board member, International Accounting Education Standards Board of IFAC


Details of the TAPEF and its implementation are provided below.

Practical experience requirements under TAPEF(a) Suitable employment experience

The practical experience gained has to be relevant in the accountancy or finance related roles. It is expected that significant, if not all, of the work days required to meet the TAPEF requirements would be spent on activities and tasks related to accounting, finance, audit and assurance or in other related technical areas such as taxation and management accounting. Internships and placements are generally relevant experience provided adequate records are maintained.

(b) Minimum experience (i) Start date – a trainee accountant is eligible

to commence the practical experience requirements as soon as he/she has registered for the CPA programme.

(ii) Minimum duration – to become a CPA (K), a trainee accountant must complete 450 practical work experience days which are normally expected to comprise 3 years of full time work. Each day constitutes 7 hours and of the 450 days of practical experience required, 150 days must be post examination qualification (that is, the last 150 days of this experience must have been obtained after completing the CPA examination). For persons working on a part time basis, the experience required remains at 450 days. It is therefore expected that a person working only half a day, would take up to 6 years to obtain the required experience. The 150 day post qualification requirement applies to both full time and part time employees. Relevant experience in an accounting or finance role as an intern would also qualify for purposes of meeting the 450 days of practical experience provided the other criteria have been met.

(iii) End date - the practical experience of 450 days must have been obtained within 6 years of completion of the CPA qualification.

(a)

(b)

(c) The work place training supervisor Experience only qualifies if there is a qualified work place training supervisor who is able to monitor, review and sign off the full 450 days of practical experience obtained. The training supervisor at the work place must at a minimum be a qualified accountant and a full member of an IFAC registered accountancy body (such as ICPAK, ICPAU and ICAEW). Such membership must be held throughout the experience period being signed off. ICPAK will from time to time issue separate guidelines relating to accreditation of such supervisors.

A trainee accountant need not have one single work place training supervisor that covers the full 450 days of experience. Indeed this may not be possible as the trainee accountant may be obtaining such experience from a number of different employments. As long as each employment period is covered by a separate qualified training supervisor, the requirement for the 450 days will be cumulatively met.

Because of the above requirement, self-employed experience does not meet the minimum requirements.

(d) The Competency FrameworkThe competency framework sets the minimum standard of work or experience a trainee accountant is expected to achieve and demonstrate in a work place. It basically describes the nature of work activity to be carried out and the values and attitudes trainee accountants are expected to demonstrate before they are ready to become members of the Institute.

A trainee accountant is required to meet 13 competencies in total, of which 10 competencies are compulsory and 3 out of 9 elective competencies.

(i) Compulsory competenciesThe compulsory competencies focus on professional values and ethics and professional skills as shown in Table 1. It is expected that the compulsory competencies will be demonstrated as having been met in each of the 6 months review cycles that are included within the overall 450 days of experience.

(c)

(d)

(i)

UPDATES


(i) Elective competenciesThe elective competencies focus on technical areas: financial accounting and reporting, management accounting, financial management, taxation and audit and assurance. A minimum of 3 out of 9 competencies shown in Table 2 need to be achieved. The selected elective competencies will be considered to have been met as and when the necessary work experience has been obtained.

(ii) (e) Competencies for trainees wishing to acquire practising certificates For trainees wishing to obtain practising certificates after obtaining membership of ICPAK, they must have achieved the following competencies:

• Competency objective 8 - Apply relevant auditing standards to the audit of financial statements.

• Competency objective 9 - Evaluate and report on the audit both in terms of external reporting and reporting to those charged with governance.

(e)

Competency category Competency objective Explanation/specific objectives

Professional ethics and values Professional judgement and

scepticism

Demonstrate the ability and understanding of professional judgement and scepticism. Demonstrate the application of good governance and its interaction with risk management, internal control and public interest

Ethical principles Application of professional ethics in day-to-day work

Governance, risk management and internal control

Demonstrate the application of good governance and its interaction with risk management, internal control and public interest

Professional skills Leadership Ability to lead a team

Communication Ability to effectively communicate internally and externally

ManagerialManage self and others to meet objectives effectively and efficiently

Information technology Use information technology in day to day tasks to achieve efficiency and effectiveness

Business strategy Understand business strategy and actively develop solutions to achieve strategic objectives

Financial accounting Accounting skills

Demonstrate an understanding of the effects and implications of accounting for a broad range of transactions

Financial reporting Understanding financial reporting

Demonstrate an understanding of financial statements prepared under IFRS/IFRS for SMEs/other frameworks for external reporting purposes

Table 1: Compulsory competencies

UPDATES


Recording practical experience training (a) Recording of practical experience by trainee

accountants Wherever one works, it is important to look for the opportunities that will help meet the practical experience requirements. Part-time/internship/exchange programmes experience is acceptable provided that it can be verified. This experience should cover the relevant areas of competence and should be properly supervised and signed off by the work place training supervisor.

Similarly if one changes jobs during the training period then he/she should make sure the competencies achieved at the previous work place have been signed off.

All relevant practical experience obtained must be recorded in the Practical Experience Training (PET) form. The PET form should have a detailed narrative of the work undertaken and the elements of the competency achieved. For those subsequently planning to apply for practicing certificates, the competencies required to be met for the same must be demonstrated in detail.

(a)

There is no time limit for achieving a competency, but a trainee accountant must be able to demonstrate that they can carry out all the work activities that contribute to that competency, to a consistent standard.

The Practical Experience Training (PET) form should be completed on an on-going basis and sign off obtained from the training supervisor at a minimum of six monthly intervals.

In completing the form, care should be exercised in ensuring that the narrative description of the experience undertaken demonstrates all of the following:

• A practical description of the actual work/activity undertaken using examples/illustrations.

• A clear link between the work undertaken and the competency objective being achieved.

• The time period covered by the activity, in days. • Any further information which would help the

reviewer understand the achievement of the objective.

Every six months from the date of joining employment, the trainee accountant and work place training supervisor must meet and discuss

Competency objective Explanation/specific objectives

1. Financial analysis Interpret financial statements and reports

2. Management accounting Prepare and evaluate financial information for management decision making

3. Financial planning Manage an organisation’s cash flows

4.Financial and transaction evaluation Evaluate financing and other business opportunities

5.Taxation – tax laws and regulations Demonstrate understanding of the tax laws and regulations

6. Taxation – compliance Compute taxes payable and prepare the necessary returns and submissions

7. Tax strategy Develop tax strategy for the organisation

8.Audit and assurance – financial audits Apply relevant auditing standards to the audit of financial statements

9.Audit and assurance – reporting

Evaluate and report on the audit both in terms of external reporting and reporting to those charged with governance

Table 2: Elective competencies

UPDATES


the documentation of the competencies met during that period. Upon agreeing on the same, the trainee accountant will then detail the same on the PET form and the work place training supervisor includes his/her comments and signs off the same.

