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KASNEB NEWSLINE, Issue No. 2, April - June 2015 1

KASNEB The Professional Journal of KASNEB Issue No. 2 April - June 2015

KASNEB NEWSLINEEDUCATIVE INFORMATIVE ENTERTAINING

TOPICS FEATURED

BUSINESS VALUATION FOR MERGERS AND

ACQUISITIONS

RISK MANAGEMENT FOR CLOUD

COMPUTING

THE EQUITY VALUATION

PROCESS

IMPLEMENTATION OF TQM IN BUSINESS

PUBLIC FINANCE

THE DIGITAL ECONOMY REVISED SYLLABUSES


KASNEB

Editor HonorarisPius M. Nduatih

Editorial TeamStaff 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

KASNEB Newsline is the professional students journal of KASNEB.

The views expressed in this journal are those of the respective authors and do not necessarily reflect

those of KASNEB.

The Editor welcomes contributions from readers especially students and trainers in accountancy, finance,

management, administration, ICT and cognate subjects.

The Editor reserves the right to edit articles for the 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

William OchiengKellen KiambatiFrederick Buchana Isaac T. Maina Emlyn James Ngwiri Daisy W. Njoroge

11 Risk management for cloud computing3 Business valuation for mergers and acquisitions

29 Implementation of TQM

48 The digital economy 51 Pictorial

45 My most valuable journey

57 Revised 2015 KASNEB syllabuses 68 Prize winners KASNEB is ISO 9001:2008 certified

CONTENTS KASNEB NewslineIssue No. 2, April - June 2015

23 The equity valuation process

Regina N. Wanjiru

35 Public finance


From the CEO’s desk

Editor HonorarisPius M. Nduatih

The catch-phrase “adapt or perish” is often used to drive home the need for businesses to align

their strategies with the dictates of the environment in which they operate. The swings in

environmental macro-variables churn out diverse operating environments, with immense

opportunities on one extreme and weighty challenges on the other.

In some circumstances, a business may not be able to navigate through long-term environmental

oscillations alone; a partner is needed. Such partnerships may come in various forms, including

through mergers and acquisitions. In some cases though, the business combination may be hostile

(non-consensual), with one firm being forcefully merged with another. Examples of mergers and

acquisitions abound in various economies, signaling the importance of such strategies for business

survival and growth.

Taking a cue from the above trends, we feature a lead article in this edition of the KASNEB Newsline

whose focal point is the valuation of firms for purposes of mergers and acquisitions. The various

types of mergers, defensive mechanisms for hostile mergers, valuation of assets for purposes of

mergers and other related topical issues on the subject are all presented in an easy-to-read approach.

A practical example presented at the end of the article serves to further illustrate the process in a

real-life scenario.

The second article explores the cloud computing phenomenon and the associated risks to

information. A fast growing on-demand network access to a shared pool of computing resources,

cloud computing is being touted as the “next big thing” in the information technology arena.

However, caution should be considered even as more and more organisations embrace this emerging

technology. In particular, the security of a firm’s data within the cloud is paramount, considering

that the information is residing in the same ecosystem as other cloud tenants and access controls

may not be fully reliable. In addressing this inherent risk, the writer has provided a number of tried

and tested risk mitigation approaches ranging from development of cloud policies and controls

to use of encryptions on data hosted on the cloud platform.

This edition also features other articles of relevance to our diverse readership base. These articles

address topical areas of interest including the implementation of the total quality management

(TQM) system in business, role of public financial management in government operations and an

insight into the digital economy.

In addition to the above articles, we have also included additional information to guide students

and trainers as they transit from the old syllabuses to the new syllabuses which took effect from

1 July 2015. We have also provided a list of the prize winners for the November/December 2014

examinations whom we expect to recognise during a prize award ceremony planned to be held

on Friday, 9 October 2015.

Welcome and enjoy your reading.


A merger refers to a combination of two firms which are almost equally strong. On

combining, the two firms lose their original identity to form a completely new

entity. In a takeover situation, the firm being acquired loses identity while the

acquiring firm maintains its identity. The acquiring firm is usually called the predator

while the firm being acquired is called a target.

A merger can take place in the

following forms:

a) Horizontal merger: This

involves a merger between

two firms in the same

industry and at the same

level of production forming

a single entity in order to

reduce competition against

each other, for example,

Pr ice Waterhouse and

BUSINESS VALUATION FOR MERGERS AND ACQUISITIONS

c) Conglomerate merger: This is where

the merging firms are in different

industries. Such a merger is intended

to diversify their areas of operations

and minimise their risks.

Benefits of mergers and acquisitions

(1) Diversification - this is achieved in the

case of a conglomerate merger since the

returns of the merging companies are

negatively correlated, therefore it will

result into reduction of the overall risk.

(2) Asset backing - the predator may

acquire the target in order to take over

the assets that are underutilised and

then utilise them to generate higher

revenue.

Will

iam

Och

ieng

Ow

ino,

Fina

nce D

irecto

r, Brig

ht St

ar In

stitu

te of

Busin

ess S

tudie

s, Na

kuru

Horizontal

MergerVertical

Merger

Acquisition

Market extension

MergerProduct extension

Merger

Conglomeration

Business A

Business B

Business AB

Coopers & Lybrand merger

to form Pricewaterhouse-

Coopers (PwC).

b) Vertical merger: This is a

merger between two firms at

different levels of production

such as a merger between a

manufacturer and a supplier.

An example would be a brewer

merging with a bottle-making

company.

Horizontal merger

Suppliers or customers

Competitors

Complementary products

Complementary markets

Everything else

Horizontal merger

Market extension

Conglomerate

Product extension

TYPES OF M&A ACTIVITY

UNRELATED

RELA

TED


(3) Tax savings - this arises where

the target has accumulated

losses which if taken over will

reduce the taxable income and

the tax liability of the predator.

(4) Management efficiency - this

is where the predator acquires

the target in order to take over

its efficient management team.

(5) Increased market share and

market power - this arises in

case of a horizontal merger

since it involves the acquisition

or merging of competitors.

(6) Synergy - these are additional

benefits associated with

economies of a larger scale

after merger and acquisition. It

is the creation of a whole which

is greater than the sum of its

individual parts. The following

are three examples of synergies:

a) Operational synergy - results in

economies of scale, scope and

complementary resources.

b) Management synergy - results

in efficiency gains from the

combination of management

teams.

c) Financial synergy - results in

less volatile cash flows, lower

default risk and a lower cost

of teams.

Prediction of a take-over target

There are some hypothesis/

theoretical explanations used to

predict when a company is an easy

target of a take-over or acquisition.

These include:-

(1) T h e g r o w t h r e s o u r c e

miss-match hypothesis :

A company with high growth

potential and low capital base

will be an easy target. The

predator can utilise the high

growth potential to generate

higher returns. Consequently

a firm with low growth potential

but high capital base means

that the capital resource is

underutilised. It therefore

becomes an easy target where

the resources are acquired by

the predator and utilised to

generate higher returns.

(2) I n d u s t r i a l d i s t u r b a n ce

hypothesis: Firms in an industry

following a lot of disturbances

associated with regulations by

the government, technological

changes and high levels of

competition become an easy

target of acquisition or a merger

in order to ensure survival.

(3) Inefficient management team

hypothesis: If the management

of the firm is inefficient in

utilisation of the assets, it means

the assets are underutilised and

therefore renders the firm an

easy target.

(4) Size hypothesis: In almost all

the cases, the predator will be a

large company acquiring small

target firm. This is because it

is difficult for a small firm to

acquire a large firm.

(5) Price Earnings Ratio Hypothesis:

To prevent dilution in the post

merger EPS, the predator will

New products and services(R&D/Strategic relationships)

Brand Equity(Recognition/Loyalty/Image)

Customers(Market share)

Sales(Marketing)

Profits(Efficiency)

Stock price/Net worth(market perception/Analyst reports)

Human resources(Acquisition or trained human capital)

New markets(New domestic or international markets)

Distribution channels(Technology/Relationship)

AcquisitionObjectives

Horizontal merger When two businesses combine that operate in the same industry or sector. For example, one radio station decides to merge with another radio station

Vertical mergerWhen a company decides to purchase its supplier or distributor. For example, when a soft drinks company decides to purchase the company that bottles their products

Conglomerate M&AWhen a company decides to purchase a business in a different industry or sector. For example a company in the tobacco industry decides to purchase a company which operates in the food industry

Friendly takeover When a company acquires a target company after the target company’s Board of Directors accepts the acquisition offer

Hostile takeoverWhen a company acquires a target company after the target company’s Board of Directors rejects the acquisition offer. The acquirer may pursue a tender offer for the target’s outstanding shares directly to its shareholders at a premium to the target’s share price

Reverse takeover When a private company acquires a public company, and therefore avoiding the IPO process while gaining access to the publi markets

Mergers and acquisitions


always acquire a target which

has a lower P/E ratio than itself.

Therefore a firm with a low P/E

ratio becomes an easy target of

a takeover.

(6) Market to Book Value per share

Hypothesis: Firms whose market

value to book value per share

is low are considered as “cheap

buys” therefore they become an

easy target of a takeover.

Defensive mechanism or tactics against a hostile takeover bid

The following techniques can be

used by a target in order to resist a

hostile bid by a predator:-

(1) Use of white knight – This

is where the target accepts

a takeover from a more

friendly company called the

“White Knight” instead of a

hostile predator. In this case,

the predator is locked out of

recognition.

(2) Use of poison pills – This is

where the company may opt

to buy back its shares at a

substantial premium above

the existing market price. The

shares bought back will involve

a huge cash flow which will

reduce the value of the firm

making it less attractive.

(3) Sale of crown jewels – This is

where the target sells off the

most attractive portion of the

business which makes it an

easy target therefore reducing

its attractiveness.

(4) Scorched earth policy – This is a

combination of the sale of crown

jewels in addition to which the

target may take a suicidal act

of borrowing high debt capital

to increase its gearing and

financial risk thereby reducing

its attractiveness.

(5) Use of green mail – This is

where the target makes a

counter offer to acquire the

shares of the predator. This is

only possible if the two firms

are almost equally strong. The

counter offer will reduce the

advances of the predator.

(6) Shark repellants – This

involves making super majority

amendments in articles of the

firm such that the acquisition or

take over must be supported by

a super majority, that is, 80% of

the members.

(7) Litigation and legal redress

– This is where the target can

apply to the regulatory authority

to justify that the acquisition will

make the predator a monopoly

therefore breaking the anti-trust

and anti-monopolist laws.

(8) The use of golden parachutes

– Golden parachutes are

the generous retirement

packages to be granted to the

management and employees

of the target if the firm is taken

over. This will significantly

reduce the value of the target.

Three main motives of takeovers

Strategic motives Financial motives Managerial motives

Improve and develop the business

Make best use of financial resources for shareholders Self-interest of managers

Closely linked to competitive advantage e.g. economies of scale

Improve financial performance e.g. higher profits

Not necessarily in the best interest of shareholderse.g. want to lead a bigger business


PREDATOR


Financing the acquisition/methods of paying consideration

For the predator to acquire the target, the payment/

purchase consideration may take the following form:

(1) Share for share exchange: This is where the predator

will be given a number of shares for every share of the

target acquired. This is called the exchange ratio. In

this method, the shareholders of the target become

the shareholders of the predator. It has the following

implications:

a) It conserves the cash of the predator since there is

no cash outflow.

b) There is increase in the order share capital of the

predator therefore reduction in gearing.

c) The predator has to pay a premium to acquire the

shares of the target.

d) It dilutes the ownership and control of the predator

since the shareholders of the target become the

shareholders of the predator.

(2) Use of cash: This is where the shareholders of the target

receive a cash payment and surrender their shares to

the predator.

The implications of this method are:

a) A large cash outflow which may cause liquidity

problems to the predator.

b) The shareholders of the target receive a huge capital

gain but completely lose their shareholding in both

the predator and the target.

(3) Use of convertible securities: In this case, the

shareholders of the target surrender their shares

and become either debenture holders or preference

shareholders. They will continue receiving interest

income or preference dividends from the predator.

The implications of this method are:

a) Conservation of cash on the part of the predator.

b) Increase in gearing on the predator due to issue of

fixed returns securities.

c) There is no dilution in ownership and control of the

predator since new shares are issued.

d) The shareholders of the target will lose their

ownership in the predator and will only become

debenture or preference shareholders.

e) The predator will gain interest tax shield since

interest charges are tax allowable.

(4) Combination of any of the three types of considerations

above.

Value gaps

These arise from the fact that market values of firms

acquired typically fall short of the value that potential or

actual bidders would place on them thus shareholders of

target companies mostly experience a beneficial wealth

effect.

Reasons why value gaps arise in mergers

(1) Poor corporate parenting: Value gaps may arise

because some business segments do not make their

maximum possible cash or profit contribution to the

parent. This is a reflection of poor central management.

(2) Poor financial management: The headquarters may be

following poor financing or dividend policies.

(3) Over enthusiastic bidding: Assessments of the bidding

company management may not have been correct

or shrouded by other reasons such as development.

(4) Stock market inefficiency: The market may fail to assess

the full value of a business because it is out of favour.

Before the transaction

Early stages of the merger/acquisition

Long-term transformation

Preserving value

Transitioning the business plan Run parallel operations

Consolidate and integrateIntegration strategy

Transform to the new organisation

Realising value Creating value



Causes for failure of mergers and acquisitions

(1) Poor strategic fit: The two companies have strategies

and objectives that are too different and they conflict

with one another.

(2) Social and cultural differences: It has been said that

most problems can be traced to people’s problems. If

the two companies have wide differences in culture,

then synergy values can be very elusive.

(3) Incomplete and inadequate due diligence: Due

diligence is the watchdog within merger and

acquisition processes and failure to observe it causes

serious problems.

(4) Paying too much: If synergies are not realised, the

premium paid to acquire the target is never recouped.

(5) Poorly managed integration: Integration is often

poorly managed with little planning and design

leading to failure of implementation.

(6) Overly optimistic: If the acquiring company is too

optimistic in its projections about the target company

then bad decisions would be made within the mergers

and acquisitions process.

Merger Analysis

The following are stages of merger analysis:

(1) Merger planning

(2) Searching and screening

(3) Financial evaluation

Merger planning

The predator should review its corporate objectives of

acquisition in light of its strength and weaknesses. It should

evaluate all of its businesses to identify those that need to

be added and those to be dropped.

Searching and screening

This involves searching for a possible candidate for

acquisition and short listing a few from any available

depending on objectives to be attained.

Financial evaluation

This helps to determine the earnings and cash flows, areas

of risk, maximum price payable for the acquisition and the

best means of financing the merger.

Steps in financial evaluation

(1) Identify post merger growth and profitability assumptions

and scenarios.

(2) Project the cash flows magnitudes and their timings.

(3) Estimate the required rate of return desired.

(4) Compute the net present value for each scenario.

(5) Decide whether the acquisition is profitable on the basis of

NPV criterion.

(6) Determine the best method that should be used to finance

the merger. That is the method that produces the highest post

merger earnings per share.

(7) Evaluate the impact of the merger on the earning and the

price earning ratio.

Mathematical computation:

The following formulas are important in determining the various

variables resulting from acquisitions and mergers:-

Exchange ratio =Offer price by predator

Pre-merger MPS of predator

If the predator offers to buy one share of the target for a price higher

than the current MPS of the target, the different constitutes share

premium offered to the shareholders of the target to induce to

them surrender their shares.

Premium = (Offer price by predator – MPS of target)

One of the most important variables in evaluating the merger is

the EPS (Earning per Share). The pre-merger and post-merger EPS

of the target and predator are computed in order to evaluate the

percentage accretion (increase) or dilution (decrease). The EPS is

based on the earnings attributable to ordinary shareholders.

Post-merger EPS (predator)

=Combined Earnings to ord. shareholders

Pre-merger No. of shares of predator

+New shares issued to acquire target

New shares issued to acquire target =Exchange ratio*Premerger number of shares of target

Post merger EPS (Target) =(Post merger EPS of predator x Exchange ratio)

Non diluting offer price/maximum offer price

= Pre-merger P/E ratio x pre-merger EPS of predator of target

Maximum exchange ratio=

=Maximum offer price


Post-MPS of the predator

=Pre-merger market value + Pre-merge market of target

Pre-merger no. of shares + New shares issued of predator to acquire target

Post-merger MPS of target = (Post-merger MPS of predator x exchange ratio)



Example one

Maji Mengi Ltd. is considering acquiring Mali Mengi Ltd. Selected

financial data for the two companies are as follows:

Maji Mengi Ltd Mali Mengi Ltd

Annual sales (Kshmillions) 1, 500 180

Net incomes (Kshmillions) 120 15

Ordinary shares outstanding (millions) 30 6

Earning per share (EPS) (ksh) 8 5

Market price per share (ksh) 88 40

Both companies are in the 30% tax bracket.

Required:

a) Calculate the maximum exchange ratio Maji Mengi Ltd.

should agree to if it expects no dilution in earnings per share.

b) How many premiums would the shareholders of Mali Mengi

Ltd. receive at this exchange ratio?

c) Calculate post merger EPS of Maji Mengi Ltd. and Mali Mengi

Ltd. if the two companies settle on a price of sh 48.4

d) Calculate post merger MPS of Maji Mengi Ltd. and Mali Mengi

Ltd. if the two companies settle on a price of sh 48.4

e) Calculate Maji Mengi Ltd’s EPS if Mali Mengi Ltd’s shareholders

accept one 12% convertible preference share (stated value

sh100) for every 5 ordinary shares they own.

Solution

a) Maximum exchange ratio =Maximum offer price


Non diluting offer price/maximum offer price

=Pre-merger P/E ratio of predator x pre-merger EPS of target

Where P/E ratio =MPS

EPS

Non dilutive offer price =88 *5

=sh55 8

Maximum exchange ratio =55

= 0.62588

b) Premium = (Offer price by predator – MPS of target)

55-40 = 15

Total premium = 15*6000000

= sh 90 millions

c) If offer price is sh48.4

Post merger EPS of predator (Maji Mengi Ltd)

=Combined Earnings to ord. shareholders

Pre-merger No. of shares of predator

+ New shares issued to acquire target

New shares issued to acquire target

=Exchange ratio*pre-merger

shares of Target

Maximum exchange ratio = 48.4*6

millions88

= 3.3million shares

EPS =120million + 15million

30million + 3.3millio

= Sh4.054

Post merger EPS of target (Mali Mengi ltd) =

(Post merger EPS of predator x Exchange ratio)

4.054* 48.4 = 2.2297

88

d) Post merger of predator (Maji Mengi Ltd) =

pre-merger market value of predator

+Pre-merge market

of target

Pre-merger No. of shares + New shares issued

88*30m+40*6m = Sh 86.47

30m+3.3m

Post merger MPS of Mali Mengi = (Post merger EPS of predator x Exchange ratio)

86.47*48.4= Sh 47.56

88

e) 1 preference share for 5ordinary shares held ? Preference share for 6m5ordinary shares held

6m* 1 = 1.2 million

5

Post merger EPS (predator)Total incomes (120m+15m) = Sh 135 millionLess preference dividends(6%*1.2m*100) (7.2 m)Earnings attributable to ord shareholders 127.8

EPS = 127.8m

= Sh 4.2615m


Our business is really simple. When you look at a deal and its structure looks like an octopus or spider, just don’t do it.

Timoth Sloan, CFO Wells Fargo

Minimum entry requirements for diploma qualifications:Kenya Certificate of Secondary Education (KCSE) with a mean grade of at least grade C- (C Minus) or equivalent qualifications.

Providing globally competitive professionals

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its computing resources and

applications from any location via an

internet connection.” Scholars in the

ICT field call it a supercharged version

of delivering hosted services over

the internet to enable organisations

to increase their business model

capabilities and their ability to meet

computing resource demands while

avoiding significant investments in

infrastructure, training, personnel

and softwares.