It is recommended that performance objectives for the six month period be discussed and agreed upon at this meeting between the trainee and the work place training supervisor.

The experience recorded in the PET forms must be supported by physical records such as time sheets or any other relevant proof of experience gained. While such records are not required to be submitted to ICPAK on application of membership, ICPAK retains the right to request for such documents for independent verification of the PET form.

(b) Requirements of the work place training supervisors and employers A work place training supervisor is a person who will guide and support the development of the trainee accountant at the work place. They will be responsible for reviewing the progress of the trainee accountant and signing off the competencies achieved by the trainee accountant.

Responsibilities of the workplace training supervisor include:

(i) Holding an informal session with the trainee accountant upon recruitment to cover the following matters: • Ensuring the trainee accountant

understands the work they will be undertaking in the work place and helping the trainee accountant identify the competencies that the work being undertaken will achieve.

• Assist the trainee accountant plan out the experience required to meet the competency requirement for example job rotations, undertaking various assignments within a department.

• Setting up the process under which the supervision will take place. This will involve ensuring the trainee understands the work place’s process of the training and supervision and will cover details of information required for the formal sessions, records to be kept ready, evaluations and so on.

(ii) Holding formal sessions with the trainee accountant no further apart than 6 months and carry out the following: • A review of the PET forms and corroborating

the contents of the forms to evidence of work done for example timesheets, work summaries on job evaluation forms.

• Critically review whether the experience gained by the trainee accountant during the review period meets the competency of the framework.

• Test the trainee accountant on the practical experience gained using means such as questions and answers, laying out scenarios and obtaining the trainees views on the same.

• Discuss the experience gained and progress of the trainee. Also understand the challenges faced by the trainee in achieving/making progress on acquiring the competencies in the framework.

• Establish the competency objectives to be met for the next six months.

• Signing off against the competencies met if achieved to their satisfaction.

(iii) Holding subsequent formal meetings to review progress against the objectives set.

Roll out of the TAPEFAs mentioned earlier in the article, the TAPEF will be rolled out with the commencement of implementation of the revised examination syllabuses following the completion of the ongoing mid-term review process. The roll out date will be subsequently communicated to CPA students and other stakeholders.

Awareness creation on TAPEF among CPA students, potential work place supervisors and other relevant stakeholders is currently ongoing. Regular communication and updates will be made to all relevant stakeholders in this regard.

It is planned that under TAPEF, students will be able to submit their practical experience forms online for purposes of efficiency and convenience.

Meanwhile, plans to launch similar practical experience frameworks for the other professional qualifications offered by kasneb are in progress in liaison with the relevant professional institutes.

UPDATES

(b)


UPDATES

Services available on e-kasneb and how to use it

To create an account and use the e-kasneb, follow the steps below:

kasneb Account Creation

New Student/Existing Student Log on to http://online.kasneb.or.ke/

• Create an account as either new student or Existing Student

• Fill in all personal details and create a password• E-Wallet Details notification will be sent to your

Phone number /Email Address

How to Top Up Your kasneb Wallet

Once registered, you can top up your account in two ways:

Option one: Load your account through Mpesa/Airtel using kasneb Paybill number 832222, your phone number is the account number

Option two: Top up your e-wallet from the following JamboPay Agency Networks:

• JamboPay Agent• Co-op Bank• Family Bank• Stanbic Bank• Solo Payment Kiosk

kasneb has launched an electronic payment service, branded e-kasneb to facilitate students to:

(1) Register for kasneb examinations and access syllabuses online.

(2) Apply for exemptions.(3) Book for examinations and access examination

timetables.(4) Pay for registration renewal fees.(5) Access transaction records.(6) Access e-resources.(7) Access regular updates as appropriate.

Students will also be able to access other services such as application for remarking, deferment, withdrawal from examination and application for refunds in due course.


UPDATESkasneb Registration

New Student

• Choose: Create an account - new student• Sign up and fill in required details• Create a password• You will receive a verification email • Click on the Link to activate your account• Follow the steps on the screen to Log in

Existing Student

• Choose: Create an account• Enter Registration Number & Date of Birth Or ID Number• Sign up and fill in required details• Create a password• Click on the Link to activate your account• Follow the steps on the screen to Log in

Note:

For Existing Students

Once you have signed up to the e-kasneb student’s portal and activated your account, you are supposed to update your profile as identified in the figure below so as to view your details on the portal.

• Upload your passport size photo to your profile.• Upload you Identification document. For

example, your ID, Birth certificate or Passport.• Update your county of residence.• Save the changes.

• How to Pay via Mobile app and Web Portal

• Sign up using Email address and password created during registration

• Click on category of choice (e.g. Registration of Examination, Exemption, Examination, Renewal)

• Fill in all details required• During payment, go to the dropdown menu and

choose JamboPay wallet• Confirm amount and type in your Mobile phone

number and password

Note:

• If you are registering for an examination, you will be required to await verification of documents after which you will be advised of your registration number via email and sms .

• ALL exemption Letters will be provisional. The final exemption letter will be issued upon further verification of documents.

How to pay through the Banks

New Student?

• Sign up using Email address and pass ord created during registration

• Select category of choice (e.g. Registra ion of course, Exemption, Examination, Renewal)

• Fill in all details required• Download Invoice and walk to any of the Banks Listed

below, to make payments:• KCB • National Bank • Equity Bank

• Cooperative Bank • Post Bank • UBA Kenya Bank

kasneb NEWSLINE, Issue No. 2, April - June 2017 51kasneb NEWSLINE, Issue No. 2, April - June 201750

You are hereby reminded to read the examination rules and regulations on the back of your Authority to sit examination (Time table) before presenting yourself for examination. Additional instructions to candidates are included on the front cover of the examination booklet.

You are also reminded of the following:

(a) Need for proper identification

All candidates are required to sufficiently identify themselves before being allowed to sit for any examination paper. Approved identification documents are the kasneb student identity card AND national identity card or passport. Candidates without the kasneb student identity card but with the national identity card or passport will be allowed to sit the examination. Candidates are hereby required to note that Police abstracts are NOT identification documents and WILL NOT be allowed as proof of identification.

(b) Indicating the serial number of the answer booklet and confirming accuracy of the candidate’s email

Candidates are required to ENSURE they indicate

(a)

(b)

the serial number of their answer booklet on the space provided in the Signature Register. They should also CONFIRM that the email addresses indicated in the Signature Register besides their name is correct. Where the email address indicated is not correct, or where the candidate had not provided any email address to kasneb, they should indicate their correct email address.

(c) Candidates wishing to leave the examination room earlier than the stipulated end time for the examination session

Candidates wishing to leave the examination room before the stipulated end time for the examination session should alert the invigilators and leave the examinations booklet on their examination desk. No candidate is allowed to leave the examinations room within the first thirty minutes and the last fifteen minutes of the examination session.

(d) Request for change of examination centre

All requests for change of examination centre by candidates must be received by kasneb ONE MONTH before the examination date indicating the reason(s) for the requested change.

(c)

(d)

1. TO ALL kasneb CANDIDATES

Such requests must be submitted in writing either through a letter or email to the attention of the Deputy Director, Examination Administration. Requests re c e i v e d a f t e r t h e aforementioned period may not be considered.

(e) Deferment of examinations

Candidates are reminded that al l requests for deferment of examinations must be received by kasneb together with all necessary supporting documentations ONE MONTH before the examination date. Any such applications received after the deadline date, or applications received without any supporting evidence will not be considered. Applications for deferment of examinations on medical grounds will be considered at any time before the date of the examination provided all supporting documentation is attached.

(e)

UPDATES


2. kasneb SERVICES NOW AVAILABLE AT HUDUMA CENTRESWe are pleased to inform our stakeholders that kasneb services are now available at the following Huduma Centres:

NAME OF OFFICER IN CHARGE HUDUMA CENTREkasneb MOBILE NUMBER

Email addressSAFARICOM AIRTEL

Anne K. Wandeto Kibera, Nairobi 0701698149 0737018536 [email protected]

Anthony M. Kimani Nyeri 0701698213 0737256315 [email protected]

Caroline M. Makutwa GPO, Nairobi 0701699013 0737315992 [email protected]

Christine M. Ndwiga Meru 0701699017 0737422739 [email protected]

Collins M. Okomo Kisumu 0701699026 0737492586 [email protected]

Edith A. Were Mombasa 0701699078 0737516847 [email protected]

Egrah K. Masese Kisii 0701711465 0737543023 [email protected]

Maurice O. Gwaye Makadara, Nairobi 0701713039 0737618421 [email protected]

Modesta C. Langat Nakuru 0795431440 0735031908 [email protected]

Timothy K. Rotich Eldoret 0701713366 0737831524 [email protected]

3. kasneb CONTACTS

+254 020 4923000 www.kasneb.or.ke

072220121407742012140780201214073460062407920006380792002351

KasnebOfficial

[email protected] @KasnebOfficial

kasneb Towers, Hospital Road, Upper Hill P.O. Box 41362 - 00100 Nairobi - Kenya

Kasneb Desk at Huduma Centre, Nyeri

The services offered at the kasneb counters at the Huduma Centres include:

(a) Inquiries(b) Fee payment at the Huduma Centre using Posta Pay(c) Student registration(d) Examination entry(e) Exemptions(f) Registration renewal(g) Request for dispatch of certificates

UPDATES


4. kasneb STUDENT FEE COLLECTION ACCOUNTS WITH BANKS

Students, trainers, parents/guardians/sponsors, employers and other stakeholders are hereby informed that kasneb has opened student fee collection accounts with the following banks:

a) Kenya Commercial Bank Ltd. (KCB) Account Number: 1203681194

b) National Bank of Kenya Ltd. (NBK) Account Number: 01001031572601

c) Equity Bank Ltd. Account Number: 0170299238025

5. BANNING OF MOBILE PHONES FROM THE EXAMINATIONS ROOM

All students are hereby informed that mobile phones were banned from the examinations room with effect from the November/December 2014 sitting.

Students are further required to note that disciplinary action will be taken against any student found in possession of a phone in the examination room, regardless of whether the phone was in use or not at the time of its detection.

d) Kenya Post Office Savings Bank Ltd. (Postbank) Account Number: 0744130009246

e) Co-operative Bank of Kenya Ltd. Account Number: 01129128535900

The bank accounts are already operational.

Students are required to complete the appropriate kasneb forms and relevant fee deposit slips (except for Postbank which does not use deposit slips). The students will be issued with one copy of the deposit slip and a computer generated slip for their records. However, for Postbank only a computer generated receipt will be issued.

Upon payment of the requisite fees to the bank, a cash deposit receipt will be issued to the payee. The completed kasneb forms will be left with the bank for onward transmission to kasneb together with one copy of the deposit slip.

Note: Students should ensure that all documents requiring certification, such as copies of academic and professional certificates and identity card/passport are certified before being handed over to the bank.

UPDATES

BANNED


7. ACICT STEERING COMMITTEE

kasneb has embarked on an initiative to promote the recognition of the CICT and DICT qualifications in both the public and private sectors and their regulation. For this purpose, the ACICT steering committee was elected by CICT finalists and graduates to work closely with kasneb in this initiative.

Julio MuriukiMember

Patrick NgaruiyaChairman

Samuel KamunyaOrganising Secretary

Ruth KabubaMember

Nancy KangangiSecretary

Rose MwauraVice-Chair

Callo MochecheTreasurer

Association of Certified Information Communication Technologists

kasneb working jointly with the steering committee are in the process of exploring modalities for registration of the ACICT which is expected to ultimately grow into an institute.

Listed below are the elected officials of the ACICT steering committee.

UPDATES

Mr. Pius M. Nduatih, Secretary and Chief Executive, kasneb (left) and Prof. Noah O. Midamba, Vice-Chancellor, KCA University after signing the Memorandum of Understanding (MOU) on strategic collaboration.

6. MEMORANDUM OF UNDERSTANDING

kasneb NEWSLINE, Issue No. 2, April - June 201754

EXAMINATIONS NOTICE - NOVEMBER 2017 EXAMINATIONS

Students of kasneb, parents, sponsors, guardians, training institutions and other stakeholders are hereby notified of the following important dates and information.