In short, Cloud Computing is an

Internet-based model of computing

whereby shared resources, software

and information are provided to

computers and other devices on

demand.

Why risk management for cloud computing

In the year 2010, an executive

from one of the world’s most

powerful search engines “Google”

testified in a U.S congregational

sub-committee that more than

three million businesses worldwide

were customers of its cloud services

offerings. Experts in the ICT field

including the information tecnology

techno savvy predict that cloud

computing will be a $140 billion

industry by the year 2016.

Technological advancements

in system virtualisation, system

resource management and

the internet have led to the

emergence of cloud computing as

a viable alternative for meeting the

technology needs of many types of

enterprises, with many resonating

benefits.

The intent of this article therefore is

to leverage the principles of COSO’s

RISK MANAGEMENT FORCLOUD COMPUTING

Introduction

The advent of the undersea fibre

optic cables in Kenya a few years

back brought with it cheaper

and faster internet connectivity

and firmly ushered Kenya onto the

information superhighway map.

This was a major milestone for

Kenya considering that information

processing has moved from

mainframes to personal computers,

to server-centric computing and

finally to the web.

Today, many organisations are

seriously considering adopting

cloud computing, the next major

milestone in information technology

and business collaborations.

Cloud computing defined

Cloud computing has been defined

by the United States of America

National Institute of Standards and

Technology as a model for enabling

ubiquitous, convenient, on-demand

network access to a shared pool of

configurable computing resources

(e.g. networks, servers, storage,

applications and services) that can

be rapidly provisioned and released

with minimal management effort

or service provider interaction.

Other IT gurus have defined it as “a

computing resource deployment

and procurement model that

enables an organisation to obtain

Shared resourcesSoftware

Information

Fred

erick

Buc

hana

n, CP

A gra

duat

e, In

tern

al Au

ditor,

Univ

ersit

y of N

airob

i


Enterprise Resource Management

(ERM) integrated framework in

order to provide an insight on how

to identify succinctly the risks and

impact cloud computing will have

on organisations. The guidelines

presented here will also enlighten

and enable those adopting cloud

computing either as consumers

or providers of cloud services to

identify, monitor and mitigate/

accept the risks that come with

cloud computing. The users could

be executives, system planners,

program managers, technologists,

auditors, ICT personnel and others.

Cloud computing terminologies

Cloud Service Provider (CSP): This

is a third party vendor who provides

application, delivery, hosting,

monitoring and other services

through cloud computing.

Multi-tenant: With the existence of

many CSPs, a customer is a single

tenant among many tenants sharing

resources and technologies.

Cloud engineering: Cloud

engineering is a systematic

approach to the high-level

concerns of commercialisation,

standardisation and governance

in conceiving, developing,

operating and maintaining cloud

computing systems by applying

engineering disciplines. It is

therefore a multidisciplinary method

encompassing contributions from

diverse areas such as systems,

software, web, performance,

information, security, platforms, risk

and quality engineering.

Cloud deployment models

There are mainly four types of CDMs.

Priva te cloud: The c loud

infrastructure is provisioned for

exclusive use by a single organisation

comprising multiple consumers (e.g.

business units). It may be owned,

managed, and operated by the

organisation, a third party, or some

combination of them, and it may

exist on or off the premises.

Community cloud: The cloud

infrastructure is provisioned for

exclusive use by a specific community

of consumers from organisations that

have shared concerns (e.g. mission,

security requirements, policy, and

compliance considerations). It may

be owned, managed and operated

by one or more of the organisations

in the community, a third party, or

some combination of them and it

may exist on or off the premises.

Public cloud: The cloud infrastructure

is provisioned for open use by the

general public. It may be owned,

managed, and operated by a

business, academic, or government

organisation, or some combination

of them. It exists on the premises of

the cloud provider.

H y b r i d c l o u d : Th e c l o u d

infrastructure is a composition of two

or more distinct cloud infrastructures

(private, community, or public)

that retain unique entities, but are

bound together by standardised or

proprietary technology that enables

data and application portability (e.g.

cloud bursting for load balancing

between clouds).

Private cloud

Public cloud

Private cloud

Hybrid cloud

Cloud computing


Cloud service delivery models

There are many cloud service

delivery models. They include:

Software as a Service (SaaS): This

model provides the consumer with

the capability to use the provider’s

applications running on a cloud

infrastructure. The applications

are accessible from various client

devices through either a thin client

interface, such as a web browser

(e.g. web-based email) or a program

interface. The consumer does not

manage or control the underlying

cloud infrastructure including

network, servers, operating

systems, storage, or even individual

application capabilities, but is

provided with limited user-specific

application configuration settings.

Platform as a Service (PaaS): A

cloud service delivery model where

the capability provided to the

consumer is to deploy onto the cloud

infrastructure consumer-created or

acquired applications created using

programming languages, libraries,

services, and tools supported by the

provider. The consumer does not

manage or control the underlying

cloud infrastructure including

network, servers, operating systems,

or storage, but has control over the

deployed applications and possibly

configuration settings for the

application-hosting environment.

Infrastructure as a Service (IaaS):

This is a delivery model where the

consumer is provided with the

capability of processing, storage,

networks and other fundamental

computing resources. This enables

the consumer to deploy and run

arbitrary software, which can include

operating systems and applications.

The consumer does not manage

or control the underlying cloud

infrastructure but has control over

operating systems, storage and

deployed applications; and possibly

limited control of select networking

components such as host firewalls.

Integration as a Ser vice

(IgaaS): This is a delivery model

that inputs the functionality of

system integration into the cloud,

providing data transport between

the organisation-wide systems

and third parties (suppliers and

other trading partners) on demand.

Small and Medium Business (SMBs)

use IgaaS because it enables any

type of business-to-business (B2B)

integration at low cost with a light

IT footprint. This model allows SMEs

to focus their resources on their core

businesses instead of managing

costly IT infrastructure.

Business Process as a Service

(BPaaS): This is sometimes called

Business Process Management as a

Service (BPMaaS) and it refers to any

business process delivered within a

cloud service model (multitenant,

self-service provisioning, elastic

scaling and usage metering or

pricing) through the internet

accessing via web-centric interfaces

and exploiting web-oriented cloud

architecture. BPaaS is an emerging

cloud service model whereby the

clients can consume business

outcomes (payroll processing or

human resource) by accessing

business services via web-centric

interfaces on multi-tenant and

shared infrastructures.

IaaSInfrastructure-as-a-service

host

PaaSPlatform-as-a-service

build

SaaSSoftware-as-a-service

consume

Cloud computing


Desktop as a Service (DaaS): This

is also referred to as virtual desktop

or hosted desktop services and is a

multi-tenant architecture that is based

on outsourcing of a virtual desktop

infrastructure (VDI) to a third party

service provider. Clients can use the

services on subscription basis. In this

delivery model, the service provider

manages the back-end responsibilities

of data storage, backup, security and

upgrades. The client’s personal data is

copied to and from the virtual desktop

during logon/logoff. However, access

to the desktop is device, location and

network independent.

Testing as a Service (TaaS): The aim

of this delivery model is to enable

organisations do a realistic proof-of-

concept test before they decide to

transform their IT to the required cloud

computing model via an emulator.

This service will allow the clients to

monitor how significant factors can

affect the network such as packet loss,

bandwidth, latency and response time

for better decision making.

Management as a Service (MaaS):

This is an on-demand service that

provides the ability to manage one or

more cloud services such as topology,

resource utilisation, virtualisation and

uptime management. Common Cloud

Management Platform (CCMP) contains

a set of business and operational

management-focused services for

managing and delivering instances of

cloud services of any category to the

clients and allowing them to manage

their cloud service instances in a

self-service mode.

Security as a Service (SecaaS): Security

as a Service refers to delivery of a secure

platform and applications to the clients

as per their request. If security is fully

under the management of a provider,

clients will feel lack of control on their

private data. The security must be a

shared agreement between the client

and provider. When the clients are

able to maintain their own personal

security keys, it will give them a sense of

confidence for storing their confidential

data on cloud. In order to ensure the

safety of client’s data, the provider

needs to offer anti-virus, anti-malware

and several other security related

software to clients as services.

Storage as a service (STaaS): This is a

business model in which a large service

provider rents space in their storage

infrastructure on a subscription basis.

The economy of scale in the service

provider’s infrastructure allows them

to provide storage much more cost

effectively than when the clients do it

on their own. It is often used to solve

offsite backup challenges. Critics of

storage as a service point to the large

amount of network bandwidth required

to conduct their storage utilising an

internet-based service.

API as a service (APIaaS): API as

a service is a service platform that

enables the creation and hosting of APIs

(application programming interfaces).

These API’s normally provide multiple

entry points for API calls.

Opportunities presented by cloud computing to organisations

Some of the opportunities associated

with almost all forms of cloud

computing include;

• Cost savings

• Speed of deployment

• Scalability and better alignment

of technology

• Decreased effort in managing

technology

• Environmental benefits.

Benefits of cloud computing

Technological advancements in

system virtualisation, system resource

management and the internet have led

to the emergence of cloud computing

as a variable alternative for meeting

technology needs of many types of

enterprises, with the following benefits

resonating with executives:

• Instantaneous computing

resource fulfillment

THREE BIG CLOUD DRIVERS

Other

Internal mandate to move to cloud

Open source projects

Customer demand

Cloud API’s

Competitive advantage

Innovation

Mobility

Capex to Opex

Cost

Business agility

Scalability

Cloud computing


• Greater value from technology

expenditures at lower costs

• Common technology platforms

that can facilitate standardisation

• Decreased need for internal

technology support personnel.

Risks associated with cloud computing

Like any other new opportunity, cloud

computing entails commensurate

risks. It brings to organisations a

different dimension of collaboration

and human interaction, new

organisational dependencies, faster

resource fulfillment and new business

models. Cloud computing can present

a significant change to the business

operating environment. Use of COSO’s

ERM integrated framework will facilitate

the identification of risks and mitigation

strategies.

Cloud computing presents significant

opportunities as well as uncertainty.

The types of risks like security, integrity,

availability and performance are the

same with systems in the cloud as

they are with non-cloud technology

solutions.

An organisation’s level of risk and

risk profile will in most cases change

if cloud solutions are adopted

(depending on how and for what

purpose the cloud solutions are used).

This is due to increase or decrease in

likelihood and impact with respect

to risk events (inherent and residual)

associated with the CSP that has been

engaged for services. The most typical

risks associated with cloud computing

include:

a) Disruptive force

b) Residing in the same risk

ecosystem as the CSP and other

tenants of the cloud

c) Lack of transparency

d) Reliability and performance

issues

e) Vendor lock-in and lack of

application portability or

interoperability

f ) Security and compliance

concerns

g) High value cyber attack targets

h) Risk of data leakages

i) I n for m at ion te c h n ol ogy

organisational changes

j) Cloud service provider viability

All these cloud computing risks should

be given careful consideration, that is,

undergo a risk assessment process

since materialisation of any of the

risks will present very undesirable

consequences. Many of these risks are

not likely to be mitigated by contractual

clauses with a CSP (assuming that the

contract is even negotiable, most

commodity cloud contracts are not).

Consequently, mitigation solutions

may need to be implemented outside

the immediate solution provided by

the CSP.

Changes brought by cloud computing in business operations

In some cases, cloud computing

can easily enter into an organisation

while bypassing typical management

oversight controls. When an

organisation invests significant

resources in an endeavor that could

take months or years to complete,

conventional processes and controls

require management’s involvement

and approval. Such endeavours

are highly likely to attract senior

management’s attention in the form

of risk assessments, audits, and steering

committees. Some cloud solutions

can easily be adopted within a short

period of time while requiring a

small monetary investment and the

involvement of very few personnel.

Figure 1 overleaf illustrates how,

with cloud computing, some of the

typical control trigger points (such

as personnel resources and required

finances) might not reach the levels that

would typically invoke the oversight of

senior management.

CLOUD RISK SECURITY AREAS

Data explosion Tech

OPS

OrgIntegr.

SVCMgt

Governance

Skill sets

Organisational

Compliance

Insider & external attacks

Data protection

Management systems

Expanding perimeter Data portability

Cloud computing


Fig 1: How cloud solutions can be adopted while eluding management oversight

It is paramount that management also understands that with most cloud solutions (with

the possible exception of an internal private cloud), the organisation has less direct

control of the solution and consequently a higher level of inherent risk. For example, an

organisation using a SaaS (public cloud) solution has shifted responsibility for some or all

of its IT functions, including controls, to a third-party provider. Figure 2 below illustrates

the degree of control the organisation retains and relinquishes, depending on the type

of cloud service delivery and the deployment model.

Inherent risk relationship with cloud service delivery and deployment models

Specifically, the maximum amount of control and least amount of inherent risk are

associated with an IaaS (private cloud) solution. In contrast, with a SaaS (public cloud)

solution, the organisation retains the least amount of control and must accept the highest

level of inherent risk. In all cases, management should evaluate the cloud deployment

and delivery models in the context of acceptable risk levels as this will determine the

preferred type of cloud computing environment and related requisite controls.

Cloud solution creation in an organisation

Figure 3 below depicts how specific

cloud solution candidates are

derived by choosing among the

various options with respect to

cloud-supported business processes,

deployment models, and service

delivery models.

Applying the COSO risk management framework to cloud computing options

While adopting cloud computing

could be a major change for an

organisation, management can use a

proven ERM framework to effectively

assess and manage the related risks.

The COSO framework has established

a common language and foundation

that can be used to construct an

effective cloud governance program

tailored specifically for a given cloud

solution.

In Figure 4 on the opposite page,

the framework is represented as a

Fig 3: Cloud solutions creation frameworkFig 2: Degree of control based on delivery model

Cloud computing


pathway in which each ERM component (starting with internal environment) is applied

in order to understand the specific advantages and disadvantages that a given solution

candidate would bring to the organisation. When the process is completed for each cloud

solution candidate, the ideal cloud solution will emerge along with its related requisites

for establishing cloud governance.

In cases where a cloud solution has already

been implemented, the COSO’s ERM

framework can be used to establish, refine,

or perform a quality assurance check of the

cloud governance program by ensuring

that all major aspects of the program

(such as objectives, risk assessment and

risk response) have been addressed with

respect to the management’s requirements.

An effective cloud governance program can

still be achieved by applying the COSO’s ERM

framework after the implementation of a

cloud solution.

COSO ERM framework, the management can

succinctly identify the related risks and desired

risk acceptance or mitigation strategies with each

cloud solution scenario (as risks will vary with

each combination of options). This evaluation

will enable management to make prudent

risk management and governance decisions

in selecting its ideal set of cloud solution

options and creating a well-thought-out cloud

governance program before the cloud solution

is implemented.

Risk profile impact of CSPs and fellow cloud tenants

Figure 5 below shows a combined ERM

Component Universe of an organisation

with its CSP.

The organisation’s data and processes are

hosted in a shared environment with other

cloud tenants. The behavior and events of the

CSP and fellow tenants could have a direct

impact on the organisation. Since the risks to

which a CSP is exposed can have an impact

on its cloud customers, these risks must be

incorporated into the risk profile of all the

organisations using the CSP’s solutions.

This blending of environments is likely to

change the organisation’s risk profile and

therefore require new and different controls.

This combination of risk profiles might also

extend to fellow tenants that are sharing the

same cloud infrastructure resources.

As part of its cloud risk assessment process,

management may need to consider

risk-related information about its fellow

tenants, for example, their identities, the

applications they deploy and their likelihood

of becoming targets of cyber-attacks.

Consequently, the management’s ERM

program should address the combined

universe of its own organisation’s

ERM components along with the ERM

Cloud computing

Fig 5: A combined ERM Component Universe

of an organisation with its CSP

Fig 4: How COSO’s ERM framework can be used to perform quality assurance check of a cloud solution

The best-practice situation is when management uses the COSO ERM framework to

identify the ideal configuration of cloud solution options, that is, business process,

deployment model and service delivery model) that fits the management’s risk appetite.

By evaluating the cloud solution candidates in the context of each component of the


components of the CSP. Management needs

to identify the risks and events that could

affect its own organisation and those that

could affect its CSP and fellow cloud tenants.

Levels of control by cloud service delivery models

The amount of control retained over the

technology architecture is dependent on

the selected cloud service delivery model.

The following exhibit illustrates the degree

of control the organisation retains over

specific technology components (such as

the application systems, virtual machine

environments, servers, and storage) when

comparing self-managed and self-owned

facilities with the various cloud service

delivery models.

Recommended risk responses for cloud computing

The table below illustrates some of the appropriate risk responses for cloud computing.

Type of Risk Risk Response

Explanation

Unauthorised cloud activity

Cloud policies and controls

• Establish a cloud usage policy that clearly articulates the business processes and data that management deems appropriate to be supported by cloud computing solutions;

• Create or update a policy that identifies who is authorised to procure cloud computing services;• Identify approved cloud vendors; and• Define policy and communicate guidance on the management of relationships with CSPs

Lack of transparency

Assessment ofthe CSP control environment

To partially overcome the challenges of gaining insight into a CSP’s operations and controls, management should include control-related inquiries in a request for proposal or in the due diligence process.

Management should also attempt to include a right-to-audit clause in the contract with each CSP. As part of assessing the CSP’s internal environment, management should (preferably before the CSP is engaged) conduct interviews to determine how the CSP would address certain risk events. Management could have its internal audit function perform an evaluation on areas of security, availability, processing integrity, confidentiality or privacy.

Security, compliance,data leakage and data jurisdiction

Data classificationpolicies and processes

CSP contract terms related to country location (i.e. domestic or international) of customer data should be determined and evaluated with respect to data protection law compliance. It is a prudent precautionary action for management to understand the regulatory implications and legal jurisdiction responsibilities with respect to its organisation’s data in advance of moving to a third-party hosted cloud solution.

While an organisation cannot control exactly where its data is stored when using a public or hybrid cloud deployment model, it can control the type of information that resides in the cloud. From a risk management perspective, it is critical for any organisation using public or hybrid cloud computing solutions to have effective data classification policies and processes in place which includes;• Mapping legal, regulatory, intellectual property and security requirements to the various types of data;• Determining the sensitivity (public, restricted or highly sensitive) of the various types of data;• Establishing requirements (such as encryption) for data transmission; and• Identifying data owners – individuals who have the proper knowledge and authority to decide who should be granted data access and the

type of data access (e.g. a business manager or compliance officer).

Cloud computing


Type of Risk Risk Response

Explanation

Transparency andrelinquishing direct control

Management oversight and operations monitoring controls

In the public or hybrid cloud models, management transfers partial or complete direct control to the CSP. In most situations, the CSP is focused on providing a stable and secure platform that meets the control requirements of its customers from a macro perspective. It is the responsibility of management to assess the CSP’s cloud solution in detail and implement additional controls so that the CSP’s cloud solution meets all of the organisation’s requirements.

Management needs to have a precise understanding of the controls it is relinquishing to its CSP as this understanding will determine the specific monitoring controls that management should implement. In the case of a publicly held company, added precautions should be applied if management is relinquishing those controls that affect management’s financial statement assertions.

To prevent complexities from materialising, the CSP contract should preclude any form of subcontracting. An organisation using hybrid or public cloud computing solutions should validate the control activities of its CSP to ensure that they align with management’s risk appetite. The organisation should also periodically verify the effectiveness of the controls maintained by the CSP.

Depending on the selected cloud service delivery model, control responsibility between the organisation and its CSP might be shared in the areas of implementation, technology operations and user access administration.

Reliability, performance,high-value cyber-attack target

Incident management

An organisation needs to evaluate its CSP’s capability to provide adequate incident response in addition to its own incident response procedures for system disruption and data theft scenarios.

A CSP’s system failure or security breach is likely to affect multiple customers. When these types of events occur, the CSP’s initial focus will be to resolve the issue for its cloud environment; that is, the CSP is unlikely to focus on addressing the issues of each tenant individually. As a result, management’s incident response plan should not rely solely on its CSP unless management is willing to accept the worst-case scenario for CSP support if an adverse incident were to occur. The following elaborates on the inherent risks and related mitigation controls for situations related to cloud solution system failures (i.e. reliability and cyber-attacks):

System failure – System failure is a risk event that can occur in any computing environment. In the event of a catastrophic system failure and multiple tenants simultaneously requiring support, lower-priority organisations might not receive the required service level response from the CSP.