1. Examination dates for the November 2017 examinations are as follows:

(a) Accounting Technicians Diploma (ATD), Diploma in Information Communication Technology (DICT) and Diploma in Credit Management (DCM) Levels I, II and III

Monday, 27 November 2017 and Tuesday, 28 November 2017

(b) CPA, CS, CICT ,CIFA and CCP Parts I, II and III Monday, 27 November 2017, Tuesday 28 November 2017, Wednesday, 29 November 2017, Thursday, 30 November 2017 and Friday, 1 December 2017 (c) Foreign Accountancy Qualifications (FAQ) - Wednesday, 29 November 2017 and Thursday, 30 November 2017

(d) Foreign Secretaries Qualifications (FSQ) - Wednesday, 29 November 2017

(e) Kenya Institute of Supplies Management - (i) Associate in Procurement and Supply of Kenya (APS-K) examination - Levels I and II Monday, 27 November 2017, Tuesday 28 November 2017 and Wednesday, 29 November 2017(ii) Certified Procurement and Supply Professional of Kenya (CPSP-K) examination - Parts I, II and III Monday, 27 November 2017, Tuesday 28 November 2017, Wednesday, 29 November 2017, Thursday, 30 November 2017 and Friday, 1 December 2017

2. Closing dates The closing dates for late registration, normal examination entry and late examination entry for the November 2017 examinations are as shown below:

(a) Late registration - Tuesday, 15 August 2017(b) Normal examination entry - Tuesday, 15 August 2017(c) Late examination entry - Saturday, 30 September 2017

3. Examination brochures and forms are obtainable on request, free of charge: (a) In Kenya:

(i) Either in person at the offices of kasneb, or through the post.(ii) Any Kenya National Library Service (KNLS) branches countrywide.(iii) Training institutions offering kasneb courses.(iv) kasneb Huduma Centres in GPO, Kibra and Makadara in Nairobi, Mombasa, Eldoret, Kisumu, Meru, Nyeri, Kisii and Nakuru

(b) Outside Kenya at the following offices:(i) In Rwanda at kasneb Kigali office, CHIC Complex - F055, Nyarurembo Village, Kiyovu Cell, Nyarugege Sector, Nyarugenge District, Kigali City(ii) In Cameroon at Maaron Business School, 10 Rue Joffre, Akwa - Douala and Fomic Business School, Buea, Cameroon. (iii) In South Sudan, at the South Sudan Institute of Professional Studies.

(c) Forms can also be downloaded from the website; www.kasneb.or.ke

4. Method of payment of fees Attention of students is drawn to the “Guide to the May 2017 examinations” regarding secure methods of paying fees to Kasneb.

(a) In Kenya, students are advised to pay through the kasneb fee collection accounts in any branch of the following banks:(i) Kenya Commercial Bank of Kenya Ltd. (KCB) - Account No. 1203681194. (ii) National Bank of Kenya Ltd. (NBK) - Account No. 01001031572601.(iii) Equity Bank Ltd. - Account No. 0170299238025.(iv) Kenya Post Office Savings Bank Ltd. (Postbank) - Account No. 0744130009246.(v) Co-operative Bank of Kenya Ltd. - Account No. 01129128535900.(vi) UBA Kenya Bank Ltd. - Account No. 55030160004156.

Students may also make payment by cheques/bankers cheques/drafts drawn in the name of kasneb or through the post. (b) Outside Kenya. Students are advised to pay the applicable fees in dollars at any branch of KCB in their countries to kasneb KCB collection account number

1123096465, domiciled at Capital Hill Branch, Nairobi. Thereafter, students should submit their documents to kasneb together with a copy of the bank deposit slip. Students are individually and personally responsible for ensuring that fees are paid to kasneb. Consequently, students who pay fees through third parties should ensure that such parties are honest and reliable and will therefore remit the fees to kasneb without delay. Bankers Cheques/Drafts should be drawn payable to kasneb and Inter-State Money Orders should be payable at City Square Post Office - Nairobi. Examination entry/annual registration renewal forms and remittances which are sent by post should be posted at least one week before the closing date to ensure that they are received in time.

5. All students who sat for the May 2017 examinations should ENTER for the November 2017 examinations immediately upon confirmation of their May 2017 examination results.

6. All continuing students of kasneb are required to update their annual registration renewal position by 1 July of each year. New students are required to note that the registration renewal fee is due on 1 July following the examinations sitting to which they are first eligible to enter.


Workshop of the Enterprise Resource Planning Steering Committee and Technical Committee held at Silver Springs Hotel, Nairobi on Friday, 21 April 2017

Members of the Board of kasneb and senior management during a workshop held from Wednesday, 21 June 2017 to Saturday, 24 June 2017 at the Great Rift Valley Lodge in Naivasha


Sensitisation workshops for kasneb staff on the development of the Corporate Strategic Plan (2017-2022) held at Silver Springs Hotel, Nairobi in April 2017


MARKETING ACTIVITIES

The 33rd ICPAK Annual Seminar held at Sarova Whitesands Beach Resort and Spa, Mombasa from Tuesday, 23 May 2017 to Friday, 26 May 2017

North Eastern Regional Mathematics Contest held at Wajir Girls Secondary School, Wajir on Saturday, 3 June 2017

Carrer talk held at Wajir Girls Secondary School, Wajir on Saturday, 3 June 2017


Education day organised by Nkabune Girls Secondary School, Meru County on Saturday, 10 June 2017

Meru Trade Fair held from Wednesday, 7 June 2017 to Saturday, 10 June 2017

Timazi National Readership Challenge held at Presbyterian University of East Africa, Kikuyu on Sunday, 11 June 2017


REWARDING EXCELLENCE

Prize Award Ceremony for the May 2019 Examination sitting held on Friday, 7 April 2017 at the Hilton Hotel, Nairobi


Habasweni

Laikipia

Mbalambala

Mikumbune Baringo

Msalani

Nakuru

Narok

Donation of reading materials to various Kenya National Library Services (KNLS) libraries in June 2017

CORPORATE SOCIAL RESPONSIBILITY


DIPLOMA EXAMINATIONS

ACCOUNTING TECHNICIANS DIPLOMA (ATD) EXAMINATION

ATD - LEVEL I INTRODUCTION TO FINANCIAL

ACCOUNTINGATD/11607

CHRISTABEL KARIMI NJERUDonor: Kasneb

COMMERCIAL LAW

(COMMON PAPER)ATD/8533

RAEL KEMUNTO OSORODonor: Kasneb

RUNNER UPENTREPRENEURSHIP AND

COMMUNICATION


TABITHA NYAMBURA MUHIADonor: Kasneb

INFORMATION COMMUNICATION TECHNOLOGY


MARY ATIENO OWINODonor: Kasneb

RUNNER UPINFORMATION COMMUNICATION

TECHNOLOGY


JEREMIAH WAMBUA NGUTADonor: Kasneb

ATD - LEVEL IIFINANCIAL ACCOUNTING

ATD/9928GEOFFREY CHUNE OMARIBA

Donor: Kasneb

PRINCIPLES OF MANAGEMENT


ROBERT OMBATI MANGARODonor: Kasneb

RUNNER UPPRINCIPLES OF MANAGEMENT


JEREMIAH BOSIRE MOINDIDonor: Kasneb

BUSINESS MATHEMATICS AND STATISTICS


ALEXANDER MULU KALIYE Donor: Kasneb

RUNNER UP (1)BUSINESS MATHEMATICS AND

STATISTICS


LUCAS NDICHU NDING’URI Donor: Kasneb

RUNNER UP (2)BUSINESS MATHEMATICS AND

STATISTICS


SAMSON MUSIU NTHELEKU Donor: Kasneb

Fundamentals of FinanceATD/3756

TOMLIN MAGWARODonor: Kasneb

RUNNER UPFUNDAMENTALS OF FINANCE

ATD/2642ABEL SAGANA KIBITOK

Donor: Kasneb

ATD - LEVEL IIIPRINCIPLES OF ECONOMICS

ATD/6491VICTOR NYANUMBA MACHUKI

Donor: Kasneb

FUNDAMENTALS OF MANAGEMENT ACCOUNTING

ATD/7063NAOMI WACEKE KAMAU

Donor: Kasneb

PRIZE WINNERS

NOVEMBER 2016 EXAMINATIONS


PRINCIPLES OF PUBLIC FINANCE AND TAXATION


DERICK OSIROMU EMASADonor: Kasneb

AUDITINGATD/6904

AMOS KIRIMI KAGEMBEDonor: Kasneb

BEST OVERALL IN A LEVELATD LEVEL IATD/10603

TABITHA KITHIA MANG’AUDonor: Kasneb

ATD LEVEL IIATD/9928

GEOFFREY CHUNE OMARIBADonor: Kasneb

ATD LEVEL IIIATD/6491

VICTOR NYANUMBA MACHUKIDonor: Kasneb

DIPLOMA IN INFORMATION COMMUNICATION TECHNOLOGY

(DICT) EXAMINATION

DICT - LEVEL I INTRODUCTION TO COMPUTING

DIC/546ANTONY OORO OMONDI

Donor: Kasneb

COMPUTER MATHEMATICSDIC/512

TRUPHENA MAKOKHA AKANGADonor: Kasneb

ENTREPRENEURSHIP AND COMMUNICATION

(COMMON PAPER)DIC/567

MAXWELL ODIGADonor: Kasneb

COMPUTER APPLICATIONS PRACTICAL I

DIC/398JOHN KINYWA MWANGANGI

Donor: Kasneb

DICT - LEVEL IICOMPUTER NETWORKING

DIC/206NICHOLAS KIPRONO TOO

Donor: Kasneb

INTERNET SKILLSDIC/500

OKIOMA MATOKE DENNISDonor: Kasneb

COMPUTER SUPPORT AND MAINTENANCE

DIC/206NICHOLAS KIPRONO TOO

Donor: Kasneb

PROGRAMMING CONCEPTSDIC/206

NICHOLAS KIPRONO TOODonor: Kasneb

DICT - LEVEL IIIPRINCIPLES OF WEB DEVELOPMENT

DIC/14ELIKEY KIPTOO

Donor: Kasneb

FOUNDATIONS OF ACCOUNTING

(COMMON PAPER)DIC/26

IRENE NYAGUTHII MUGEMADonor: Kasneb

INFORMATION SYSTEMS PROJECT SKILLS

DIC/79MULEE SAMUEL KITUKU

Donor: Kasneb

COMPUTER APPLICATIONS PRACTICAL II

DIC/79MULEE SAMUEL KITUKU

Donor: Kasneb

BEST OVERALL IN A LEVELDICT LEVEL I

DIC/567MAXWELL ODIGA

Donor: Kasneb

DICT LEVEL II DIC/206

NICHOLAS KIPRONO TOODonor: Kasneb

DICT LEVEL IIIDIC/79

MULEE SAMUEL KITUKUDonor: Kasneb

DIPLOMA IN CREDIT MANAGEMENT (DCM)

EXAMINATION

DCM - LEVEL IFUNDAMENTALS OF CREDIT

MANAGEMENTDCM/112

CYNTHIA NAFULA SIMIYUDonor: Kasneb

DCM - LEVEL IICREDIT MANAGEMENT

DCM/43LOISE WANJIKU MARAGU

Donor: Kasneb

PRIZE WINNERS


PRIZE WINNERS

LAW GOVERNING CREDIT PRACTICEDCM/24

ISABEL ACHIENG OLUOKODonor: Kasneb

DCM - LEVEL IIIMARKETING AND CUSTOMER

RELATIONSDCM/73

WINFRED ACHIENG ONYANGODonor: Kasneb

PRACTICE OF CREDIT MANAGEMENTDCM/73


BEST OVERALL IN A LEVELDCM LEVEL I

DCM/107EMMAH WANJIKU GITONGA

Donor: Kasneb

RUNNER UPDCM LEVEL I

DCM/116FRANK MATHEW GICHIGO

Donor: Kasneb

DCM LEVEL IIDCM/24

ISABEL ACHIENG OLUOKODonor: Kasneb

DCM LEVEL IIIDCM/73


PROFESSIONAL EXAMINATIONS

CERTIFIED PUBLIC ACCOUNTANTS (CPA)

EXAMINATION

CPA PART I – SECTION 1FINANCIAL ACCOUNTING

(COMMON PAPER)NAC/284044

OMAO ELIZABETH BARONGODonor: ERNST & YOUNG

COMMERCIAL LAW


BENSON LIKHANGA OMUHINDIDonor: KINYORI & ASSOCIATES

ENTREPRENEURSHIP AND COMMUNICATION


JOSEPH MURIITHI MATHUGUDonor: KING’ANG’I KAMAU &

COMPANY CERTIFIED PUBLIC ACCOUNTANTS

CPA PART I – SECTION 2ECONOMICS


JOEL KIMUTAI KIMASARDonor: WACHIRA IRUNGU &

ASSOCIATES

MANAGEMENT ACCOUNTINGNAC/212082

WILLIAM WANGAI MBUGUADonor: MUGO & COMPANY CERTIFIED

PUBLIC ACCOUNTANTS

PUBLIC FINANCE AND TAXATION


KENNEDY KIMATHIDonor: PKF KENYA

BEST OVERALL IN SECTION (S)SECTION 1 ONLY

NAC/282760JOSEPH MURIITHI MATHUGUDonor: RSM EASTERN AFRICA

SECTION 2 ONLYNAC/261105

TABITHA NJERI KARIUKIDonor: RSM EASTERN AFRICA

SECTIONS 1 AND 2 (COMBINED)NAC/278644

WINNIE MUTHONI KAHINGADonor: RSM EASTERN AFRICA

CPA PART II – SECTION 3COMPANY LAW


EDWIN KAMAU NJUGUNADonor: KPMG

FINANCIAL MANAGEMENT


OSORO ANDREW MOGAKADonor: KIGO NJENGA & COMPANY

CERTIFIED PUBLIC ACCOUNTANTS (KENYA)

FINANCIAL REPORTINGNAC/213678

ABDULLAHI YUNIS GULIYEDonor: PRICEWATERHOUSE COOPERS

CERTIFIED PUBLIC ACCOUNTANTS

“A small debt produces a debtor; a large one, an enemy.”