Controls that can mitigate the risk of system failure:• Engage other CSPs that have the same solution as your primary CSP and maintain copies of your organisation’s data so it can easily be

deployed to the backup CSP;• Implement processes to monitor system availability;• Implement automated tools that provide resources on demand for the cloud solution from another service provider; and• Review service-level agreements to ensure that the CSP will provide adequate response in the event of system failures.

Cyber-attacks – Every organisation has an inherent risk of cyber-attacks on its systems. The consolidation of multiple large organisations on a CSP’s infrastructure presents to hackers a larger and possibly a more well-known target.

Controls that can mitigate the risk of cyber-attacks:• Host only nonessential and non sensitive data on third-party CSP solutions;• Deploy encryption over data hosted on cloud solutions;• Have a defined fail-over strategy that would leverage another CSP’s solution or an internal solution.

Non compliance with regulations

Monitoringof the external environment

Management needs to monitor for changes in the external environment that would affect its own operations and the operations of its CSP. Changes to regulations or telecommunication providers may have a significant impact on how cloud computing can be used.

Major regulatory changes are anticipated in the area of data privacy. Various countries are implementing protective measures to restrict moving and storing their citizens’ personally identifiable information outside their country borders. As a result, cloud-based solutions may need to be designed to store certain data within specific countries’ borders instead of storing the data in a country that is at the CSP’s discretion.

Vendor lock-in Preparation of an exit strategy

The more an organisation uses a CSP’s solution and the longer it uses the solution to support its operations, the more it depends on the CSP. Nothing lasts forever; it would be prudent for management to anticipate the future need for changing CSP vendors or moving off a cloud solution. Consequently, management should develop an exit strategy or contingency plan as part of its overall cloud strategy.

Non compliancewith disclosure requirements

New disclosuresin financial reporting

New disclosures may be required of publicly traded companies that rely on CSPs to support their critical business processes. In light of cloud computing solutions’ potential impact on business operations and other risk factors, public companies need to remain aware of the disclosures they are required to make as part of their regulatory compliance and transparency obligations.

Cloud computing


Cloud computing governance roles and responsibilities

A strong ERM program to govern cloud activities requires senior management to take on additional responsibilities. The following schedule describes the assignment of key cloud responsibilities with the management of an organisation:

Position ResponsibilitiesBoard ofDirectors

• Be aware of cloud computing trends and understand management’s perspective on the impact of cloud to the industry and its business model• Be aware and have oversight of transformative IT projects such as cloud services• Understand how management is balancing risks with the benefits of cloud as part of its business and technology strategy• Leverage internal audit resources for assurance that cloud initiatives are in alignment with the organisation’s risk appetite and controls philosophy.

ChiefExecutive

Officer

• Define the organisation’s point of view and policies regarding outsourcing• Understand the impact cloud computing is having on the organisation’s industry• Be aware of where and how the organisation is using cloud computing.

ChiefFinancial

Officer

• Provide new disclosures regarding cloud usage in financial reporting• Evaluate and monitor the total cost of ownership and return on investment with cloud computing• Evaluate tax and accounting benefits of cloud computing versus alternatives• Implement policies and controls over procurement of cloud services• Monitor the financial health of each third party CSP.

ChiefLegal

Officer

• Ensure that the organisation’s cloud activities comply with laws and regulations • Monitor for new laws and regulations that would impact the organisation’s cloud solution or its CSP and establish a plan for compliance• Review and approve cloud services procurement policies• Provide input on data classification policies and processes• Review CSP contracts and ensure protection of the organisation’s interests and rights• Understand the legal jurisdiction aspects of the organisation’s operations as they relate to using cloud services hosted in different countries.

ChiefInformation

Officer

• Understand and monitor cloud computing’s potential to support current business strategies and new business opportunities• Establish overall strategy for leveraging and aligning cloud solutions• Facilitate the integration of cloud solutions into the organisation and with the current IT infrastructure• Assist with incorporating cloud governance into the organisation’s ERM program• Implement a data classification scheme in conjunction with data owners• Establish cloud processes for resource provisioning, user access management and change management• Establish the organisation’s cloud incident management program• Monitor and enforce CSP service-level agreements• Monitor activities of the CSP and fellow cloud tenant customers

Chief AuditExecutive

or InternalAuditor

• Perform periodic audits to evaluate the design and effectiveness of the blended control environment in which controls and processes are shared with the CSP

• Audit the CSP or review SOC reports to verify the effectiveness of CSP controls relied upon by the organisation• Perform periodic compliance audits of data residing on external clouds to verify compliance with data classification polices• Audit CSP spend and contractual compliance• Evaluate cloud governance

Conclusion

Cloud computing has much potential to bring about change to organisations as the internet did during the last decade of

the 20th century. With time, cloud computing will establish its position on the historical timeline of technology evolution.

The adoption and acceptance of cloud computing is congruent with the popularity and acceptance of other trends of the

past decade like the social networking sites and virtual retailing including the now common mobile fund transfers in which

the people and facilities cannot be seen but are greatly trusted to facilitate communications, store information and transact

businesses.

Today with most of the available cloud solutions, the successors of past generation managers have a much cheaper technology

option available in which they can neither tour/visit the organisation’s information assets where they are stored in well

Cloud computing

guarded facilities nor have knowledge of the exact location of

their organisation’s information assets.

Ideally, some of the unique aspects of cloud computing can

pose new challenges to Enterprise Risk Management programs

in an organisation. The apparent simplicity of adopting cloud

computing belies how complex its management can become

when risks materialise. It will be naive to think that cloud

computing will allow an organisation to avoid adverse events

like criminal activities, human errors, unforeseen accidents and

disruption that can befall any type of organisation.

Effective cloud governance is highly dependent on an accurate

understanding of the risks, combined with well contemplated

risk mitigation or acceptance strategies. By leveraging the

COSO’s ERM framework, management will have an effective

and consistent approach in identifying the universe of specific

risks and risk responses that each cloud computing opportunity

and decision entails.

Applying cloud computing without proper care, due diligence

and controls is bound to cause unforeseen problems but; used

appropriately with the necessary precautions and controls in

place by applying the COSO’s ERM framework, cloud computing

could yield a number of benefits, some unheard of until now

and some yet to be discovered. By being aware of the risks and

other issues related to cloud computing, managers are more

likely to achieve their organisation’s objectives as they manage

the risks in today’s dynamic and evolving environment. Cloud

computing is likely to become the most popular computing

model of the future.

N/B: For more information about COSO and its ERM integrated

framework, please refer to the previous edition of the article

entitled “Enterprise Risk Management, the COSO Framework.”

Cloud computing

With Kenya, being an Investment destination ICIFA

mission is to develop a talent pipeline for Investment

& Financial Analysts in developing economies within

the Sub-Saharan Africa.

Being an ICIFA member provides an opportunity for

networking, gaining more knowledge in Financial

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ICIFA as a professional body is dedicated in regulating

professionals in financial markets in efforts of

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We invite eligible members to join our membership

under the Full membership category. This

membership is open to all CSIA/CIFA graduates.

Registration fee is Kshs 6,000. Yearly subscription is Kshs. 6,000.

Affiliate member of ACIIA and APSEA

INSTITUTE OF CERTIFIED INVESTMENT & FINANCIAL ANALYSTSP.O. Box 48250-00100 NAIROBI,

KASNEB TOWERS, Hospital Road Upperhill, Nairobi Kenya. Mobile: 0726498698 Email: [email protected] Website: www.icifa.co.ke


To determine value received

for money paid, relative

value and the prospective

differences in risk-adjusted return

offered by different stocks at current

market prices, the analyst must

engage in valuation. Valuation is

the estimation of an asset’s value

based either on variables perceived

to be related to future investment

returns or on comparisons with

THE EQUITY VALUATION PROCESS

similar assets. Skill in valuation is one

very important element of success

in investing.

Scope of equity valuation

Investment analysts work in a

wide variety of organisations and

positions. As a result, they find

themselves applying the tools of

equity valuation to address a range

Every day, thousands of participants in the capital markets — investors,

portfolio managers, regulators, researchers, analysts — face a common and

often perplexing question: What is the value of a particular stock? The answers

to this question usually determine success or failure in achieving investment

objectives. For one group of those participants — equity analysts — the question

and its potential answers are particularly critical. Determination of the value of

an ownership stake lies at the heart of their professional activities and decisions.

BUSINESS

Emly

n Ja

mes

Ngw

iri, R

esea

rch An

alyst,

Sunt

ra In

vestm

ent B

ank

(This article is in two parts. Part 2 of the article will be carried in Issue No. 3, July-September 2015)


of practical problems. In particular,

analysts use valuation concepts and

models to accomplish the following:

• Selecting stocks: Equity

analysts must continually

address the same question

for every common stock

that is either a current or

prospective portfolio holding,

or for every stock that he or

she is professionally assigned

to analyse: Is this a security my

clients should purchase, sell,

or continue to own? Equity

analysts attempt to identify

securities as fairly valued,

overvalued, or undervalued,

relative to either their own

market price or the prices of

comparable securities.

• I n fe r r i n g ( ex t ra c t i n g )

m a r ke t e x p e c t a t i o n s :

Market prices reflect the

expectations of investors

about the future prospects of

companies. Analysts may ask,

what expectations about a

company’s future performance

are consistent with the current

market price for that company’s

stock? This question may

concern the analyst for several

reasons:

– There are historical and

economic reasons that

certain values for earnings

growth rates and other

company fundamentals

may or may not be

reasonable. (Fundamentals

are characteristics of

a company related to

profitability, financial

strength, or risk.)

– The extracted expectation

fo r a f u n d a m e n t a l

characteristic may be

useful as a benchmark or

comparison value of the

same characteristic for

another company.

• Evaluating corporate events:

Investment bankers, corporate

analysts, and investment

analysts use valuation tools to

assess the impact of corporate

events such as mergers,

acquisitions, divestitures,

spin- of fs , management

buyouts (MBOs) and leveraged

recapitalisations. Each of these

events may affect a company’s

future cash flows and so the

value of equity. Furthermore,

in mergers and acquisitions, the

company’s own common stock

is often used as currency for the

purchase; investors then want

to know whether the stock is

fairly valued.

• Rendering fairness opinions:

The parties to a merger may

be required to seek a fairness

opinion on the terms of the

merger from a third party

such as an investment bank.

Valuation is at the centre of

such opinions.

• E v a l u a t i n g b u s i n e s s

strategies and models:

Companies concerned with

maximising shareholder value

must evaluate the impact of

alternative strategies on share

value.

• C o m m u n i c a t i n g w i t h

analysts and shareholders:

Valuation concepts facilitate

communication and discussion

among company management,

shareholders, and analysts on

a range of corporate issues

affecting company value.

• A p p r a i s i n g p r i v a t e

businesses: Another important

use of the tools we present is

to value the common stock

of private companies. The

stock of private companies

by definition does not trade

publicly; consequently, we

cannot compare an estimate

of the stock’s value with a

market price. For this and

other reasons, the valuation of

private companies has special

characteristics.

Valuation and portfolio management

Although valuation can take place

without reference to a portfolio,

the analysis of equity investments

is conducted within the context of

managing a portfolio. We can better

appreciate the scope of valuation

when we recognise valuation

as a part of the overall portfolio

management process.

An investor’s most basic concern

is generally not the characteristics

of a single security but the risk

and return prospects of his or her

total investment position. How

does valuation, focused on a single

security, fit into this process?

From a portfolio perspective, the

investment process has three steps:

planning, execution and feedback

(which includes evaluating whether

objectives have been achieved,

and monitoring and rebalancing

of positions). Valuation, including

equity valuation, is most closely

associated with the planning and

execution steps.

(a) Planning

Here, the investor identifies and

specifies investment objectives

(desired investment outcomes

relating to both risk and return)

Equity valuation process


and constraints (internal or external

limitations on investment actions).

An important part of planning

is the concrete elaboration of an

investment strategy, or approach

to investment analysis and security

selection, with the goal of organising

and clarifying investment decisions.

Not all investment strategies involve

making valuation judgments about

individual securities. For example,

in indexing strategies, the investor

seeks only to replicate the returns

of an externally specified index

— such as the NSE 20 or the NASI.

Such an investor could simply buy

and hold stocks in index proportions

pegged to either the NSE 20 or the

NASI, without the need to analyse

individual stocks independently.

Valuation, however, is relevant,

and critical, to active investment

strategies. To understand active

management, it is useful to introduce

the concept of a benchmark - the

comparison portfolio used to

evaluate performance - which

for an index manager is the index

itself. Active investment managers

hold portfolios that differ from

the benchmark in an attempt to

produce superior risk-adjusted

returns. Securities held in different-

from-benchmark weights reflect

expectations that differ from

consensus expectations (differential

expectations). The manager must

also translate expectations into value

estimates, so that securities can be

ranked from relatively most attractive

to relatively least attractive. This step

requires valuation models. In the

planning phase, the active investor

may specify quite narrowly the

kinds of active strategies to be used

and also specify in detail valuation

models and/or criteria.

(b) Execution

In the execution step, the manager

integrates investment strategies with

expectations to select a portfolio

(the portfolio selection/composition

decision) and portfolio decisions are

implemented by trading desks (the

portfolio implementation decision).

Valuation concepts and models

Here, we turn our attention to the

valuation process. This process

includes understanding the

company to be valued, forecasting

the company’s performance, and

selecting the appropriate valuation

model for a given valuation task.

The Valuation process

We have seen that the valuation

of a particular company is a task

within the context of the portfolio

management process. Each

individual valuation that an analyst

undertakes can be viewed as a

process with the following five steps:

(1) Understanding the business.

This involves evaluating

industry prospects, competitive

position, and corporate

strategies. Analysts use this

information together with

financial statement analysis to

forecast performance.

(2) F o r e c a s t i n g c o m p a n y

performance. Forecasts of

sales, earnings, and financial

position (proforma analysis)

are the immediate inputs to

estimating value.

(3) Selecting the appropriate

valuation model.

(4) Converting forecasts to a

valuation.

(5) Making the investment decision

(recommendation).

Our focus will be on the first three

steps. Because common stock

represents the ownership interest

in a company, analysts must

carefully research the company

before making a recommendation

about the company’s stock. An

in-depth understanding of the

business and an ability to forecast

the performance of a company help

determine the quality of an analyst’s

valuation efforts.

Market multiples model

Discounted cash flow model

Dividend valuation model

discounted at the

Cost of equity

Future expected dividends

Equity value

Present value of debt

Levered asset value

Unlevered asset value

Present value of tax savings

Cash flows from assets

Tax savings

Cost of debt

Unlevered cost of equity

Firm’s earnings, cash flows or book value

Corresponding market multiple

Corresponding market multiple

Firm’s earnings, cash flows or book value

discounted at the

discounted at the

discounted at the

multiplied by the

equals

less the

Adjusted present value model

Alternative equity valuation models



(a) Understanding the business

Understanding a company’s

economic and industry context and

management’s strategic responses

are the first tasks in understanding

that company. Because similar

economic and technological factors

typically affect all companies in

an industry. Industry knowledge

helps analysts understand the basic

characteristics of the markets served

by a company and the economics of

the company. An agricultural sector

analyst will know that fertilizers are

the second biggest expense for

agricultural firms behind labour

expenses. Using this knowledge,

the analyst may inquire about the

degree to which different agricultural

firms hedge the commodity price

risk inherent in grain/seed costs.

With such information in hand, the

analyst is better able to evaluate

risk and forecast future cash

flows. An analyst conducting an

industry analysis must also judge

management’s strategic choices

to better understand a company’s

prospects for success in competition

with other companies in the industry

or industries in which that company

operates. Analysts may focus on the

following questions:

(1) How attractive are the industries

in which the company operates,

in terms of offering prospects

for sustained profitability?

Inherent industry profitability

is one important factor in

determining a company’s

profitability. Analysts should

try to understand industry

structure the industry ’s

underlying economic and

technical characteristics and the

trends affecting that structure.

Analysts must also stay current

on facts and news concerning

all the industries in which the

company operates, including

the following:

• industry size and growth

over time,

• recent developments

( m a n a g e m e n t ,

technological, financial) in

the industry,

• overall supply and demand

balance,

• subsec tor strength/

softness in the demand–

supply balance, and

• q u a l i t a t i ve f a c t o r s ,

including the legal and

regulatory environment.

(2) What is the company’s relative

competitive position within

its industry? Among factors

to consider are the level and

trend of the company’s market

share in the markets in which it

operates.

(3) What is the company ’s

competitive strategy? Three

general corporate strategies

for achieving above-average

performances are:

• Cost leadership - being

the lowest cost producer

while offering products

comparable to those of

other companies, so that

products can be priced at or

near the industry average;

• Differentiation - offering

unique products or services

along some dimensions

that are widely valued by

buyers so that the company

can command premium

prices; and

Understanding the business

Forcasting the future

Selecting valuation

model

Converting forecasts to valuation

Applying valuation

model

VALUATION MODEL ADVANTAGES DISADVANTAGES

Price multiple model Easy to applyDo not take into consideration

the company growth rate

Discounted dividend model

Calculating the actual cash that the investor will receive in future

Can not apply to the firm that do not pay dividend or have

high dividend volatility

Free cash flow modelCan apply to firm that do not pay

dividend and has negative cash flowCan not apply to the firm that

has negative cash flow

Residual income model

Can apply to firm that do not pay dividend and has negative cas

Need to have indepth analysis on financial ststement



• Focus - seek ing a

competitive advantage

within a target segment

or segments of the

industry, based on either

cost leadership (cost

focus) or differentiation

(differentiation focus).

The analyst can assess

whether a company ’s

apparent strategy is logical

or faulty only in the context

of thorough knowledge of

the company’s industry or

industries.

(4) How well is the company

executing its strategy?

Competitive success requires

not only appropriate strategic

choices, but also competent

execution.

(5) One perspective on the above

issues often comes from

the companies themselves

in regulatory filings, which

analysts can compare with their

own independent research

(b) Forecasting company performance

The second step in the valuation

process is forecasting. Company

performance can be viewed from

two perspectives: the economic

environment in which the company

operates and the company’s own

financial characteristics.

(i) Economic forecasting

Industry analysis and competitive

analysis take place within the larger

context of macroeconomic analysis.

As an approach to forecasting,

moving from the international and

national macroeconomic forecasts

to industry forecasts and then

to individual company and asset

forecasts is known as a top-down

forecasting approach. For example,

starting with forecasts of the

level of macroeconomic activity,

an analyst might project overall

industry sales and the market share

of a company within the industry

to arrive at revenue forecasts for

the company. It is also possible

to aggregate individual company

forecasts of analysts (possibly arrived

at using various methodologies) into

industry forecasts, and finally into

macroeconomic forecasts; doing so

is called a bottom-up forecasting

approach.

A bottom-up forecasting approach is

subject to the problem of inconsistent

assumptions. For example, different

analysts may assume different

inflationary environments and this

may compromise the comparability

of resulting individual stock

valuations. In a top-down approach,

an organisation can ensure that

all analysts use the same inflation

assumption.

(ii) Financial forecasting

The analyst integrates the analysis of

industry prospects and competitive

and corporate strategy with financial

statement analysis to formulate

specific numerical forecasts of

such items as sales and earnings.

Analysts may consider qualitative

as well as quantitative factors in

financial forecasting and valuation.

For example, some analysts may

modify their overall valuation

judgments and recommendations

based on qualitative factors. These

may include the analyst’s viewpoint

on the business acumen and

integrity of management as well

as the transparency and quality of

a company’s accounting practices.

Although analysts may attempt to

reflect the expected direction of

such considerations in their financial

forecasts or to otherwise quantify

such factors, no formal valuation

expression can fully capture these

factors.

Macro economic analysis

Industry analysis

Analysis of asset


(To be continued in Issue No. 3, July-September 2015)

CONTACTS:TOWN CAMPUS

City Centre, EASM College, 4th Floor, Ansh Plaza, Biashara Street.

Cellphone: 0705004700 / 0729817954Email: [email protected]

DONHOLM CAMPUSEASM College, Solar World Building, Behind Naivas Supermarket, Manyanja Road next to

Getrudes Hospital.Cellphone: 0721480460

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CONTACTS:TOWN CAMPUS

City Centre, EASM College, 4th Floor, Ansh Plaza, Biashara Street.

Cellphone: 0705004700 / 0729817954Email: [email protected]

DONHOLM CAMPUSEASM College, Solar World Building, Behind Naivas Supermarket, Manyanja Road next to

Getrudes Hospital.Cellphone: 0721480460

KASNEB• Certified Public Accountant (CPA)• Certified Secretaries (CS FORMER CPS)• Certified Information Communication Technology (CICT)• Accounting Technicians Diploma (ATD)• Diploma in Information Communication Technology (DICT)• Diploma in Credit Management (DCM)• Certified Procurement and Supply Professional of Kenya

(CPSP-K)• Associate in Procurement and Supply Professional of Kenya

(APSP-K)

KNEC • Certificate in Business Management• Diploma in Business Administration • Diploma in Human Resource Management• Higher Diploma in Human Resource Management

ICM (INSTITUTE OF COMMERCIAL MANAGEMENT)• Purchasing & Supply Management• Diploma in Business Management• Advanced Diploma

COMPUTER SOCIETY OF KENYA (CSK)• Certificate in ICT • Diploma in ICT

EAST AFRICASCHOOL MANAGEMENTofS C H O O L O F E X C E L L E N C E

COMPUTER PACKAGES• Introduction to computers• Ms-dos• Ms-Windows• Ms-Word• Ms-Excel

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Total Quality Management

(TQM) is a method by which

management and employees

can become involved in the

continuous improvement of the

production of goods and services.

It is a combination of quality

and management tools aimed at

increasing business and reducing

losses due to wasteful practices.

Some of the companies who

have implemented TQM include

Ford Motor Company, Phillips

Semiconductor, SGL Carbon,

Motorola and Toyota Motor

Company.

TQM defined

TQM is a management philosophy

that seeks to integrate all

organisational functions (marketing,

finance, design, engineering and

production, customer service and

so on) to focus on meeting customer

needs and organisational objectives.

TQM views an organisation as a

collection of processes. It maintains

that organisations must strive

to continuously improve these

processes by incorporating the

knowledge and experiences of

workers. The simple objective of TQM

is “Do the right things, right the first

time, every time.” TQM is infinitely

variable and adaptable. Although

originally applied to manufacturing

operations, and for a number of

years only used in that area, TQM

is now becoming recognised as a

generic management tool, just as

applicable in service and public

sector organisations. There are a

number of evolutionary strands, with

different sectors creating their own

versions from the common ancestor.

IMPLEMENTATION OF TOTAL QUALITY MANAGEMENT

Total Quality Management is a management approach that originated in the 1950s

and has steadily become more popular since the early 1980s. Total Quality is a

description of the culture, attitude and organisation of a company that strives to

provide customers with products and services that satisfy their needs. The culture

requires quality in all aspects of the company’s operations, with processes being

done right the first time and defects and waste eradicated from operations.

Kelle

n Ki

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anag

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sulta

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Time

Qua

lity

impr

ovem

ent


TQM is the foundation for activities,

which include:

• Commitment by senior

management and all

employees

• Meeting customer

requirements

• Reducing development cycle

times

• Just in time/demand flow

manufacturing

• Improvement teams

• Reducing product and service

costs

• Systems to facilitate

improvement

• Line management ownership

• Employee involvement and

empowerment

• Recognition and celebration

• Challenging quantified goals

and benchmarking

• Focus on processes /

improvement plans

• Specific incorporation in

strategic planning

This shows that TQM must be

practiced in all activities, by all

personnel in manufacturing,

marketing, engineering, R&D, sales,

purchasing, HR, and so on.

Principles of TQM

The key principles of TQM are as

follows:

(a) Management commitment

• Plan (drive, direct)

• Do (deploy, support,

participate)

• Check (review)

• Act (recognize, communicate,

revise)

(b) Employee empowerment

• Training

• Suggestion scheme

• Measurement and recognition

• Excellence teams

(c) Fact based decision making

• SPC (statistical process

control)

• DOE, FMEA

• The 7 statistical tools

• TOPS (Ford 8D –

team-oriented problem

solving)

(d) Customer focus

• Supplier partnership

• Service relationship with

internal customers

• No compromise on quality

• Customer driven standards

(e) Continuous improvement

• Systematic measurement and

focus on CONQ

6 Cs of TQM

Continuous Improvement

Culture

Cooperation

Committment

Customer focus

Control

Buildingblocks for an organisation’ssuccess

Total quality management


There are three major mechanisms

of prevention:

(1) Preventing mistakes (defects)

from occurring (mistake-

proofing or poka-yoke).

(2) Where mistakes can’t be

absolutely prevented, detecting

them early to prevent them

from being passed down the

value-added chain (inspection

at source or by the next

operation).

(3) Where mistakes recur, stopping

production until the process

is corrected, to prevent the

production of more defects

(stop in time).

Implementation principles and processes

A preliminary step in TQM

implementation is to assess the

organisation’s current reality.

Relevant preconditions have to do

with the organisation’s history, its

current needs, precipitating events

• Excellence teams

• Cross-functional process management

• Attaining, maintaining, improving standards.

The concept of continuous improvement by TQM

TQM is mainly concerned with continuous improvement in all work, from high

level strategic planning and decision-making, to detailed execution of work

elements on the shop floor. It stems from the belief that mistakes can be avoided

and defects can be prevented. It leads to continuously improving results, in

all aspects of work, as a result of continuously improving capabilities, people,

processes, technology and machine capabilities.

Continuous improvement must

deal not only with improving

results but more importantly

with improving capabilities to

produce better results in the

future. The five major areas of

focus for capability improvement

are demand generation, supply

g e n e rat i o n , te c h n o l o g y,

operations and people capability.

A central principle of TQM is that

mistakes may be made by people,

but most of them are caused, or at

least permitted, by faulty systems

and processes. This means that

the root cause of such mistakes

can be identified and eliminated.

Thus repetition can be prevented

by changing the process.

1

3

5

7

2

4

6

8

Kaizen mindset

Quality control circles

Discipline in the workplace

Cooperative labour-management relations

Customer orientation

Suggestion system

Small group activities

TOTAL QUALITY MANAGEMENT

Continuous improvement culture8 KEY ELEMENTS



leading to TQM and the existing

employee quality of working life. If

the current reality does not include

important preconditions, TQM

implementation should be delayed

until the organisation is in a state in

which TQM is likely to succeed.

If an organisation has a track record

of effective responsiveness to the

environment and if it has been

able to successfully change the

way it operates when needed, TQM

will be easier to implement. If an

organisation has been historically

reactive and has no skill at improving

its operating systems, there will be

both employee skepticism and a

lack of skilled change agents. If this

condition prevails, a comprehensive

program of management and

leadership development may be

instituted.

A management audit is a good

assessment tool to identify current

levels of organisational functioning

and areas in need of change. An

organisation should be basically

healthy before beginning TQM. If

it has significant problems such

as a very unstable funding base,

weak administrative systems,

lack of managerial skill or poor

employee morale, TQM would not

be appropriate.

However, a certain level of stress is

probably desirable to initiate TQM.

People need to feel the need for a

change. Kanter (1983) addresses this

phenomenon by describing building

blocks which are present in effective

organisational change. These forces

include departures from tradition, a

crisis or galvanizing event, strategic

decisions, individual “prime movers,”

and action vehicles. Departures

from tradition are activities, usually

at lower levels of the organisation,

which occur when entrepreneurs

move outside the normal ways of

operating to solve a problem. A crisis,

if it is not too disabling, can also help

create a sense of urgency which can

mobilise people to act. In the case of

TQM, this may be a funding cut or

threat, or demands from consumers

or other stakeholders for improved

quality of service. After a crisis, a

leader may intervene strategically

by articulating a new vision of the

future to help the organisation deal

with it. A plan to implement TQM

may be such a strategic decision.

Such a leader may then become

a prime mover, who takes charge

in championing the new idea and

showing others how it will help them

get where they want to go. Finally,

action vehicles are needed and

mechanisms or structures to enable

the change to occur and become

institutionalised.

Steps in managing the transition

Beckhard and Pritchard (1992) have

outlined the basic steps in managing

a transition to a new system such as

TQM.

Organisational profile: Envoronment, relationships and challenges

Strategic planning Workforce focus

Process managementCustomer focus

Leadership1

2 5

63

4

7Results

Measurement, analysis and knowledge management



The steps include:

• identifying tasks to be done

• creating necessary management

structures

• developing strategies for building

commitment

• designing mechanisms to

communicate the change and

• assigning resources.

Task identification would include a study of

present conditions (assessing current reality,

as described above); assessing readiness,

such as through a force field analysis;

creating a model of the desired state, in this

case, implementation of TQM; announcing

the change goals to the organisation; and

assigning responsibilities and resources. This

final step would include securing outside

consultation and training and assigning

someone within the organisation to oversee

the effort. This should be a responsibility

of top management. In fact, the next

step, designing transition management

structures, is also a responsibility of top

management. Cohen and Brand (1993) and

Hyde (1992) assert that management must

be heavily involved as leaders rather than

relying on a separate staff person or function

to shepherd the effort. An organisation-wide

steering committee to oversee the effort may

be appropriate. Developing commitment

strategies was discussed above in the

sections on resistance and on visionary

leadership.

To communicate the change, mechanisms

beyond existing processes will need to

be developed. Special all-staff meetings

attended by executives, sometimes designed

as input or dialog sessions, may be used to

kick off the process, and TQM newsletters

may be an effective ongoing communication

tool to keep employees aware of activities

and accomplishments.

Management of resources for the change

effort is important with TQM because outside

consultants will almost always be

required. Choose consultants based

on their prior relevant experience and

their commitment to adapting the

process to fit unique organisational

needs. While consultants will be

invaluable with initial training

of staff and TQM system design,

employees (management and

others) should be actively involved

in TQM implementation, perhaps

after receiving training in change

management which they can

then pass on to other employees.

A collaborative relationship with

consultants and clear role definitions

and specification of activities must

be established.

I n s u m m a r y, f i r s t a s s e s s

preconditions and the current state

of the organisation to make sure

the need for change is clear and

that TQM is an appropriate

strategy. Leadership styles

and organisational culture

must be congruent with

TQM. If they are not, this

should be worked on or

TQM implementation should

be avoided or delayed until

favorable conditions exist.

Remember that this will be a

difficult, comprehensive and

long-term process. Leaders

will need to maintain their

commitment, keep the

process visible, provide

necessary support and hold

people accountable for results. Use input

from stakeholder (clients, referring agencies,

funding sources and so on) as possible; and,

of course, maximise employee involvement

in design of the system.

Always keep in mind that TQM should be

purpose driven. Be clear on the organisation’s

vision for the future and stay focused

on it. TQM can be a powerful technique

for unleashing employee creativity and

potential, reducing bureaucracy and costs

and improving service to clients and the

community.

Conclusion

TQM encourages participation amongst

shop floor workers and managers. There is

no single theoretical formalisation of total

quality, but Deming, Juran and Ishikawa

provide the core assumptions, as a “…

discipline and philosophy of management

which institutionalises planned and

continuous… improvement … and assumes

that quality is the outcome of all activities

that take place within an organisation;

that all functions and all employees have

to participate in the improvement process;

that organisations need both quality systems

and a quality culture.”

TOTAL QUALITY MANAGEMENT AND QUALITY MEASURES

• Quality is a firm-wide process• Quality is defined by the customer• Quality requires organisational changes• Quality is designed into the product



PUBLIC FINANCEGovernment revenue and the role of public expenditure

all the money spent by the government in

provision of different services and goods

to the nation. Public expenditure has risen

significantly in recent years due to the

following reasons:

(1) Rapid increase of the country’s

population.

(2) Increase in price levels of goods and

services.

(3) Increase in demand for social services.

(4) Development programmes such as CDF.

(a) Principles of public expenditure

Government expenditure is aimed at

satisfying the common needs of all citizens.

To achieve this end, the following principles

must be applied.

(1) Maximum social benefit: The

government expenditure must be

incurred in such a way that people

should get maximum possible benefit

from this expenditure.

(2) Economy: Wastage must be

discouraged in public expenditure.

(3) Elasticicity: It must be possible to

increase or decrease public expenditure

Introduction

Public Finance is a section

of finance which deals with

public expenditure and

revenue. The government involves

itself in the following public service

provision:

(1) Protective services: The

government is responsible for

maintaining peace and order

in a country and in defending

the country against external

aggression. For this purpose,

the government maintains

police and armed forces.

(2) Administrative services: The

government is responsible

for administration of the

country. Various administrative

departments are established

by the government for this

purpose.

(3) S o c i a l s e r v i c e s : T h e

government provides social

services like education, health,

housing and so on. These

services are vital for the welfare

of the society and directly

improve the standard of living

of the people.

(4) Development services: The

development of different

sectors of the economy require

state help to progress rapidly

for the benefit of the entire

citizenry. Such sectors include

agriculture, transport, health,

communications and energy

among others.

Public finance function

The main divisions of public finance

are:

(i) Public expenditure

(ii) Public revenue

(iii) Public borrowing (debt)

(iv) The government budget

(i) Public expenditure

Public expenditure is the sum of

Isaac

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Mai

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rer in

finan

cial m

anag

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stitu

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Prof

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Thika


according to the circumstances.

During peace time, public expenditure

should be focused on development

programmes. If a country is at war, more

money should be allocated to defence,

security and peace initiatives.

(4) Sanc tion (Approval): Publ ic

expenditure must be approved

(sanctioned) by a determinate authority.

In democratic countries, this authority

is the parliament.

(5) Sound financial administration:

It means public accounts must

be maintained accurately and

systematically. They must be regularly

audited to prevent fraud and genuine

errors.

(b)The role of public expenditure

The roles of public expenditure can be

analysed as follows:

(1) Production: Public expenditure

increases the production of goods

and services. By developing public

infrastructure, for instance, the

government encourages development

of the productive capacity of a country.

(2) Maintaining peace and security:

People invest more in a safe and

secure environment. Due to greater

investment, the production of different

goods and services increases.

(3) Distribution of income:

Public expenditure is helpful

in ensuring fair distribution of

income. The government taxes

the high income earners more

and this revenue is spent in

provision of free services to the

poor.

(4) E c o n o m i c s t a b i l i t y :

When inflation rises, public

expenditure is increased to

ensure economic equilibrium.

(ii) Public revenue

Public revenue (government

revenue) refers to the income

accrued by the state from different

sources. Broadly, the government

gets revenue from three main

sources: tax revenue, non-tax

revenue and grants. Specifically,

these sources include:

(1) Ta xe s : A c o m p u l s o r y

contribution imposed by a

public authority for expenses

incurred in the common interest

of all, without reference to

special benefits conferred. In

other words, it is paid without

getting any direct service from

the government.

(2) Fees: Amounts charged by the

government for direct services

rendered by the government,

for example road license fee,

vehicle transfer fees and so on.

(3) Fines and penalties: Amounts

obtained by charging those

who break the laws of the land.

(4) Prices: Amounts received by

the government for commercial

services rendered, for example

railway fare, stamp duty and

telephone charges.

(5) Special assessments: Amounts

which are charged for specific

purposes. For example, if the

government charges residents

of a particular area for the

establishment of a secondary

school in their area, then that

will be a special assessment.

(6) State property: Amounts

obtained from charges on use

of governement property such

as forests, mines, national parks,

buildings and so on.

Government tax

Tax is also defined as a compulsory

contribution of wealth of a person

or body of persons for the services

Sources of public revenue

Taxes

Fees

Fines and penalties

Special assessments

Price

Gifts and donations

Grants in aid

Education

Health

Social welfare

Housing

Security

Environment

Infrastructure

Community

External affairs

Support

Public finance


of public powers. It means taxes are

a portion of the produce of the land

and labour of a country placed at the

disposal of the Government.

Characteristics of tax

(i) Tax is compulsory. It is

imposed by the government

on the people residing in the

country.

(ii) Tax benefits all citizens.

Payment made by the

taxpayers is used by the

government for the benefit

of all the citizens.

(iii) Tax is not levied in return for

any specific service rendered

by the government to the

taxpayer, that is, an individual

cannot ask for any specific

benefit from the state in

return for the tax paid by

him/her.

The purpose of taxation

(i) To achieve the government’s

economic objectives

(ii) To achieve the government’s

social objectives

(iii) F i n a n c e g o v e r n m e n t

spending

(iv) To service internal and

external loans.

(v) To pay civil servants.

Types of taxes

(i) Income tax: A tax imposed on

the incomes of individuals.

(ii) Corporation tax: A tax

imposed on profits of

companies

(iii) Sales tax: A tax imposed on

the sale of commodities

(iv) Excise tax: A tax imposed

on the production of

commodities.

(v) Customs duty: A tax imposed

on the import or export of

commodities.

(vi) Value added tax: A tax levied

by the government on the

value added to a good or

service.

Principles of taxation

(1) Equality: A tax must be imposed

in such a way that the incidence

of tax must be proportionate

to the incomes of different

individuals. The high income

earners must pay higher taxes

relative to the low income

earners. The equality in sacrifice

is important for the welfare of

the society.

(2) Economical: It means the cost

of collecting a tax must be as

low as possible. The cost of

collecting or administering a tax

should not exceed the revenue

gained.

(3) Convenience: The tax must be

imposed in such a way that

the method of tax payment is

convenient for the taxpayer. Tax

on the income of employees is

deducted on monthly basis

but tax on business profits is

payable on annual basis.

(4) Certainty: It means the amount

of tax and time and method of

payment should be certain.

There must be no confusion

in this regard, that is, people

should be certain about how

the tax works and how much

has to be paid as well as when

it must be paid.

(5) Productivity: Every tax imposed

should give greater income to

the government. There is no

use to impose any tax, if it does

not bring significant amounts

to the exchequer (government

treasury).

(6) Elasticity: It must be possible to

increase or decrease the taxes

according to the economic

situation of the country.

During inflation, taxes must be

increased and vise versa.

(7) Simplicity: It means the tax

system must be simple enough

for an ordinary person to

Direct tax

Indirect tax

Grants in aid

Income tax

Wealth tax

Service tax

Value added tax

Excise duty

Customs duty

Public finance


understand its computation

so that they can make prior

arrangements.

(8) Diversity: There must be

different type of taxes, so that

the burden of these taxes is on

different groups of the society.

(9) Impartial: Two citizens with

equal income and size of family,

should be pay the same tax.

(10) Friendly: It should not be a

disincentive to hard work and

therefore should not penalize

people for working hard.

(11) Consistency: It should be

consistent with government

policy. Although the structure

should not change frequently,

individual taxes must be

constantly reviewed to see how

they could be used to promote

government policy.

Proportional and progressive tax system

Proportional tax system is that

system under which tax is imposed

at the same rate on all incomes. It is

simpler to apply. But proportional

tax system does not fulfill the

requirements of productivity,

equality and economy.

Progressive tax system is that system

under which the rate of tax increases

with the increase in income. It fulfills

the requirements of the principles

of productivity, economy and

equality. But this system discourages

investment and savings activities.

Direct and indirect taxation

Taxes tend to fall into two categories:

direct and indirect.

Direct taxation is a tax levied

directly on an individual’s income,

for example income tax, whereas

indirect taxation is levied on

consumer’s expenditure for example,

excise duty, customs duty and VAT.