Publilius Syrus


PRIZE WINNERS

CPA PART II – SECTION 4AUDITING AND ASSURANCE

NAC/239433ESTHER ORODO

Donor: CARR STANYER GITAU & COMPANY

MANAGEMENT INFORMATION SYSTEMS


EUNICE NYABATE ACHENCHIDonor: DELOITTE & TOUCHE

QUANTITATIVE ANALYSIS


STEPHEN MURIITHI MWANGIDonor: MHASIBU SACCO LIMITED


NAC/260712CHELSEA WAMBUI WAMBUA

Donor: MAZARS CERTIFIED PUBLIC ACCOUNTANTS (KENYA)


SHARON AKONG’O YALADonor: H. W. GICHOHI & COMPANY


TABITHA NDUTA NJOGUDonor: MBAYA & ASSOCIATES

CPA PART III – SECTION 5ADVANCED MANAGEMENT

ACCOUNTINGNAC/199253

MARY NGINA MULIDonor: KPMG KENYA

ADVANCED FINANCIAL MANAGEMENTNAC/211341

LUKE BRUNO OTIENO OLONJEDonor: DELOITTE & TOUCHE

CPA PART III – SECTION 6ADVANCED PUBLIC FINANCE AND

TAXATIONNAC/258547

EZEKIEL MANYARA MUCHERUDonor: PKF KENYA

ADVANCED AUDITING AND ASSURANCENAC/234689

RODGERS KALOKI MUTUADonor: MR. DANIEL M. NDONYE

RUNNER UP ADVANCED AUDITING AND

ASSURANCENAC/172545

SUZANNE OBOLA ODOLIDonor: Kasneb

ADVANCED FINANCIAL REPORTINGNAC/152305

ERIC MUTHINI MUTUKUDonor: MURDOCH McCRAE & SMITH


NAC/265360JOSEPH MWANGI THUO

Donor: INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS OF KENYA (ICPAK)


EZEKIEL MANYARA MUCHERUDonor: FIDELITY INSURANCE COMPANY

LIMITED


ELIZABETH WARUGURU MAINADonor: INSTITUTE OF CERTIFIED PUBLIC

ACCOUNTANTS OF KENYA (ICPAK)

BEST LADY GRADUATENAC/265133

ELIZABETH WARUGURU MAINADonor: ASSOCIATION OF WOMEN

ACCOUNTANTS OF KENYA (AWAK)

CERTIFIED SECRETARIES (CS) EXAMINATION

CS PART I – SECTION 1ORGANISATIONAL BEHAVIOUR

NSC/283291FRED LABHAR LETROKDonor: PARKER RANDALL

BUSINESS COMMUNICATION NSC/280734

ANNE NANYAMA SABUNIDonor: VISION INSTITUTE OF

PROFESSIONALS

CS PART I – SECTION 2 PRINCIPLES OF ACCOUNTING

(COMMON PAPER)NSC/281987

MAUREEN AKINYI OKUTODonor: KINYORI & ASSOCIATES


NSC/279418ANNBELL WANJIKU MWANIKI

Donor: INSTITUTE OF CERTIFIED PUBLIC SECRETARIES OF KENYA (ICPSK)

SECTION 2 ONLYNSC/270491

EUNICE WANGECI KAMAUDonor: Kasneb

SECTIONS 1 AND 2 (COMBINED)NSC/281987

MAUREEN AKINYI OKUTODonor: Kasneb

Behind every great business, there is a great accountant


PRIZE WINNERS

CS PART II – SECTION 3COMPANY LAW

(CS ONLY)NSC/248945

NELSON GICHUKI MWAIDonor: AFRICA REGISTRARS CERTIFIED

PUBLIC SECRETARIES

PRINCIPLES AND PRACTICE OF MANAGEMENT

NSC/266553DANIEL OWINO K’ONYANGO

Donor: Kasneb

CS PART II – SECTION 4CORPORATE SECRETARIAL PRACTICE

NSC/274199

CAROLINE WAGUTHI NDINDIDonor: NGURU MUREGI & ASSOCIATES

LAW AND PROCEDURE OF MEETINGSNSC/219699

KELVIN KANG’ETHE KARANJADonor: QUANTUM REGISTRARS


NSC/272263JOHN WANJOHI WAHOME

Donor: CAPITAL REGISTRARS


ROBERT K. WANYAMA EGESSADonor: Kasneb


JANET NAISIMOI KATITIADonor: Kasneb

CS PART III – SECTION 5HUMAN RESOURCE MANAGEMENT

NSC/253264BENSON NJUGUNA KANGETHEDonor: SAVANNA & ASSOCIATES

RUNNER UPHUMAN RESOURCE MANAGEMENT

NSC/265272MARY WACEKE MUIA

Donor: Kasneb

FINANCIAL MARKETS LAWNSC/254875

JOHN CHEGE MWANGIDonor: Kasneb

GOVERNANCE AND ETHICSNSC/266401

JOSHUA SAIDIMU MOILODonor: KKCO EAST AFRICA

CS PART III – SECTION 6STRATEGIC MANAGEMENT

NSC/243852SAMUEL NELSON GACHANGO

KASNEB PUBLIC POLICY AND ADMINISTRATION

NSC/224548CHARLES KAI MWANGUDZA

Donor: Kasneb

GOVERNANCE AND SECRETARIAL AUDIT

NSC/224548CHARLES KAI MWANGUDZA

Donor: H.W. GICHOHI & COMPANY

RUNNER UPGOVERNANCE AND

SECRETARIAL AUDITNSC/243852

SAMUEL NELSON GACHANGODonor: Kasneb


NSC/253264BENSON NJUGUNA KANGETHE

Donor: INSTITUTE OF CERTIFIED PUBLIC SECRETARIES OF KENYA (ICPSK)


CHARLES KAI MWANGUDZADonor: AXIS KENYA


BENSON NJUGUNA KANGETHEDonor: Kasneb

BEST LADY GRADUATENSC/265272

MARY WACEKE MUIADonor: WOMEN ON BOARDS NETWORK

KENYA

CERTIFIED INFORMATION COMMUNICATION

TECHNOLOGISTS (CICT) EXAMINATION

CICT PART I - SECTION 1INTRODUCTION TO COMPUTING

CTP/2853ANTONY MOMANYI NYARANGI

Donor: Kasneb

COMPUTER APPLICATIONS - PRACTICAL

CTP/2765PETER MBUGUA WANJIRU

Donor: Kasneb

CICT PART I - SECTION 2OPERATING SYSTEMS - PRACTICAL

CTP/2800SUSAN MORARA ONYANGO

Donor: Kasneb

COMPUTER SUPPORT AND MAINTENANCE

CTP/2678JEREMIAH OTIENO ODHIAMBO

Donor: Kasneb

A Certified Secretary’s key rolesGood governanceCorporate secretarial servicesCorporate managementCorporate advisory servicesLegal and complianceCorporate communication strategyStakeholder management