Indirect tax is the tax under which

the impact of the tax is on one

person and incidence is on the other

person, for example excised duty,

custom duty, sales tax and so on.

By impact of tax, we mean the person

or entity on whom tax is imposed.

Incidence of tax means the one, who

has to bear the burden of the tax or

ultimately has to pay the tax..

Merits of direct tax

(1) Progressive – Direct tax can be

imposed at a higher rate on

rich persons and at a lower rate

on the poor person. It helps

achieve equality in sacrifice.

(2) Productive – direct tax is

more productive because it

gives greater income to the

government.

(3) Economical – This tax is

economical because the cost

of collecting it is comparatively

low and easy to do.

(4) Sense of citizenship – When

an individual pays taxes to the

Government, they expect these

taxes to be spent for welfare

purposes. If these amounts

are not spent for the benefit of

the majority of the population

then the taxpayers can raise an

objection.

Demerits of direct tax

(1) Inconvenience – These

taxes are deducted from an

individual’s pay and as a result,

the individuals feel greatly

inconvenienced while paying

these taxes.

(2) Evasion – Individuals can avoid

the payment of a direct tax by

showing less income. In other

words, this type of taxation

encourages tax evasion. To

avoid paying tax, certain

individuals may use professional

accountants to advise them on

how to legally avoid paying a

high amount of tax.

(3) No choice – There is no element

of choice about paying the tax,

it is unavoidable.

(4) Demoralising – Direct tax may

be a disincentive to hard work.

(5) Discourages saving – Direct

taxation discourages savings

because after paying tax,

individuals and companies have

Public finance


less income available to save or

reinvest.

Demerits of indirect tax

(1) Convenient to pay an indirect

tax. These taxes are charged

together with the price of goods

sold. The individuals pay these

taxes without knowing that

they are paying any tax.

(2) Uncertainty – When these taxes

are imposed, the amount to be

collected by the Government is

not certain from the onset.

(3) Uneconomical – The cost of

collecting an indirect tax is

too high comparatively. So it is

uneconomical.

(4) Increases inflation – Indirect

tax may contribute to inflation.

The imposition of an indirect tax

on an item will increase its price

which is, in itself, inflationary.

This may have an effect on other

areas as workers demand higher

wages due to high cost of living.

Tax incidence of a commodity

Commodity tax is that tax imposed

on any commodity bought. It is also

called excise duty. When imposed,

this tax is supposed to impact the

manufacturer who has to pay the

tax to the government. However,

manufacturers always pass on the

burden of tax to the consumers by

raising prices.

If demand for the commodity is

inelastic, the total burden of the

tax will be borne by the consumers.

However, if the demand is

elastic, then price increment of

the commodity is followed by a

decrease in quantity demand and

hence the tax burden is shifted to

the manufacturer as the market may

not accept price increments.

However, if demand and supply are

both elastic, the tax incidence of

the commodity is borne partly by

the manufacturer and partly by the

consumer as shown below.

Initially, the equilibrium is at point

E with Qo being supplied at price

PO. Following an imposition of a

commodity tax, the supply curve

shifts upwards to S1 resulting in a

new equilibrium level El. The tax has

an effect of increasing prices to P1

and reducing quantity supplied to

Q1. The incidence of the tax borne by

the consumer is E1M. The incidence

of the tax borne by the supplier is

MR. The total tax incidence is E1R.

(iii) Public borrowing (National debt)

Public borrowing means borrowing

money from the public to finance

government expenditure. It is

also known as national debt. The

government borrows money to

meet its budget deficits. Sometimes,

public revenue is not sufficient for

development and social welfare

purposes. In such cases, the

government borrows money from

the public. Public debts may be of

the following kinds:

(1) Internal and external – The

government can borrow money

from the individuals of the

country. This is called internal

debt. External public debts

are those amounts which are

borrowed by the government

from other countries or external

institutions like World Bank.

(2) Productive and unproductive

– Productive national debts

are those which are obtained

for development projects

like irrigation and industrial

projects. Unproductive public

debts are those which are spent

for unproductive purposes like

family planning, education

and health schemes. These are

known as unproductive debts

because these schemes do not

result in increase in production

directly.

(3) Short term debts and long term

debts – Public debt may be for

a short period, for example

treasury bills or it may be for a

long period, for example a loan

taken for twenty or thirty years.

Continued on page 42

The effect on output is the same whether the tax is levied on the consumer or the producer

Q1

PO

Price

Tax levied on producer

Tax levied on consumer

or

S

TPC

D1

D1

S1

Qo

PP

D

D

S

Public finance

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SCHOOL OF TOURISM &HOSPITALITY MANAGEMENT

SCHOOL OF INFORMATION COMMUNICATION TECHNOLOGY, INFORMATION SCIENCE AND LEGAL STUDIES

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Methods of public debt redemption

The following methods can be

adopted to repay public debts:-

(1) Use of surplus budget – If the

budget of the government has a

surplus during a particular year

then this surplus can be used to

repay public debts.

(2) Sinking fund – The government

can develop a sinking fund

into which a specific amount

is deposited every year. After

some years, this fund is used to

repay public debt.

(3) Capital levy – Capital levy is a

special tax which is imposed by

the government on people with

high income for purposes of

specially repaying public debt.

(4) Conversion – The government

can get a new loan at a low

rate of interest. This loan can be

used to repay any previous loan

carrying a high rate of interest.

This method is helpful to reduce

the burden of interest.

(5) Deficit financing – Deficit

financing means the issuing of

new notes or borrowing from

the Central Bank. This method

is used by most of the countries

for development purposes. If

there is shortage of funds, then

the government can borrow

money from the Central Bank

and this money is used for

completing new development

projects. As a result, production

of goods and services increases

and this excessive issue of

currency notes becomes real

increase in output. Deficit

financing method can be used

when other sources of internal

and external finance are not

sufficient. It must be adopted

within certain limits because

the excessive use of this method

can create inflation.

(6) Repudiation – It means to refuse

to pay any debt. It lies within

the power of the government

to repudiate its obligation.

Repudiation would make it

extremely difficult for the

government to borrow in future.

(iv) The government budget

Budget is a financial plan or a

statement covering revenue

receipt and expenditure outlays. At

the national level, it is a statement

which consists of the revenue

and expenditure estimates of the

government for one particular year.

If government expenditure is

greater than revenue, then it is

known as “deficit budget”. Similarly,

if government revenue is greater

than government expenditure, it is

known as “surplus budget”. When

government expenditure and

revenue are equal, it is known as

“Balanced budget”.

Budget may be of two kinds:

a) Capital budget which relates

to development projects.

b) Revenue budget which

relates to normal income and

expenditure items.

In revenue budget, the main sources

of public revenue are:

(1) Custom and excise duty

(2) Income and corporation tax

(3) Income from state property and

fines.

The main expenditure heads of

revenue budget are:

(1) Defense

(2) Administration

(3) Education

(4) Health

(5) Collection of taxes.

The main sources of income of

capital budget are loans and grants

obtained by government. The main

expenditure heads of capital budget

are:

(1) Development projects

(2) Establishment of new industrial

and agricultural projects.

The budget is prepared on an

annual basis and it is presented by

the Cabinet Secretary (CS), Finance,

before the parliament for approval.

The CS prepares the budgetary

proposal by way of changes in

Continued from page 39

Public finance


taxation and other related areas such

as government spending.

These proposals are then debated

upon and approved by the

legislatures who then authorise the

government to raise revenue and

incur debt in order to achieve their

goals of economic, political, social,

legal and administrative functions.

Currently there are nine key

budgetary sections in Kenya:

(1) Ag r i c u l t u re a n d r u r a l

development

(2) Health

(3) Education

(4) Physical infrastructure

(5) Public administration

(6) Public safety, law and order

(7) General economic services

(8) National security

(9) Information and communication

technology

Budget execution

• After the budget speech,

Parliament debates each

proposal.

• Appropriation Bill approval

allows the government to

draw resources from the

consolidated fund for recurrent

and development expenditure.

• The treasury issues exchequer

to the line ministries to enable

them spend.

• When budget is approved

by the parliament, it is then

enforced.

Some of the weaknesses of budget process

• Macroeconomic framework

may not explicitly take care

of all constraints during the

process.

• Projections of the ensuing years

may not be deeply analysed.

• Public expenditure reviews may

not be exhaustive.

• Prioritisations of the programs

may not be well represented.

• Appropriation in aid may not be

well accounted for.

• Poor accounting of the fiscal

expenditures and extra

budgetary funds may arise.

Budget as an instrument of planning

The role of the budget as an

instrument of development planning

has increased significantly in recent

years. These include:

(1) The budget in a planned

economy is a budget of

national resources and output

capacity. It does not confine

itself to review of public sector

programmes only. The budget

in the framework of economic

planning is an overall regulator

of all the determinants of

economic growth. Through

the budget, the government

can encourage or discourage

private expenditure.

(2) The government budget plays a

fundamental role in increasing

the rate of capital accumulation

and economic growth.

(3) With the increased responsibility

of government for adequate

spending in a planned economy,

the theory of sound finance and

balanced budget is delegated.

0 1

2

3

4

5

6

7

8

Public financial management cycle

Budget execution

Mgmt of budget authorisations

Commitment of funds

Payments and receipts mgmt

Payroll calcs HR mgmt

Budget preparation

Cash management

Audit and evaluation

Policy development and review

Procurement/ purchasing

Asset/inventory mgmt

Debt and aid management

Budget review & fiscal rep.

Public finance


The above facts indicate that the

budget is an important instrument

in the hands of the government

to achieve the objectives of fiscal

policy.

Budgetary policy

Budgetary policies are measures

designed to achieve clearly

defined budgetary objectives.

Budgets are annual plans designed

by government to achieve the

economic objectives of:

a) Price stability

b) Capital accumulation

c) Economic growth

d) Equitable distribution of

income

e) Raising government revenue

for provision of government

services.

The budgetary policies used by

governments largely comprise of:

a) Fiscal instruments

b) Monetary instruments

Although Budgetary Policies are

separately designed to answer

particular needs, they are closely

related to both monetary and fiscal

policies and utilise both monetary

and fiscal instruments to achieve the

budgetary objectives.

Fiscal policy

Keynes defines fiscal policy as that

policy which uses public finance as a

balancing factor in the development

of the economy.

However, a more broad definition of

fiscal policy is that it is the action by

the government to spend or collect

money in from of taxes with the aim

of influencing the level of economic

activities. Fiscal policy therefore

involves a component of public debt

management.

Objectives fiscal policy

The main objectives of fiscal policy

are to:

• Achieve a desirable price level

(price stability)

• Achieve desirable consumption

level.

• Raise employment level

• Achieve fair distribution of

national income.

• Achieve economic stability

• Increase the level of economic

growth.

Tools or instruments of fiscal policy

The government may use fiscal

policy to intervene in the following

ways:

• By spending more money and

financing those expenditures

through borrowing (public

borrowing)

• By collecting more taxes

without increasing public

expenditure (public revenue).

• By collecting more taxes with

the aim of increasing spending

(public expenditure).

Therefore, from the above, tools or

instruments of fiscal policy are:

• Public borrowing (public debt)

• Public revenue (taxation) and

• Public expenditure (public

spending)

Accountability

Public borrowings

Expenditure of funds through the

national budget

PUBLIC FINANCE

CYCLE

Formulation of fiscal policy

Generation of revenue from taxation and other

sources

A process

Public finance


Having spent more than two hours on the queue, I was next to be served.

What a relief! My body felt weak. I had been woken up very early so as to

secure the earliest public service vehicle to Nairobi. With me was a map

to help me locate KASNEB offices in Upper hill. My mother had given it to me

the previous night. At the back of the paper were some ‘Don’t Dos’; Don’t ask

for direction, follow the map; don’t talk to anyone; secure a seat near the bus

conductor for he is the only one you can talk to…read some of the rules. Being

an obedient girl fresh from high school, I followed rules to the letter.

“Next”. The lady at the counter called out. I walked swiftly toward the counter

and after exchanging formal greetings, she asked for my documents. “Naweza

kusajiliwa kufanya ISA?” I asked her. (Can I be registered to do ISA?) Smiling, she

replied with a yes. She fed all the necessary information in the computer infront

of her and handed me my registration number. I left the offices happy but unsure

of how to find my way back home as I had misplaced the map. That is the day my

long journey with KASNEB started. They say a journey of a thousand miles starts

with a single step. Some would tell you that their most valuable journey is when

they walked down the aisle, traveled to a game reserve or traveled abroad, but

my most valuable journey was with KASNEB.

I was registered to do ISA (Investment and Securities Analyst), not because I knew

what it entailed then, but because the name itself looked stylish. However, I came

to love what I learnt in class and am still applying the same in my investments

today.

MY MOST VALUABLE

Kenya Accountants and Secretaries National Examinations Board (KASNEB) is an examining body that offers high quality exams in accounting and secretarial profession. It is also mandated to the development of syllabus and conduct of professional and technical exams. It is well known in Kenya and beyond.

From the time I registered for my first exam to the present, KASNEB has undergone tremendous transformation in its modes of operation to the benefit of current and future students. Below are some highlights of what I have personally experienced.

In terms of registration, long

queues were the norm at KASNEB

offices whenever students came to

register, book for exams and apply

for exemptions or to pay for the

above. I would wake up very early,

take a breakfast heavy enough to last

me the whole day and try to reach

their offices as early as possible.

Because of the long queues, it was

not unusual for some to give up and

leave.

Currently, things have changed. All

processes that would have required

me to physically go to KASNEB offices

can now be done at the comfort of

one’s desk or a cyber café. Forms

required for various exam purposes

can now be downloaded from the

KASNEB website while payments can

be made through a number of banks

which have a wide branch network

throughout Kenya.

During my last semester, I used the

bank to pay for my exam. It took

me less than half an hour for the

transaction to go through. I was

surprised!

Regi

na N

. wan

jiru,

CSIA

grad

uate

and C

PA st

uden

t

JOURNEY


In order for examinations conducted

by KASNEB to remain relevant, there

have been several syllabus reviews

aimed at aligning the syllabuses to

the ever changing market dynamics.

I believe that they don’t just wake

up one day and say let’s review

the syllabus, no. There is a team of

experts, from every sector of the

economy, who sit down, bring their

ideas together and come up with a

draft that is revised until fully refined.

When I chose to do ISA then, it was

mainly because one could do it

within a shorter period of time. It

only had three sections, each with

five topics. Therefore, a period of

one and a half year was enough for

me to complete it and join in nation

building.

I sat for Section 1 exams in June

2009 soon after the syllabus was

reviewed. ISA was renamed to

Certified Securities and Investment

Analysts (CSIA) and its sections were

increased from three, each section

having three topics. That meant a

longer duration and an increase in

total subjects.

The review was in line with the Kenya

Vision 2030. It covered instruments

like derivatives, options, forwards

and futures which were not in the

previous syllabus. This has equipped

students in making comparative

analysis of securities performance

in the Kenyan financial and stock

markets.

Change is not man’s best friend.

It’s most often faced with stiff

resistance. It took me two months

to decide whether I was ready to

continue with this journey or not.

Having planned to travel for only

one and a half years, now three years

needed rearrangement of mission,

vision and core values of my life. This

called for a paradigm shift. Thanks

to God because I sailed through the

course, did the exams and waited

for the results.

The dark brown envelope bore my

name. I was among the last people

to receive the results. There was a

belief that if you ever received your

results after a good number of your

colleagues have, chances are that

you have a REFERRAL or a FAIL. I

opened the letter slowly and quietly.

My parents eyes were all on me as

they waited in bated breadth for me

to break the news. “I have one more

chance to redo this paper” I broke

the sad news. You wouldn’t want to

experience the lecture that followed.

I had done that particular paper

more than three times before,

unsuccessfully. I was so ashamed.

How could I have failed? I was so sure

I answered almost all the questions

correctly. What went wrong? Do I

apply for a re-mark? All manner of

questions kept on running in my

mind.

KASNEB examinations are not for

the lazy and faint hearted. One

needs to study hard and smart. If

you fall below the cut-off points,

you have to repeat the same paper

again and again until they are fully

satisfied you are ready to face the job

market. Just as gold passes through

fire for purification so do students

who undertake courses examined

by KASNEB. The end product are

professionals who are globally

competitive.

KASNEB has in the recent past

created forums whereby students

could interact with each other and

air their views. Being an open forum,

questions are raised and tackled

while still hot. Thanks to them, I

was the first lady in my small village

to step foot in most of the famous

hotels in Nairobi. That comes with a

lot of respect and prestige.

The Institute of Certified Investment

and Financial Analysts (ICIFA)

previously known as The Institute of

Certified Securities and Investment

Analysts (ICSIA) is the new kid on the

block. Its membership comprises

graduates of CSIA examination

(rebranded to CIFA). It is the

regional resource and advocacy

business member organisation for

professionals in the Finance and

Investment Profession, providing a

region-wide network and promoting

the role of the profession in the fields

of securities analysis, investment,

pension funds, asset management,

corporate finance, financial

planning and financial application

development. Its impact will be felt in

the advancement of money markets,

real estate investments, pension

funds management, investment

securities analysis and investment

banking industry, insurance

industry and other industries in the

investment sector.

Students too have their forums

where they discuss issues affecting

them at the college level.

Issues pertaining to exams, results

and syllabus coverage are well

tackled. These forums also act as

the ground to introducing students

to the institute once they graduate.

With KASNEB having gone online,

all one needs is to create an

account with them. Having an

account enables one to download

examination timetables and check

their results anytime after release.

Previously, it would take one almost

Experience


two and a half months to get to know

their fate…read results. Results are

now timely and are digitised.

KASNEB through its Institutes is

seeking to realise its stated vision

of positioning itself as a globally

recognised professional body.

It has in the recent past sought

to partner with internationally

recognised institutes to facilitate

global recognition. This will

definitely enhance the goodwill and

recognition of KASNEB graduates

worldwide.

The Institute of Certified Public

Accountants joined hands with the Institute of Chartered Accountants of England and Wales (ICAEW) in signing a Memorandum of Understanding that will facilitate

recognition of CPA brand within

the United Kingdom and the wider

network already created by ICAEW.

This translates to a wider job market.

With this kind of collaboration,

Kenyan professional accountants can

obtain membership in the ICAEW

and vice versa.

The Institute of Certified Investment

and Financial Analysts (ICIFA) has

also partnered with the Association of Certified International Investment Analysts (ACIIA) based in Switzerland

and the Association of Professional Societies in East Africa (APSEA).

KASNEB is also well known in

Uganda, Tanzania and Rwanda. It has

also extended its wings to Cameroon

and welcomed some of the students

studying Finance and Investments

into our beautiful nation to better

their lives as well as their country’s

economy through education.

This will bring about free flow of

labour in Africa and in the world

at large. Competition will also

be evident as KASNEB continues

to address new challenges thus

enhancing their service delivery and

quality examinations.

It was thirty minutes after the exam

papers were placed on my desk.

There was no question that I could

have answered half way. Not a single

one. Everyone else was busy writing

but I had nothing in my mind. I

had read for six months and my

intelligence was to be tested with

only five questions in a time of only

three hours.

I recollected myself and decided

to leave not a single question

unanswered. I applied what I had

previously and within one hour or

so I left the exam room a satisfied

lady. I did my best.

In l i fe, I have embraced

open-mindness in the sense that

no situation can be able to bring

me down, and if it does I will have

tried severally.

I appeal to KASNEB to set up more

offices in major towns in the country

so as to be more accessible. KASNEB

can, for instance, offer its services

through Huduma Centres in order

to reach more young people.

Another area of concern has been the delay in issuance of certificates. This needs to be hastened up.

Currently, I am an accountant and I am proud to be associated with KASNEB. I use the knowledge acquired in CSIA to make informed investment decisions. I look forward to the introduction of derivatives such as futures, forwards, options

and swaps and the modernisation

of the financial markets which will

see Kenya become a financial hub

in the East and Central Africa region.

I don’t regret the day I embarked

on this journey. It shaped my life

and will definitely continue to do so

for many other young people from

Kenya and the region. The certificates

I was awarded by KASNEB have

enabled me to positively impact

my generation as I serve the nation.

Experience


The word “digital economy” implies the wide use of information technology

in all aspects of running organisations, be they business or otherwise. The

technology underlying the digital economy goes far beyond the internet and

personal computers. It permeates systems and processes at the core of these

organisations. As such, it calls for all those working in these organisations

to be computer literate or have IT skills, lest they be declared redundant.

DIGITALECONOMY

THE

As IT continues to get cheaper, faster, better and easier, organisations have

no choice but to adapt. It is no wonder that very many organisations have

digitised their processes. The differences between those organisations

that have adapted and those that have not are palpable.

As organisations continue to be transform into being IT compliant, it is becoming

a necessity or mandatory for individuals to undertake computer courses in order

for them to fit well in these organisations.

Because even simple business transactions are no longer recorded manually,

employers are keen on those who have some form of IT experience. It is no

longer about just having a degree in a

relevant field. Those who have IT knowledge

and experience have an added advantage

when it comes to job seeking. Employers

don’t want to incur an extra dime to train

new employees on matters IT. They want

those who already are trained.

For the older employees, it is increasingly

becoming necessary for them to go back

to class to learn basic computer skills. The

threat from new employees who are tech

savvy is real and the older generation,

popularly referred to as “analogue” could

see themselves losing their jobs if they

don’t up their game. Instead of just sitting

and complaining about this real threat, the

older generation should go back to school

to learn some basic IT skills that will render

them relevant, useful and productive.

Daisy

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While the young generation may consider

itself ahead, they cannot also sit on their

laurels. The IT world undergoes changes so

fast and drastically. Tech gurus are chunning

out new programs like literally overnite.

Before you have completed learning a

program, updates come calling. If you don’t

quickly upgrade your knowledge, you are

quickly left behind. It is no longer enough

to have scratched the surface of some

computer packages after high school.

You must have something that makes you

stand out in the fast paced IT world. To be

more competitive, one needs to learn more

advanced skills, say for instance aspects

like programming, networking, trouble

shooting, cloud services, CAD programs

and so on. Such skills serve to broaden the

opportunities of getting employment.

Holding a CPA qualification doesn’t mean

that you will only be employed as an

accountant. Your employer may actually hire

you not just because you completed your

CPA but because you also hold a diploma in

IT and are hence more productive.

We should therefore stop

complaining about lack of job

opportunities and instead work

towards making ourselves into

what the employers need. The

advantage to most students is that

IT has been integrated within their

syllabuses hence one has no excuse

for ignorance.

Advantages of adopting information communication technologies in business

That information communication

technology has a great impact

on a firm’s performance and its

competitiveness is beyond debate.

A firm that has adapted the use

of modern technologies will incur

lower operation costs as tasks that

require no creativity are assigned

to IT controlled systems ran by a

handful of personnel. This translates

to lower wages for organisations.

While many may argue that the IT race is

resulting in retrenchment of many workers,

it may actually work better for the economy

as the retrenchees venture out into new

business start ups that could eventually offer

more employment opportunities.

Most organisations are currently adapting to

the online forms of business such as selling

and advertising of products. This is a rapidly

growing trend and is very profitable for the

organisations that succeed in it. Online

business models brings down running

costs significantly, especially overheads.

The reason is because such businesses do

not maintain an actual physical office which

would incur expenses like rent, electricity,

water, repairs and so on. Instead, they

create what is called a “virtual” office whose

only footprints are files on computers. The

only costs such businesses incur are those

of the warehouse where they store their

commodities before shipment or delivery

to customers. They don’t even need manual

book keeping as their transactions are done

online via credit cards or mobile money

transfer services.

Consumers have also learnt that this is the

most convenient way to purchase products,

especially when you consider that home

delivery is part of the package. With time, this

will undoubtedly and eventually become

the most common way of doing business

because online business have market reach

that is a much wider physical outlets.

Information technology also helps improve

the quality of products that a firm makes. The

finess of such products renders them more

desirable to the consumers thus increasing

Digital economy


the competitiveness of an IT compliant

firm in comparison to similar firms making

similar products using “analogue” methods.

To survive and suceed for long, old and

new organisation would be well advised to

transform and adapt the new IT technologies

and processes.

Enhancement in communication is also a

great benefit to those organisations that

have gone digital. Tasks are accomplished

faster since no physical movement is

required to pass information. E-mails and

short messages are the norm. Ideas are

also shared among those in similar lines of

business or even among the employees thus

improving production methods.

ICT and vision 2030

The Kenya Vision 2030 has identified Business

Process Outsourcing (BPO) as an emerging

and growing sector expected to become

the sector of choice for employment among

the youth and young professionals. Kenya

intends to quickly establish the necessary

capacity for BPO to flourish and catch up

with other destinations in Africa.

Business process outsourcing

involves the transfer of non-core

business processes along with the

associated operational activities and

responsibilities to a third party with

at least a guaranteed equal service

level. The sector is currently small,

new but is nonetheless a growing

part of the economy. Kenya intends

to target this sector to ensure

diversification of her products and

services.

Kenya intends to do this by implementing a

comprehensive set of incentives to improve

her attractiveness as a BPO destination and

to encourage investments in this field. One

such incentive that is already in place is the

subsidisation of bandwidth costs through

financing from the World Bank.

Key challenges facing this sector are:

• Poor telecommunications infrastructure

which leads to high costs. In comparison,

data transmission costs in Kenya are

three times more expensive than those

of its competitors

• Costly and erratic electricity supply

• Lack of dedicated BPO facilities which

weaken the attractiveness of Kenya as

a primary BPO destination.

• Inadequate supply of necessary skills.

• Poor local supplier base of the necessary

hardware and software.

• No targeted incentives for BPO apart

from those at the standard Export

Processing Zones (EPZ)

As the country intends to go digital, we

should too. Learn current trends and keep

up with technology so that your skills don’t

end up obsolete, costing you your job or

even company.

Digital economy


PICTORIAL

KASNEB Prize award ceremony for the May 2014 examination sitting held at Sarova Panafric Hotel,

Nairobi on Friday, 17 April 2015

Pius M. Nduatih Chief Executive Officer, KASNEB

The Chief Guest Dr. George O. Wakah Senior Deputy Director, Administration and Corporate Affairs, Centre for Parliamentary

Studies and Training.

RECOGNISING EXCELLENT PERFORMANACE


PICTORIAL

KASNEB staff participated in a Charity walk organised by Rotary Club of Ongata Rongai dubbed “ Walk for a better Health” held on Saturday, 18 May 2015 to raise funds to buy modern medical laboratory for the Rongai Health Centre which is the only health facility in Ongata Rongai town.

KASNEB staff plant a tree during the tree planting exercise organised by the Ndakaini Dam Environmental Conservation Association (NDEKA) as a contribution to sustainable supply of water for Nairobi and its environs. The exercise was held at Ndakaini Dam, Thika on Saturday, 18 April 2015.

Meru Trade Fair held at Gitoro, Meru from Wednesday, 3 June 2015 to Saturday, 6 June 2015

Eradication of Jiggerss: KASNEB partnered with Ahadi Kenya Trust to eradicate jiggers in Isiolo County by treating children infested with jiggers, creating awareness on hygiene to prevent recurrence of the infestation and rehabilitating the affected children back to the community and schools on Saturday, 20 June 2015.

Machakos Trade Fair held in Miwani, Machakos from Wednesday, 24 June 2015 to Saturday, 27 June 2015

HEALTH FOR THE COMMUNITY

TOUCHING SOLES

ENVIRONMENTAL SUSTAINABILITY

PROVIDING OPPORTUNITIES


KASNEB donated reading materials and branded shelves to Kenya National Library Service (KNLS) Branches as part of strengthening the partnership to ensure that reading materials are accessible to as many members of the public as possible through the KNLS network. The donations were made from Monday, 22 June 2015 to Wednesday, 24 June 2015.

Tarbaj Community Library - Wajir Mwingi Community Library - Mwingi

Rumuruti Community Library - Rumuruti Kabarnet District Library - Kabarnet Chinga Community Library - Othaya

Naivasha Divisional Library - Naivasha Karatina Divisional Library - Karatina Mutyambua Divisional Library - Sultan Hamud

Malindi Community Library - Malindi Kilifi Community Library - Kilifi

DEVOLVING KNOWLEDGE


I. HOW TO CREATE A STUDENT ACCOUNT ON THE KASNEB STUDENT PORTAL

All students are required to open a student

account on the KASNEB website.

To open the account, follow the steps below:

1. Click on the student login link then

choose the student icon or proceed

to click the student icon if you use the

direct link (http://online.kasneb.or.ke )

to the student portal.

2. Click on create account and select

whether you have a Student Registration

Number or not and proceed to provide

names, preferred email address and a

strong password (which will be used for

future access to self information) and

click save.

3. Provide the email address and password

used when creating the account and

click unlock to login in.

4. Select the “Registration Details” tab.

5. Access the “Course Choice” tab.

6. Select the examination from the

dropdown box, click on the “Yes”

checkbox and provide the registration

number without the prefix (e.g. if

your registration number is

NAC/68148, provide 68148 as

the registration number) and

click save.

Benefits

You will be able to:

• Download authority to sit for

examination/timetable

• Result summary.

Once the website upgrade is finalised

in the near future, you will be able to:

• Edit your contact address

• Check payment status

• Book for examinations.

Students are hereby advised to ensure they have active student accounts given that moving forward, timetables, result summaries and other individualised communication will only be channelled through the student accounts.

UPDATES

II. CALLING ON KASNEB STUDENTS WITH DISABILITIES

We are in the process of enhancing disability

mainstreaming at KASNEB. This is in an effort to

improve our service delivery to our students with

disabilities.

In this connection, KASNEB wishes to invite any

student with a disability to forward the following

details to KASNEB:

• Full name and National Identification/Passport

Number.

• KASNEB registration number.

• Current email, telephone number and

postal address.

• Nature of disability.

Whether registered with the National Council

for Persons with Disability and if so, details of

the registration.

Students with disability are encouraged to

register with the Council. Further details on the

Council are available on the Council’s website

www.ncpwd.go.ke


III. 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) National Bank of Kenya Ltd. (NBK)

Account Number: 01001031572601

b) Equity Bank Ltd.


c) Kenya Post Office Savings Bank (Postbank)


d) Co-operative Bank of Kenya Ltd.


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.

Students are advised that payment of fees at KASNEB offices will soon be phased

out and therefore they should utilise the available channels through the banks.

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

IV. 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.

V. KASNEB CONTACTS

+254 - (020) 4923000

0722201214

0734600624

[email protected]

www.kasneb.or.ke

KASNEBOfficial

@KASNEBOfficial

EXAMINATION DATES

EXAMINATIONS NOTICE - NOVEMBER 2015 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 2015 examinations are as follows:

(a) ATC, ICTT, IST and CMT Levels I and II - Tuesday, 17 November 2015, Wednesday, 18 November 2015 and Thursday, 19 November 2015

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

Tuesday, 17 November 2015 and Wednesday, 18 November 2015 (c) CPA, CS, CICT ,CIFA and CCP Part I - Friday, 20 November 2015, Monday, 23 November 2015 and Tuesday, 24 November 2015

(d) CPA, CS, CICT ,CIFA and CCP Parts II and III - Wednesday, 25 November 2015, Thursday, 26 November 2015 and Friday, 27 November 2015 (e) Foreign Accountancy Qualifications (FAQ) - Wednesday, 25 November 2015 and Thursday, 26 November 2015

(f) Foreign Secretaries Qualifications (FSQ) - Tuesday, 24 November 2015 and Wednesday, 25 November 2015

(g) Kenya Institute of Supplies Management - Associate in Procurement and Supply of Kenya (APS-K) examination - Levels I and II Tuesday, 17 November 2015, Wednesday, 18 November 2015 and Thursday, 19 November 2015

(h) Kenya Institute of Supplies Management - Certified Procurement and Supply Chain Professional of Kenya (CPSP-K) - Part I examination only

Friday, 20 November 2015, Monday, 23 November 2015 and Tuesday, 24 November 2015

2. Closing dates for examinations entries for the November 2015 examinations are as shown below: Normal entry: Friday, 14 August 2015 Late entry: Wednesday, 30 September 2015

3. Examination brochures and forms are obtainable on request, free of charge: (a) In Kenya either in person at the offices of KASNEB or through the post. The examination brochures and forms are also available at any branch of the Kenya

National Library Service (KNLS) countrywide or training institutions. (b) Outside Kenya at the following offices in Eastern and Central Africa:

(i) In Uganda at DMK Associates, Sabina Baiga House, Bombo Road, 2nd floor suite 05 - Kampala, Makerere University Business School (MUBS) - Nakawa, Kampala International University - Kansanga, Busoga University - Iganga, and Bugema University, Kampala Campus - Bombo Road.

(ii) In Rwanda at Kigali Institute of Management - Rimera, University of Rwanda, College of Business and Economics, Gikondo - Kigali, Institut Polytechnique De Byumba, University of Kigali, Kacyiru Campus and Kigali Independent University (ULK).

(iii) In Burundi at the East Africa Centre for Professional Studies (EACPS), Rohero 2, Avenue Mosso next to Solecs Micro Finance, Bujumbura and Kim-PAC, Rohero 2, Avenue Mosso, No.28 - Bujumbura.

(iv) In Cameroon at Maaron Business School, 10 Rue, Joffre, Akwa - Douala and Fomic Business School, Buea, Cameroon. (v) In South Sudan, at the University of Juba.

(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 November 2015 examinations” regarding secure methods of paying fees to KASNEB.

(a) In Kenya. Students are advised to pay through any branch of the National Bank of Kenya Ltd. (NBK), Equity Bank, Kenya Post Office Savings Bank (Postbank) or Co-operative Bank of Kenya. Students may also make payment in person at KASNEB offices in cash, 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 2015 examinations should ENTER for the November 2015 examinations immediately upon confirmation of their May 2015 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.

7. The late registration closing date for applicants wishing to be registered as students in order to be eligible to enter for the November 2015 examinations is Friday, 14 August 2015.


Introduction

The KASNEB policy on review of examination syllabuses provides for a mid-term review of the syllabuses after two and a half years and a major review after five years. A major review of

the syllabuses usually involves significant changes in structure and content of the syllabuses. On the other hand, the focus of a mid-term review is usually on content and not structure of the examinations.

The last major review of the examination syllabuses was undertaken in the years 2008 and 2009 and the revised syllabuses administered for the first time in the November/December 2009 sitting. A mid-term review of the examination syllabuses was undertaken in the year 2012 and the revised syllabuses administered for the first time in the November/December 2012 sitting.

The current major review of the syllabuses commenced in the year 2013 and involved a number of activities, including the following:

(a) Benchmarking visits were undertaken to various reputable professional examinations bodies in various parts of the globe.

(b) A consultant was engaged to collect and analyse views from a wide range of stakeholders both in the public and private sectors. The consultant was also required to engage with employers and undertake a job analysis to identify any gaps between the syllabuses and the market demands.

(c) A syllabuses review technical task force comprising subject experts and practitioners from various fields in both public and private sectors was constituted to develop the draft syllabuses.

(d) Two major stakeholders workshops were held where comments were received on the draft syllabuses and considered as appropriate.

(e) A forum was held with relevant professional institutes for the validation of the syllabuses.

(f ) The syllabuses were approved by the Board of KASNEB.

The revised syllabuses will take effect from 1 July 2015 and be examined for the first time from the November/December 2015 sitting.

1. Examinations under the revised syllabuses

The following examinations will be administered under the

revised syllabuses:

1.1 Professional Examinations(i) Certified Public Accountants (CPA)(ii) Certified Secretaries (CS)

(iii) Certified Information Communication Technologists (CICT)

(iv) Certified Investment and Financial Analysts (CIFA)(v) Certified Credit Professionals (CCP)

Note:

(a) The Certified Public Secretaries (CPS) examination has

been renamed Certified Secretaries (CS) examination.

(b) The Certified Securities and Investment Analysts (CSIA)

examination has been renamed Certified Investment

and Financial Analysts (CIFA) examination.

1.2 Diploma Examinations

(i) Accounting Technicians Diploma (ATD)(ii) Diploma in Information Communication

Technology (DICT)(iii) Diploma in Credit Management (DCM)

2. Examinations to be phased out

The following technician examinations will be phased out after

the November/December 2015 examination sitting:

(a) Accounting Technicians Certificate (ATC)(b) Information Communication Technology Technicians

(ICTT)(c) Credit Management Technicians (CMT)(d) Investment and Securities Technicians (IST)

3. Review of policies, rules and regulations

The major review of the syllabuses also involved a review of

the policies, rules and regulations in order to ensure effective

implementation of the revised syllabuses and enhance customer

satisfaction. The changes in policies, rules and regulations can be

accessed on the KASNEB website www.kasneb.or.ke.

4. Structure of examinations under the revised syllabuses

The revised structure of the examinations and transition

arrangements are presented below. Advance copies of the

syllabuses featuring the learning outcomes and detailed content

have been dispatched to the training institutions, both accredited

and those in the process of accreditation. The syllabuses can be

accessed in soft form from the individual KASNEB students’ portal.

Printing of the syllabuses booklets is also ongoing and will be

availed on completion of the process.

2015 KASNEB SYLLABUSESSyllabus

May 2015

CPACertified Public Accountant

KASNEB

KASNEBKASNEB Towers

Hospital Road, Upper Hill

P.O. Box 41362 - 00100 Nairobi - Kenya

Tel: 254(020) 4923000

Cellphone: 0722-201214/0734-600624

Fax: 254(020) 2712915


Website: www.kasneb.or.ke


KASNEB is ISO 9001:2008 certified


Syllabus

May 2015

CSCertified Secretary

KASNEB

KASNEB

KASNEB Towers



Tel: 254(020) 4923000

Cellphone: 0722-201214/0734-600624

Fax: 254(020) 2712915






Revised Syllabus

May 2015

CICTCertified Information Communication Technologist

KASNEB

KASNEB

KASNEB Towers



Tel: 254(020) 2712640 / 2712828

Cellphone: 0722-201214/0734-600624

Fax: 254(020) 2712915






Syllabus May 2015

CIFACertified Investment & Financial Analyst

KASNEB

KASNEBKASNEB Towers



Tel: 254(020) 4923000

Cellphone: 0722-201214/0734-600624

Fax: 254(020) 2712915






Revised Syllabus May 2015

CCPCertified Credit Professional

KASNEB

KASNEBKASNEB Towers



Tel: 254(020) 4923000

Cellphone: 0722-201214/0734-600624

Fax: 254(020) 2712915






Syllabus May 2015

ATAccounting Technician

KASNEB

KASNEBKASNEB Towers Hospital Road, Upper Hill


Tel: 254(020) 4923000

Cellphone: 0722-201214/0734-600624

Fax: 254(020) 2712915






KASNEB

KASNEBKASNEB Towers Hospital Road, Upper Hill

P.O. Box 41362 - 00100 Nairobi - KenyaTel: 254(020) 4923000

Cellphone: 0722-201214/0734-600624Fax: 254(020) 2712915E-mail: [email protected]





Governance & Management

Diploma inSyllabus

May 2015

KASNEB

KASNEBKASNEB Towers

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

Tel: 254(020) 4923000Cellphone: 0722-201214/0734-600624

Fax: 254(020) 2712915E-mail: [email protected]





Information Communication Technology

Diploma inSyllabus

May 2015

KASNEB

KASNEBKASNEB Towers



Tel: 254(020) 4923000

Cellphone: 0722-201214/0734-600624

Fax: 254(020) 2712915






Credit ManagementDiploma in

REVISED


REVISED 2015 KASNEB SYLLABUSES

CPAPaper No: Paper

Section 1CA11 Financial Accounting

CA12 Commercial Law

CA13 Entrepreneurship and Communication

Section 2CA21 Economics

CA22 Management Accounting

CA23 Public Finance and Taxation

Section 3CA31 Company Law

CA32 Financial Management

CA33 Financial Reporting

Section 4CA41 Auditing and Assurance

CA42 Management Information Systems

CA43

Quantitative Analysis

Section 5CA51 Strategy,

Governance and Ethics

CA52 Advanced Management Accounting

CA53 Advanced Financial Management

Section 6CA61 Advanced Public Finance

and TaxationCA62 Advanced Auditing and

AssuranceCA63 Advanced Financial

Reporting

CSPaper No: Paper

Section 1CS11 Organisational Behaviour

CS12 Commercial Law

CS13 Business Communication

Section 2CS21 Economics

CS22 Principles of Accounting

CS23 Public Finance and Taxation

Section 3CS31 Company Law

CS32 Financial Management

CS33 Principles and Practice of Management

Section 4CS41 Corporate Secretarial

PracticeCS42 Management

Information SystemsCS43 Law and Procedure of

Meetings

Section 5CS51 Human Resource

ManagementCS52 Financial Markets Law

CS53 Governance and Ethics

Section 6CS61 Strategic Management

CS62 Public Policy and Administration

CS63 Governance and Secretarial Audit

CICTPaper No: Paper

Section 1CT11 Introduction to

ComputingCT12 Computer Applications

- PracticalCT13 Entrepreneurship

and CommunicationSection 2CT21 Operating Systems -

PracticalCT22 Principles of

AccountingCT23 Computer Support

and Maintenance

Section 3CT31 Database Systems

CT32 Systems Analysis and Design

CT33 Structured Programming

Section 4CT41 Object Oriented

ProgrammingCT42 Web design and

e-CommerceCT43 Data Communication

and Computer Networks (Practical)

Section 5CT51 Strategy,


CT52 Software Engineering

CT53 Mobile Application Development

Section 6CT61 Systems Security

CT62 Information Systems Project Management

CT63 Research Methods

ICT ProjectCICT candidates are required to undertake an ICT project after completing the above 18 papers. The project must commence within 12 months after completing the papers.