CTP/2853ANTONY MOMANYI NYARANGI

Donor: Kasneb

SECTION 2 ONLYCTP/2793

CYRUS WAINAINA NJUGUNADonor: Kasneb

CICT PART II - SECTION 3DATABASE SYSTEMS

CTP/2642BASIL OTIENO NDONGA

Donor: Kasneb

SYSTEM ANALYSIS AND DESIGNCTP/2149

JERIM PAUL OKELLODonor: Kasneb

STRUCTURED PROGRAMMINGCTP/2466

STEVEN GACHAHI KIRATUDonor: Kasneb

CICT PART II - SECTION 4OBJECT ORIENTED PROGRAMMING

CTP/1668RAPHAEL KING’ORI MUTHUI

Donor: Kasneb

WEB DESIGN AND E-COMMERCE

CTP/1722JOSEPH KIPKOECH KOGEI

Donor: Kasneb

DATA COMMUNICATION AND COMPUTER NETWORKS - PRACTICAL

CTP/1152RICHARD NDERITU MATHENGE

Donor: Kasneb


CTP/2149JERIM PAUL OKELLO

Donor: Kasneb


SHADRACK MWANGI KARIUKIDonor: Kasneb

SECTIONS 3 AND 4 (COMBINED)CTP/1722

JOSEPH KIPKOECH KOGEIDonor: Kasneb

CICT PART III - SECTION 5SOFTWARE ENGINEERING

CTP/782DENNIS KIPKOECH NG’ETICH

Donor: Kasneb

MOBILE APPLICATION DEVELOPMENTCTP/1068

ROY KIPKEMOIDonor: Kasneb

RUNNER UP (1)MOBILE APPLICATION DEVELOPMENT

CTP/782DENNIS KIPKOECH NG’ETICH

Donor: Kasneb

RUNNER UP (2)MOBILE APPLICATION DEVELOPMENT

CTP/1259NANCY NJERI KIARIE

Donor: Kasneb

CICT PART III – SECTION 6SYSTEMS SECURITY

CTP/1401MISHAEL ATUTI MACHORA

Donor: Kasneb

INFORMATION SYSTEMS PROJECT MANAGEMENT

CTP/1401MISHAEL ATUTI MACHORA

Donor: Kasneb

RESEARCH METHODSCTP/2152

ELIZABETH NABWALA MUKHOLODonor: Kasneb

ICT PROJECTCTP/1104

JANEROSE WANGECHI KIGUMIDonor: Kasneb

BEST LADY ICT PROJECTCTP/1104

JANEROSE WANGECHI KIGUMIDonor: Kasneb


CTP/1068ROY KIPKEMOIDonor: Kasneb


MISHAEL ATUTI MACHORADonor: Kasneb

CERTIFIED INVESTMENT AND FINANCIAL ANALYSTS (CIFA)

EXAMINATION

CIFA PART I – SECTION 1FINANCIAL MATHEMATICS

ISP/5549ANDREW SAFARI KATANA

Donor: Kasneb

CIFA PART I – SECTION 2FINANCIAL INSTITUTIONS AND

MARKETSISP/5115

SAMUEL KARIUKI NJANG’IRUDonor: Kasneb

PRIZE WINNERS



ISP/3386COLLINS KIPKEMBOI

Donor: Kasneb

SECTION 2 ONLYISP/5531

KENNEDY OCHIENG OMWALODonor: Kasneb

SECTIONS 1 AND 2 (COMBINED)ISP/3386

COLLINS KIPKEMBOI Donor: INSTITUTE OF CERTIFIED INVESTMENT AND FINANCIAL

ANALYSTS (ICIFA)

CIFA PART II – SECTION 3REGULATION OF FINANCIAL MARKETS

ISP/5188ALEX KUTAI KHASAKHALA

Donor: Kasneb

CORPORATE FINANCEISP/4543

ANTHONY GITHAIGA NJOREDonor: Kasneb

FINANCIAL STATEMENTS ANALYSISISP/4234

SAMUEL NZOKA NGUMBAUDonor: Kasneb

CIFA PART II – SECTION 4EQUITY INVESTMENTS ANALYSIS

ISP/4636MOSES MWENDA ANANGA

Donor: Kasneb

PORTFOLIO MANAGEMENTISP/4492

DUNCAN MUNENE KARURUDonor: Kasneb

BEST OVERALL IN SECTION(S)SECTION 3 ONLY

ISP/4234SAMUEL NZOKA NGUMBAU

Donor: STAR COLLEGE


BRAMWEL OMOGO LUGADODonor: STAR COLLEGE


SAMUEL NZOKA NGUMBAUDonor: INSTITUTE OF CERTIFIED

INVESTMENT AND FINANCIAL ANALYSTS (ICIFA)

CIFA PART III – SECTION 5STRATEGY, GOVERNANCE AND ETHICS

(COMMON PAPER)ISP/4409

SAMUEL MBUTHIA MUNDIADonor: KPMG KENYA

FIXED INCOME INVESTMENTS ANALYSISISP/4409

SAMUEL MBUTHIA MUNDIADonor: Kasneb

ALTERNATIVE INVESTMENTS ANALYSISISP/3090

BENSON KAMAU NJANEDonor: DR. JONAH K. AIYABEI

CIFA PART III – SECTION 6ADVANCED PORTFOLIO MANAGEMENT

ISP/4402BRIAN OMBEGA NYANDIEKADonor: DR. GEORGE O. WAKAH

INTERNATIONAL FINANCEISP/4100

DANIEL KAMONGO NJOGUDonor: Kasneb

RUNNER UP (1)INTERNATIONAL FINANCE

ISP/3085ESTHER WACEKE MWANGI

Donor: Kasneb

RUNNER UP (2)INTERNATIONAL FINANCE

ISP/3860PATRICK WANJOHI NGATIA

Donor: Kasneb

DERIVATIVES ANALYSISISP/3660

PATRICE LUMUMBADonor: Kasneb


ISP/4409SAMUEL MBUTHIA MUNDIA

Donor: INSTITUTE OF CERTIFIED INVESTMENT AND FINANCIAL

ANALYSTS (ICIFA)


PATRICE LUMUMBADonor: INSTITUTE OF CERTIFIED

INVESTMENT AND FINANCIAL ANALYSTS (ICIFA)


LILIAN WANGECHI KAHUTHUDonor: DR. GEORGE O. WAKAH

BEST LADY GRADUATEISP/4756

LILIAN WANGECHI KAHUTHUDonor: STAR COLLEGE

Wealthy people invest first and spend what’s left; broke people spend first

and invest what’s left.