CIFAPaper No: Paper

Section 1CI11 Financial Accounting

CI12 Financial Mathematics

CI13 Entrepreneurship and Communication

Section 2CI21 Economics

CI22 Financial Institutions and Markets

CI23 Public Finance and Taxation

Section 3CI31 Regulation of Financial

MarketsCI32 Corporate Finance

CI33 Financial Statements Analysis

Section 4CI41 Equity Investments

AnalysisCI42 Portfolio Management

CI43 Quantitative Analysis

Section 5CI51 Strategy,


CI52 Fixed Income Investments Analysis

CI53 Alternative Investments Analysis

Section 6CI61 Advanced Portfolio

ManagementCI62 International Finance

CI63 Derivatives Analysis

CCPPaper No: Paper

Section 1CP11 Credit Management

CP12 Commercial Law

CP13 Entrepreneurship and Communication

Section 2CP21 Economics

CP22 Principles of Accounting

CP23 Public Finance and Taxation

Section 3CP31 Company Law

CP32 Financial Management

CP33 Marketing and Public Relations

Section 4CP41 Law Governing Credit

PracticeCP42 Management

Information SystemsCP43 Quantitative

Analysis

Section 5CP51 Strategy,


CP52 Banking Law and Practice

CP53 Credit Management in the Financial Sector

Section 6CP61 Debt Recovery

CP62 Corporate Lending

CP63 Credit Practice

I. REVISED STRUCTURES OF PROFESSIONAL AND DIPLOMA EXAMINATION SYLLABUSES

(a) Professional Examinations


(a) Diploma Examinations

REVISED 2015 KASNEB SYLLABUSESAccounting Technicians Diploma (ATD)Paper No: Paper

LEVEL I

AD11 Introduction to Financial Accounting

AD12 Commercial Law

AD13 Entrepreneurship and Communication

AD14 Information Communication Technology

LEVEL II

AD21 Financial Accounting

AD22 Principles of Management

AD23 Business Mathematics and Statistics

AD24 Fundamentals of Finance

LEVEL III

AD31 Principles of Economics

AD32 Fundamentals of Management Accounting

AD33 Principles of Public Finance and Taxation

AD34 Auditing

Diploma in Information Communication Technology (DICT)Paper No: Paper

LEVEL I

TD11 Introduction to Computing

TD12 Computer Mathematics

TD13 Entrepreneurship and Communication

TD14 Computer Applications Practical I

LEVEL II

TD21 Computer Networking

TD22 Internet Skills

TD23 Computer Support and Maintenance

TD24 Programming Concepts

LEVEL III

TD31 Principles of Web Development

TD32 Foundations of Accounting

TD33 Information Systems Project Skills

TD34 Computer Applications Practical II

Diploma in Credit Management (DCM)Paper No: Paper

LEVEL I

CD11 Fundamentals of Credit Management

CD12 Commercial Law

CD13 Entrepreneurship and Communication

CD14 Information Communication Technology

LEVEL II

CD21 Credit Management

CD22 Principles of Management

CD23 Business Mathematics and Statistics

CD24 Law Governing Credit Practice

LEVEL III

CD31 Marketing and Customer Relations

CD32 Foundations of Accounting

CD33 Principles of Public Finance and Taxation

CD34 Practice of Credit Management

NB: Common papers in bold

II. TRANSITION ARRANGEMENTS FOR THE REVISED EXAMINATION SYLLABUSES Transition arrangements are usually made to ensure a smooth roll over

from the old syllabuses to the new syllabuses. The current transition

arrangements address the change over to the revised syllabuses with

effect from 1 July 2015. These arrangements have addressed the

following factors, among others:

• Unexpired credit retentions as at 30 June 2015.

• Exemptions granted for papers in sections not sat as at 30 June 2015.

• Progression for candidates of examinations which are due to be

phased out.

• Progression for candidates where levels, parts and sections have

changed in terms of composition of papers.

• Progression for registered candidates who have not sat any

examination as at 30 June 2015.

• Registration of candidates for examinations after 30 June 2015.

Specific transition provisions

The transition provisions from the current syllabuses to the revised

syllabuses are as follows.

1. CPA, CPS, CICT, CSIA and CCP students

(a) All students for the above listed examinations will convert

to the revised examination syllabuses commencing 1 July

2015 in the various parts and sections that they will have

progressed to in the current syllabuses.

(b) Exemptions:

(i) Where a student had been granted an exemption in a

particular paper, the exemption will be retained. This

will include papers where the titles may have changed

but the substantive content has remained the same,

such as Management Accounting (previously Cost

Accounting) in CPA Section 2.

(ii) However, where a student had been granted

exemption in a paper which, under the revised

syllabuses, has been moved to a section which the

student will have already completed as at the May

2015 sitting, the exemption fee paid for the paper

concerned will be credited to the student’s account

at KASNEB.

(iii) Exemptions granted for whole sections or parts

under the current syllabuses shall be retained under

the revised syllabuses.

(c) Credit retentions for students who will not have

completed their respective sections after the May 2015

sitting will be retained provided that the paper(s) with

credit retentions have remained in the same section(s)

under the revised syllabuses. However, candidates who

have attempted and passed Company Law in CPA/CPS/

CCP Section 4 will be able to transfer the credit to Section

3 of the respective examinations.

2. ATC, ICTT, IST and CMT students

The four Technician examinations namely ATC, ICTT, IST and CMT

will be phased out after the November/December 2015 sitting.

A parallel examination administration system will be adopted for

the Technician examinations during the November/December

2015 sitting with a view to phasing out the examinations after the

November/December 2015 sitting.


Under the parallel system, the Technician examinations will be

administered together with the Diploma examinations namely ATD,

DICT and DCM in the November/December 2015 sitting.

The transition arrangements will work out as follows:

1. Students currently in ATC/ICTT/CMT Level I who sit and pass the

May 2015 sitting

(a) The students will be required to choose either ATC/ICTT/

CMT Level II as applicable, or Level II of the respective

Diploma in the November/December 2015 sitting.

(b) Students who choose the ATC/ICTT/CMT Level II and pass

during the November/December 2015 sitting will graduate

under the respective examination passed. Those who do

not pass will be transferred to Level II of the respective

Diploma with effect from 1 January 2016.

(c) Students who choose the respective Diploma Level II and

pass the November/December 2015 sitting will proceed to

Diploma Level III from 1 January 2016. Those who fail will

repeat the respective Diploma Level II from 1 January 2016.

2. Students currently in ATC/ICTT/CMT Level I who sit but do not pass

the May 2015 sitting

(a) The students will be required to resit the papers not

passed in ATC/ICTT/CMT Level I in the November/

December 2015 sitting.

(b) Students who pass the ATC/ICTT/CMT Level I in the

November/December 2015 sitting will proceed to the

respective Diploma Level II from 1 January 2016. Those

who do not pass will be transferred to Level I of the

respective Diploma with effect from 1 January 2016.

3. Registered students in ATC/ICTT/CMT Level I who have not booked

the May 2015 sitting (mostly new students)

(a) The students will be allowed to book for either ATC/ICTT/

CMT Level I as registered, or the respective Diploma Level I

in the November/December 2015 sitting.

(b) Students who pass the ATC/ICTT/CMT Level I in the

November/December 2015 sitting will proceed to the

respective Diploma Level II. The same will apply to those

who sit and pass the Diploma Level I.

(c) Students who fail the ATC/ICTT/CMT Level I or Diploma

Level I in the November/December 2015 sitting will repeat

the Diploma Level I with effect from 1 January 2016.

4. Students currently in ATC/ICTT/CMT Level II who sit and pass the

May 2015 sitting

The students will graduate.

5. Students currently in ATC/ICTT/CMT Level II who sit but do

not pass the May 2015 sitting

(a) The students will be required to resit the papers not passed in ATC/

ICTT/CMT Level II in the November/December 2015 sitting.

(b) Students who pass the ATC/ICTT/CMT Level II in the November/

December 2015 sitting will graduate. Those who do not pass will

be transferred to Level II of the respective Diploma with effect from

1 January 2016.

6. IST students

(a) Students who pass Level I of the IST examination during the May

2015 sitting will proceed to Level II of the examination and be

eligible to sit for that Level during the November/December 2015

sitting.

(b) Students who do not pass Level I of the IST examination during the

May 2015 sitting will be expected to resit the papers not passed in

the same level during the November/December 2015 sitting.

(c) Students who pass Level II of the examination either during the

May 2015 sitting or the November/December 2015 sitting will be

allowed to graduate in the respective sitting.

(d) Students who do not pass either Level I or Level II of the IST

examination in the November/December 2015 sitting will be

required to transit to either the ATD or DCM in the respective levels.

Both graduates of the Technician and Diploma examinations will be

eligible to pursue the relevant professional programmes of KASNEB.

3. Other transition provisions

(a) Students who are eligible to convert to the Diploma programmes

(ATD/DICT and DCM) will be allowed to do so and book the

November/December 2015 examinations up to 15 September

2015 by paying the normal examination entry fees.

(b) All credit retentions for ATC, ICTT, IST and CMT will expire after the November/December 2015 sitting.


III. CHANGES IN POLICIES, RULES AND REGULATIONS UNDER THE REVISED EXAMINATION SYLLABUSES

The following changes in policies, rules and regulations have been introduced as part of the major review of examination syllabuses. The changes

are aimed at, among other objectives, ensuring effective implementation of the revised examination syllabuses, enhancing customer service,

enhancing the recognition of KASNEB qualifications regionally and globally and continuously realigning the qualifications with market trends

and demands.

One of the major changes introduced as part of the major review of the syllabuses is the introduction of Diploma qualifications and phasing out

of the Technician qualifications which will commence from 1 January 2016.


The changes in policies, rules and regulations are summarised in the table below. Unless otherwise specified, the changes take effect from 1 July 2015.

Policy/rule/regulation Current provision New provisionMinimum entry requirements for diploma programmes

Not applicable The minimum entry requirement for the diploma programmes will be KCSE mean grade C- or equivalent.

Deadlines for late registration and examination entry

Late registration deadline: • 31 December for the May/June sitting.• 30 June for the November/December sitting.

Late examination entry deadline:• 15 March for the May/June sitting.• 15 September for the November/December

sitting.

The deadline for late registration has been extended to:• 15 February for the May/June sitting.• 15 August for the November/December sitting.

The deadline for late examination entry has been extended to:• 31 March for the May/June sitting. • 30 September for the November/December sitting.

Effective date for payment of annual registration renewal fee

This fee is payable on 1 July following the date of registration

The annual registration renewal fee shall become due on 1 July following the first eligible examination sitting and annually thereafter. For instance, a student who registers by 31 May 2015 will be eligible to enter examinations from the November/December 2015 sitting. The first renewal will therefore be due on 1 July 2016

Exemptions for diploma holders wishing to pursue KASNEB professional programmes

Exemptions are granted to diploma holders from various institutions of higher learning and national examination bodies on paper by paper basis

Exemptions will be granted on paper by paper basis to holders of diplomas from KNEC and KIM. For other diploma programmes, exemptions will be considered subject to evaluation of content of the respective diploma programmes as submitted to KASNEB

Law and taxation papers for foreign candidates based outside Kenya

All foreign candidates based outside Kenya are required to sit for law and taxation papers broadly based on Kenyan law

Localised papers in law and taxation will be set for students in Rwanda, Cameroon and other countries. The change in policy will take effect from 1 July 2016

Code of Conduct and Ethics for students

There are various rules and regulations governing the conduct of students. There is no Code of Conduct and Ethics

A Code of Conduct and Ethics will be introduced for new and continuing students. The Code will be distributed to all students. All students will be required to commit themselves and abide by the Code

Practical experience requirement There is no system in place to enable candidates log in their practical experience acquired in the course of their studies

A practical experience log will be issued to students at the point of registration. The roll out of the log will start with the CPA students. It will thereafter be applicable to other students pursuing other KASNEB professional programmes. The effective date for implementing the practical experience log is 1 July 2016

Past papers Students are allowed to collect their past papers after 24 hours of sitting the paper. Online access is not available

Past papers will be uploaded on the KASNEB website for controlled access by students whose annual registration renewal status is up to date and accredited training institutions

Undertaking of the ICT Project in the CICT examination

The duration within which the project must be started after the student completes CICT Part III papers is not specified

A student is required to restart a project afresh and pay the full fees if he/she does not pass during the final presentation

Students will be required to commence the project within twelve (12) months of completing CICT Part III papers

Students who commence the project after the one year period will be required to pay late project fee of 50%

Where a student presents a proposal which is accepted by KASNEB, but which is not successfully defended during the first examination sitting, the student may be allowed upon request to improve on the proposal and pay 50% of the applicable fee, provided the project is presented during the next immediate examination sitting. Otherwise the student will be required to pay the full project fee

Students who register but do not book for any examination or continuing students who do not book for any examination within three years of registration

The students’ registration numbers are retained in the system and they continue accumulating annual registration renewal arrears

The registration numbers for the students will be automatically deactivated after the three years. The deactivated registration numbers will be reactivated upon payment of a reactivation fee of Sh. 6,000 and the renewal arrears for the last three years before the registration number was reactivated

KASNEB graduates who wish to register for other KASNEB programmes

The KASNEB graduates wishing to pursue other KASNEB programmes are required to resubmit academic certificates, passport photos and other documents prior to registration

Such graduates wishing to pursue other KASNEB programmes will only be required to complete the registration form, attach a copy of identity card/passport, two recent passport photos and pay the requisite registration fee

Security checks on candidates entering the examinations room

Security checks have not been fully effected Security checks will be conducted as part of preventive and precautionary measures for candidates entering the examinations room



REVISED 2015 KASNEB SYLLABUSESIV. RETENTION OF CREDITS AND EXEMPTIONS FROM THE CURRENT SYLLABUSES TO THE

REVISED SYLLABUSES

1. CERTIFIED PUBLIC ACCOUNTANTS (CPA) EXAMINATION

CURRENT SYLLABUS RETENTION OF CREDIT RETENTION OF EXEMPTION WHERE GRANTED AS INDIVIDUAL PAPER REVISED SYLLABUS

SECTION 1 SECTION 1

CA11: Financial Accounting Retained under CA11 Retained under CA11 CA11: Financial Accounting

CA12: Introduction to Law Retained under CA12 Retained under CA12 CA12: Commercial Law

CA13: Entrepreneurship and Communication Retained under CA13 Retained under CA13 CA13: Entrepreneurship and Communication

SECTION 2 SECTION 2

CA21: Economics Retained under CA21 Retain under CA21 CA21: Economics

CA22: Cost Accounting Retained under CA22 Retained under CA22 CA22: Management Accounting

CA23: Auditing and Assurance Not retained Retained under CA41 CA23: Public Finance and Taxation

SECTION 3 SECTION 3

CA31: Management Information Systems Not retained Retained under CA42 provided Section 4 not yet passed CA31: Company Law

CA32: Financial Management Retained under CA32 Retained under CA32 CA32: Financial Management

CA33: Financial Reporting Retained under CA33 No exemptions are granted in paper CA33: Financial Reporting

SECTION 4 SECTION 4

CA41: Taxation Not retained No exemptions are granted in paper CA41: .Auditing and Assurance

CA42: Company LawRetained under CA31 if passed, provided Section 3 not yet passed

Retained under CA31 provided Section 3 not yet passed CA42: Management Information Systems

CA43: Quantitative Analysis Retained under CA43 Retained under CA43 CA43: Quantitative Analysis

SECTION 5 SECTION 5

CA51: Principles and Practice of Management Not retained Not retained CA51: Strategy, Governance and Ethics

CA52: Management Accounting Retained under CA52 No exemptions are granted in paper CA52: Advanced Management Accounting

CA53: Advanced Financial Management Retained under CA53 No exemptions are granted in paper CA53: Advanced Financial Management

SECTION 6 SECTION 6

CA61: Advanced Taxation Retained under CA61 No exemptions are granted in paper CA61: Advanced Public Finance and Taxation

CA62: Advanced Auditing and Assurance Retained under CA62 No exemptions are granted in paper CA62: Advanced Auditing and Assurance

CA63: Advanced Financial Reporting Retained under CA63 No exemptions are granted in paper CA63: Advanced Financial Reporting

2. CERTIFIED PUBLIC SECRETARIES (CPS) - REBRANDED AS CERTIFIED SECRETARIES (CS) EXAMINATION

CURRENT SYLLABUS (CPS) RETENTION OF CREDIT RETENTION OF EXEMPTION WHERE GRANTED AS INDIVIDUAL PAPER REVISED SYLLABUS (CS)

SECTION 1 SECTION 1

CS11: Organisational Behaviour Retained under CS11 Retained under CS11 CS11: Organisational Behaviour

CS12: Introduction to Law Retained under CS12 Retained under CS12 CS12: Commercial Law

CS13: Communication and Report Writing Retained under CS13 Retained under CS13 CS13: Business Communication

SECTION 2 SECTION 2

CS21: Economics Retained under CS21 Retain under CS21 CS21: Economics

CS22: Financial Accounting Retained under CS22 Retained under CS22 CS22: Principles of Accounting

CS23: Taxation Theory and Practice Retained under CS23 Retained under CS23 CS23: Public Finance and Taxation

SECTION 3 SECTION 3

CS31: Management Information Systems Not retained Retained under CS42 provided Section 4 not yet passed CS31: Company Law

CS32: Financial Management Retained under CS32 Retained under CS32 CS32: Financial Management

CS33: Company Secretarial Practice Not retained No exemptions are granted in paper CS33: Principles and Practice of Management


REVISED 2015 KASNEB SYLLABUSESCURRENT SYLLABUS (CPS) RETENTION OF CREDIT RETENTION OF EXEMPTION WHERE

GRANTED AS INDIVIDUAL PAPER REVISED SYLLABUS (CS)

SECTION 4 SECTION 4

CS41: Entrepreneurship Not retained Not retained CS41: Corporate Secretarial Practice