Warren Buffet

PRIZE WINNERS


PRIZE WINNERS

CERTIFIED CREDIT PROFESSIONALS (CCP)

EXAMINATION

CCP PART I – SECTION 1CREDIT MANAGEMENT

CCP/2376WILSON MWANGI MACHARIA

Donor: INSTITUTE OF CREDIT MANAGEMENT (ICM)


CCP/2391SARAH MARY NYAMBURA KIBIRA

Donor: Kasneb

SECTION 2 ONLYCCP/2391

SARAH MARY NYAMBURA KIBIRADonor: Kasneb

SECTIONS 1 AND 2 (COMBINED)CCP/2391

SARAH MARY NYAMBURA KIBIRADonor: Kasneb

CCP PART II – SECTION 3MARKETING AND PUBLIC RELATIONS

CCP/2372DRAKE SINGA AKOYA

Donor: Kasneb

CCP PART II – SECTION 4LAW GOVERNING CREDIT PRACTICE

CCP/2363BENARD KIPNGENO SANG

Donor: Kasneb


CCP/2372DRAKE SINGA AKOYA

Donor: Kasneb


EVERLYNE NYAGUTHIE MAINADonor: Kasneb

SECTIONS 3 AND 4 (COMBINED)CCP/1359

RUTH ADHIAMBO OYIERDonor: Kasneb

CCP PART III – SECTION 5BANKING LAW AND PRACTICE

CCP/2202PATRICK MURIUKI KIRANGA

Donor: Kasneb

RUNNER UPBANKING LAW AND PRACTICE

CCP/2014DENNIS KIPKORIR SANG

Donor: Kasneb

CREDIT MANAGEMENT IN THE FINANCIAL SECTOR

CCP/2202PATRICK MURIUKI KIRANGADonor: INSTITUTE OF CREDIT

MANAGEMENT (ICM)

CCP PART III – SECTION 6DEBT RECOVERY

CCP/1862EMILY CHEPNG’ETICH RUTTO

Donor: Kasneb

CORPORATE LENDINGCCP/1999

JOY MWIKALI MAVINDUDonor: Kasneb

CREDIT PRACTICECCP/1893

CHRISTINE GATAKAA NJERIDonor: Kasneb


CCP/2202PATRICK MURIUKI KIRANGA

Donor: Kasneb


JOY MWIKALI MAVINDUDonor: Kasneb

Your link to careers in Accounting, Investment and Finance, Governance, Management, Information Communication Technology and Credit Management.

Here’s the essence of risk management; risk no more than you can afford to lose and also risk enough so that a win is meaningful. If there is no such amount, don’t play - Ed SeykotaQUOTE:


XXXXXXXXXXXXXX

BENEFITS

OF BEING AN ICIFA

MEMBER

Enhance Knowledge development

through Seminars, Conferences,

Professional forums and Workshops.

• Professional development

through training/workshops.

• Networking: Fostering

collaborations between members

through Annual General

• Meeting, conferences, ICIFA

awards, seminars, breakfast

meetings both at local and on a

global scale.

• Opportunity to become an

International Investment and

Financial Analyst through ACIIA.

• Professional Publications

produced on a quarterly

basis-Free copy to ICIFA

members. Free electronic

Newsletter.

• Financial publications for sale

offered on discounted prices to

all ICIFA members.

• Support ICIFA members through

legal advice, professional

standards in financial markets

and technical advice in areas of

operation.

• Global recognition through our

partnership with ACIIA.

• Invitations to exclusive senior

members events including

dinners, roundtables in

• Investment forums

• All members to enjoy discounts

in booking of accommodation in

luxurious hotels during

• Seminars and Conferences.

XXXXXXXXXXXXXX

It pays to advertise in the

Contact the Marketing and Corpotate Affairs Unit through: P.O. Box 41362 - 00100 Nairobi Tel: 254 020 4923000 Cellphone: 0722-201214/0734-600624 E-mail: [email protected] or [email protected]

kasneb NEWSLINE

kasneb Newsline is one of the most widely read journals in Kenya. It is produced four times in a year. Over 50,000 copies are printed for each issue.

The Newsline is distributed free of charge within and outside Kenya through secondary schools, Kenya National Library Services branches, training institutions, universities, government ministries, Kenyan Embassies and High Commissions.

The Newsline is also available on the kasneb website.

Grow your business by advertising in the kasneb Newsline. Call us, book for space and watch your institution or business grow.

KASNEB The Professional Journal of KASNEB Issue No. 2, April - June 2016

KASNEB NEWSLINEEDUCATIVE INFORMATIVE ENTERTAINING

TOPICS FEATURED

EMERGING ISSUES IN HUMAN CAPITAL

PORTFOLIO ANALYSIS

ARBITRAGE THEORIESLEADERSHIP

QUALITIESCOMPANIES ACT

2015SELF-ESTEEM KASNEB

UPDATES EXEMPTION POLICY

KASNEB NEWSLINE, Issue No. 3, July - September 2016 i

KASNEB The Professional Journal of KASNEB Issue No. 3, July - September 2016


INSIDE INTERNAL CONTROLS

FRAUD EXPOSURE

FINANCIAL STRESS AND CORPORATE FAILURE

IFRS 2: SHARE-BASED PAYMENT

TECHNOLOGY AND MANAGEMENT COMPLEXITY UPDATES PICTORIAL

RECOMMENDED READING LIST

INTERNALCONTROLS

KASNEB NEWSLINE, Issue No. 4, October -December 2016KASNEB NEWSLINE, Issue No. 4, October -December 2016 i56

Strategic drift

The Professional Journal of KASNEB Issue No. 4, October - December 2016


INSIDE STRATEGIC DRIFT

OUTSOURCED BOOKKEEPING

AUDIT ENGAGEMENT

CUSTOMS AND EXCISE DUTY

OVERCOMING DISAPPOINTMENTS

MONITORING AND EVALUATION KASNEB UPDATES

kasneb NEWSLINE, Issue No. 1, January - March 2017 i

The Professional Journal of kasneb Issue No. 1, January - March 2017kasneb


INSIDE PORTFOLIO THEORY

FINANCE ACT 2016

THE RIGHT COLLECTION

AGENCY

STRATEGIC LEADERSHIP

BE YOUR OWN BOSS

kasneb LAUNCHES

NEW BRAND

kasneb UPDATES

PRIZE WINNERS

THEORYPORTFOLIO

NEWSLINE

SHARI'AH COMPLIANT - kasneb

Documents

Transcript of SHARI'AH COMPLIANT - kasneb