CS42: Company LawRetained under CS31 if passed, provided Section 3 not yet passed

Retained under CS31 provided Section 3 not yet passed CS42: Management Information Systems

CS43: Meetings - Law and Procedure Retained under CS 43 No exemptions are granted in paper CS43: Law and Procedure of Meetings

SECTION 5 SECTION 5

CS51: Principles and Practice of Management Not retained Retained under CS33 provided Section 3 not yet passed CS51: Human Resource Management

CS52: Advanced Company Secretarial Practice Retained under CS52 No exemptions are granted in paper CS52: Financial Markets Law

CS53: Project Planning and Management Not retained Not retained CS53: Governance and Ethics

SECTION 6 SECTION 6

CS61: Strategic Management Retained under CS61 No exemptions are granted in paper CS61: Strategic Management

CS62: Strategic Human Resources Management Not retained No exemptions are granted in paper CS62: Public Policy and Administration

CS63: Corporate Governance and Ethics Not retained No exemptions are granted in paper CS63: Governance and Secretarial Audit

3. CERTIFIED INFORMATION COMMUNICATION TECHNOLOGISTS (CICT) EXAMINATION

CURRENT SYLLABUS RETENTION OF CREDIT RETENTION OF EXEMPTION WHERE GRANTED AS INDIVIDUAL PAPER REVISED SYLLABUS

SECTION 1 SECTION 1

CT11: Introduction to Computing Retained under CT11 Retained under CT11 CT11: Introduction to Computing

CT12 (T): Computer Applications - Theory Not retained Not retained CT12: Computer Applications - Practical

CT12 (P): Computer Applications - Practical Retained under CT12 Retained under CT12 CT13: Entrepreneurship and Communication

CT 13: Entrepreneurship and Communication Retained under CT13 Retained under CT13

SECTION 2 SECTION 2

CT21 (T): Operating Systems - Theory Not retained Not retained CT21: Operating Systems - Practical

CT21 (P): Operating Systems - Practical Retained under CT21 Retained under CT21 CT22: Principles of Accounting

CT22: Financial Accounting Retained under CT22 Retained under CT22 CT23: Computer Support and Maintenance

CT23: Computer Support and Maintenance Retained under CT23 Retained under CT23

SECTION 3 SECTION 3

CT31: Database systems Retained under CT31 Retained under CT31 CT31: Database systems

CT32: Structured programming Retained under CT33 Retained under CT33 CT32: Systems analysis and Design

CT33: Systems analysis and design Retained under CT32 Retained under CT32 CT33: Structured Programming

SECTION 4 SECTION 4

CT41: Object Oriented Programming Retained under CT41 Retained under CT41 CT41: Object Oriented ProgrammingCT42 (T): Data Communication and Computer Networks - Theory Not retained Not retained CT42: Web design and e-Commerce

CS42 (P): Data Communication and Computer Networks - Practical Retained under CT43 No exemptions are granted in paper CT43: Data Communication and Computer Networks -

PracticalCT 43: Systems Security, Professional Values

and Ethics Not retained No exemptions are granted in paper

SECTION 5 SECTION 5

CT51: Principles and Practice of Management Not retained Not retained CT51: Strategy, Governance and Ethics

CT52: Software Engineering Retained under CT52 No exemptions are granted in paper CT52: Software Engineering

CT53: Project Planning and Management Not retained Retained under CT62 CT53: Mobile Application Development

SECTION 6 SECTION 6

CT61: Information Systems Management Not retained No exemptions are granted in paper CT61: Systems SecurityCT62: Web design, Internet programming and

e-commerce Not retained No exemptions are granted in paper CT62: Information Systems Project Management

CT63: Research Methods Retained under CT63 No exemptions are granted in paper CT63: Research Methods

Information Systems Project Not applicable Not applicable ICT Project


REVISED 2015 KASNEB SYLLABUSES4. CERTIFIED SECURITIES AND INVESTMENT ANALYSTS (CSIA) - REBRANDED AS CERTIFIED INVESTMENT AND FINANCIAL ANALYSTS (CIFA) EXAMINATION

CURRENT SYLLABUS (CSIA) RETENTION OF CREDIT RETENTION OF EXEMPTION WHERE GRANTED AS INDIVIDUAL PAPER REVISED SYLLABUS (CIFA)

SECTION 1 SECTION 1

CI11: Financial Mathematics Retained under CI12 Retained under CI12 CI11: Financial Accounting

CI12: Financial Institutions and Markets Not retained Retained under CI22 provided Section 2 not yet passed CI12: Financial Mathematics

CI13: Entrepreneurship and Communication Retained under CI13 Retained under CI13 CI13: Entrepreneurship and Communication

SECTION 2 SECTION 2

CI21: Economics Retained under CI21 Retain under CI21 CI21: Economics

CI22: Financial Accounting Not retained Retained under CI11 provided Section 1 not yet passed CI22: Financial Institutions and Markets

CI23: Taxation Theory and Practice Retained under CI23 Retained under CI23 CI23: Public Finance and Taxation

SECTION 3 SECTION 3

CI31: Management Information Systems Not retained Not retained CI31: Regulation of Financial Markets

CI32: Financial Management Retained under CI32 Retained under CI32 CI32: Corporate Finance

CI33: Financial Statements Analysis Retained under CI33 Retained under CI33 CI33: Financial Statements Analysis

SECTION 4 SECTION 4CI41: Advanced Finance, Investment and

Equity Analysis Retained under CI41 No exemptions are granted in paper CI41: Equity Investments Analysis

CI42: Law and Regulations Governing Financial Markets Not retained No exemptions are granted in paper CI42: Portfolio Management

CI43: Quantitative Analysis Retained under CI43 Retained under CI43 CI43: Quantitative Analysis

SECTION 5 SECTION 5

CI51: Principles and Practice of Management Not retained Not retained CI51: Strategy, Governance and EthicsCI52: Valuation and Analysis of Fixed

IncomeSecurities Retained under CI52 No exemptions are granted in paper CI52: Fixed Income Investments Analysis

CI53: Asset Management Not retained No exemptions are granted in paper CI53: Alternative Investments Analysis

SECTION 6 SECTION 6

CI61: Portfolio Management Retained under CI61 No exemptions are granted in paper CI61: Advanced Portfolio Management

CI62: International Finance Retained under CI62 No exemptions are granted in paper CI62: International Finance

CI63: Valuation and Analysis of Derivatives Retained under CI63 No exemptions are granted in paper CI63: Derivatives Analysis

5. CERTIFIED CREDIT PROFESSIONALS (CCP) EXAMINATIONCURRENT SYLLABUS RETENTION OF CREDIT RETENTION OF EXEMPTION WHERE

GRANTED AS INDIVIDUAL PAPER REVISED SYLLABUS

SECTION 1 SECTION 1

CP11: Credit Management Retained under CP11 Retained under CP11 CP11: Credit Management

CP12: Introduction to Law Retained under CP12 Retained under CP12 CP12: Commercial Law

CP13: Entrepreneurship and Communication Retained under CP13 Retained under CP13 CP13: Entrepreneurship and Communication

SECTION 2 SECTION 2

CP21: Economics Retained under CP21 Retain under CP21 CP21: Economics

CP22: Financial Accounting Retained under CP22 Retained under CP22 CP22: Principles of Accounting

CP23: Taxation Theory and Practice Retained under CP23 Retained under CP23 CP23: Public Finance and Taxation

SECTION 3 SECTION 3

CP31: Management Information Systems Not retained Retained under CP42 provided Section 4 not yet passed CP31: Company Law

CP32: Financial Management Retained under CP32 Retained under CP32 CP32: Financial Management

CP33: Advanced Credit Management Not retained No exemptions are granted in paper CP33: Marketing and Public Relations

SECTION 4 SECTION 4

CP41: Marketing Not retained Retained under CP33 provided Section 3 not yet passed CP41: Law Governing Credit Practice

CP42: Company LawRetained under CP31 if passed, provided Section 3 not yet passed

Retained under CP31 provided Section 3 not yet passed CP42: Management Information Systems

CP43: Quantitative Analysis Retained under CP43 Retained under CP43 CP43: Quantitative Analysis


REVISED 2015 KASNEB SYLLABUSESCURRENT SYLLABUS RETENTION OF CREDIT RETENTION OF EXEMPTION WHERE

GRANTED AS INDIVIDUAL PAPER REVISED SYLLABUS

SECTION 5 SECTION 5

CP51: Principles and Practice of Management Not retained Not retained CP51: Strategy, Governance and Ethics

CP52: Public Relations Not retained No exemptions are granted in paper CP52: Banking Law and Practice

CP53: Law Governing Credit Practice Not retained No exemptions are granted in paper CP53: Credit Management in the Financial Sector

SECTION 6 SECTION 6

CP61: Debt recovery Retained under CP61 No exemptions are granted in paper CP61: Debt recovery

CP62: Corporate lending Retained under CP62 No exemptions are granted in paper CP62: Corporate lending

CP63: Practice of Credit Management Retained under CP63 No exemptions are granted in paper CP63: Credit Practice

Enquiries and clarificationsAny enquiries or clarifications on the major syllabuses review may be forwarded to Christabel L. Osango (email: [email protected]), Erasto M. Ng’ang’a (email: [email protected]) or to [email protected].

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.

INTERNAL AUDITITS ROLE IN STRATEGIC PLANNING

KASNEB The Professional Journal of KASNEB Issue No. 1 January - March 2014


TOPICS FEATURED INTERNAL AUDIT

REGIONAL ECONOMIC

INTEGRATION

INVESTOR COMPENSATION ROLE OF DIASPORA CREDIT RATING

KASNEB UPDATES EXAMINATIONS

FEEDBACK

KASNEB The Professional Journal of KASNEB Issue No. 2 April - June 2014


TOPICS FEATURED

ONLINE COLLABORATION

DEFERRED TAXCOMPUTER-

ASSISTED AUDIT TECHNIQUES

METHODOLOGIES IN TEACHING

TRADITIONAL VERSUS ONLINE

LIBRARIES

BALANCE OF PAYMENTS

KASNEB The Professional Journal of KASNEB Issue No. 3 July - September 2014


TOPICS FEATURED

ETHICS IN BUSINESS

BRANDINGENVIRONMENTAL

MANAGEMENT ACCOUNTING

MANAGING CHANGE

EXCHANGE RATE EXPOSURE AND MANAGEMENT

HIRING EMPLOYEES WITH AN ENTREPRENEURIAL

MINDSET

EXAMINATIONS FEEDBACK

KASNEB

The Professional Journal of KASNEB Issue No. 2 April - June 2014

KASNEB NEWSLINE

EDUCATIVE INFORMATIVE

ENTERTAINING

TOPICS FEATURED

ONLINE

COLLABORATIONDEFERRED TAX

COMPUTER-

ASSISTED AUDIT

TECHNIQUES

METHODOLOGIES

IN TEACHING

TRADITIONAL

VERSUS ONLINE

LIBRARIES

BALANCE OF

PAYMENTS

1

KASNEB The Professional Journal of KASNEB Issue No. 4 October - December 2014


TOPICS FEATURED

ELECTRONIC RECORDS

MANAGEMENT

ACCOUNT RECEIVABLES

BALANCED SCORECARD

ENTERPRISE RESOURCE

MANAGEMENTCOMMUNICATION UPDATES

PRIZE WINNERS

ELECTRONIC RECORDS MANAGEMENT

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KASNEB NEWSLINE, Issue No. 1, January - March 2015 1

KASNEB The Professional Journal of KASNEB Issue No. 1 January - March 2015


TOPICS FEATURED

ENVIRONMENTAL ANALYSIS IN STRATEGIC

MANAGEMENTCROSS LISTING

DEBTORS TRAITS EXTERNALITIES

CRITICAL SUCCESS FACTORS IN FILE

CONVERSION

EXTRAORDINARY BOSSES

REVISED SYLLABUSES

ENVIRONMENTAL ANALYSIS


1. REGISTRATION FEES

1.1 DIPLOMA EXAMINATIONS - ATD/DICT/DCM

Kenya Shillings

Foreign currency

Sh. US$ £Sterling

Registration fees 5,000 83 50

Annual registration renewal fees 1,500 25 15

Registration reactivation fees 6,000 100 60

Student identity card replacement fees 500 8 5

1.2 PROFESSIONAL EXAMINATIONS - CPA/CS/CICT/CIFA/CCP

Registration fees 5,000 83 50

Annual registration renewal fees 1,500 25 15

Registration reactivation fees 6,000 100 60

Student identity card replacement fees 500 8 5

1.3 HOLDERS OF FOREIGN ACCOUNTANCY QUALIFICATIONS/ SECRETARIES QUALIFICATIONS (FAQs/FSQs)

Enrolment fee 40,000 667 400

Examination fee per paper 20,000 333 200

Continuation fee per annum 15,000 250 150

2. EXAMINATION ENTRY FEES

2.1 DIPLOMA

2.1.1 ATD/DCM

Level I 3,500 58 35

Level II 4,000 67 40

Level III 4,500 75 45

*Single paper Level I 1,000 17 10

Level II 1,200 20 12

Level III 1,400 23 14

2.1.2 DICT

Level I 4,100 68 41

Level II 4,000 67 40

Level III 5,100 85 51

*Single paper Level I: Theory 1000 17 10

Level II: Theory 1,200 20 12

Level III: Theory 1,400 23 14

Level I: Practical 1,600 27 16

Level III: Practical 2,000 33 20

2.2 PROFESSIONAL EXAMINATIONS

2.2.1 CPA/CS/CIFA/CCP

Part I: Section 1 2,700 45 27

Section 2 2,700 45 27

Total for Part I 5,400 90 54

*Single paper 1,350 23 14

Kenya Shillings

Foreign currency

Sh. US$ £Sterling

Part II: Section 3 4,400 73 44

Section 4 4,400 73 44

Total for Part II 8,800 146 88


Part III: Section 5 6,600 110 66

Section 6 6,600 110 66

Total for Part III 13,200 220 132


2.2.2 CICT

Part I: Section 1 3,300 55 33

Section 2 3,300 55 33

Total for Part I 6,600 110 66

*Single paper (Theory) 1,350 23 14

*Single paper (Practical) 1,950 33 20

Part II: Section 3 4,400 73 44

Section 4 5,000 83 50

Total for Part II 9,400 156 94


*Single paper (Practical) 2,800 47 28

Part III: Section 5 6,600 110 66

Section 6 6,600 110 66

Total for Part III 13,200 220 132


ICT Project 7,500 125 75

3. EXEMPTIONS

3.1 DIPLOMA EXAMINATIONS

ATD/DICT/DCM

Level I: Per paper 1,300 22 13

Level II: Per paper 1,500 25 15

Level III: Per paper 1,700 28 17

3.2 PROFESSIONAL EXAMINATIONS

CPA/CS/CICT/CIFA/CCP

Part I per paper 1,800 30 18

Part II per paper 2,700 45 27

Part III per paper 3,800 63 38

4. SALE OF PUBLICATIONS

4.1 SYLLABUSES

Cost per copy 500 8 5

4.2 PAST QUESTION PAPERS

A set for each section or level 150 3 2

It is hereby notified for general information to all students of KASNEB, parents, sponsors, training institutions, members of the public and other interested parties that the following schedule of examination fees and related charges shall be applicable under the revised examination syllabuses:

EXAMINATION FEES AND RELATED CHARGES: EFFECTIVE FROM 1 JULY 2015

The fee structure for the Technician examinations remains the same. The technician examinations will be phased out after the November 2015 examinations

KENYA INSTITUTE OF SUPPLIES MANAGEMENTin partnership with KASNEB

CERTIFIED PROCUREMENT AND SUPPLY PROFESSIONAL OF KENYA (CPSP-K) EXAMINATION ASSOCIATE IN PROCUREMENT AND SUPPLY OF KENYA (APS-K) EXAMINATION

Kenya Institute of Supplies Management, Nation Center, Tower B,

12th Floor, Kimathi Street, P. O. Box 30400 – 00100 NAIROBI.

Tel: +254 733333226, +254721244828, +254 0717 004842 Email: [email protected] Website: www.kism.or.ke

KASNEB Towers, Hospital Road, Upper Hill, P.O. Box 41362 – 00100 Nairobi, Kenya Tel: +254(020) 4923000 Cellphone: 0734 600624/0722 201214 Fax: +254(020) 2712915 Email: [email protected] Website: www.kasneb.or.ke

An updated list of training institutions for the APS-K and CPSP-K is available on KISM website www.kism.or.ke

The CPSP-K and APS-K national examinations are established as the National Examinations for certification of procurement and supply chain management professionals in Kenya under sections 5 and 13 of the Supplies Practitioners Management Act, 2007. The examinations are administered nationally in the periods MAY/JUNE and NOVEMBER/DECEMBER, through a partnership between KASNEB and KISM.

Pioneer classes commence in July 2015, with the first examinations in NOVEMBER/DECEMBER 2015.

OVERALL OBJECTIVES OF THE EXAMINATIONS

The CPSP-K examination syllabus is designed to equip learners with knowledge, practical skills and attitudes that will enable them perform supervisory, management and leadership roles as buyers, Supply Chain managers, supervisors, directors, or consultants for organizations. The APS-K examination syllabus equips learners with knowledge, skills and aptitudes to support procurement and supply chain management functions in large organizations and to provide leadership for similar functions in small organizations.

THE CPSP-K COMPRISES FOUR (4) PARTS WITH THE FOLLOWING EXAMINABLE MODULES:

CERTIFIED PROCUREMENT AND SUPPLY PROFESSIONAL PART I

PL1.01 Organizational EnvironmentPL1.02 Procurement of Goods, Services and WorksPL1.03 Procurement PlanningPL1.04 Supply Chain Management Information SystemsPL1.05 Contract Law and NegotiationPL1.06 Finance for Procurement

CERTIFIED PROCUREMENT AND SUPPLY PROFESSIONAL PART II

PL2.01 Supply Chain Management for SMEsPL2.02 Procurement Costing and BudgetingPL2.03 Procurement of Consultancy ServicesPL2.04 Procurement Audit and Risk ManagementPL2.05 Quantitative TechniquesPL2.06 Category Management

CERTIFIED PROCUREMENT AND SUPPLY PROFESSIONAL PART III

PL3.01 Sustainable ProcurementPL3.02 International ProcurementPL3.03 Logistics and Inventory ManagementPL3.04 Research in ProcurementPL3.05 Operations Management

CERTIFIED PROCUREMENT AND SUPPLY PROFESSIONAL PART IV

PL4.01 Procurement GovernancePL4.02 Strategic Supply Chain ManagementPL4.03 Procurement LeadershipPL4.04 Project ManagementPL4.05 Public Private Partnerships (PPPs)PL4.06 Research Project in Procurement and Supply

CPSP-K ENTRY REQUIREMENTS

A person seeking to be registered as a student for the CPSP examination must show evidence of being a holder of one of the following qualifications:

(a) Pass in APS-K, or(b) Degree from a recognized university, or(c) Kenya Certificate of Secondary Education

(KCSE), mean grade of C+ (plus) with minimum C+(plus) in English and in Mathematics, or

(d) Kenya Advanced Certificate of Education (KACE) with atleast TWO principle passes and credits in Mathematics and English at Kenya Certificate of Education (KCE)

(e) Equivalent qualifications as determined by Kenya Institute of Supplies Management (KISM).

THE APS-K COMPRISES TWO (2) PARTS WITH THE FOLLOWING EXAMINABLE MODULES:

ASSOCIATE IN PROCUREMENT AND SUPPLY LEVEL I

AL1.1 Principles of Procurement and SupplyAL1.2 Supply MarketsAL1.3 Introduction to Business LawAL1.4 Supply Chain ManagementAL1.5 Entrepreneurship and Business Ethics

ASSOCIATE IN PROCUREMENT AND SUPPLY LEVEL II

AL2.1 Stores and DistributionAL2.2 Procurement and Supply RelationshipsAL2.3 Contract AdministrationAL2.4 Quantitative SkillsAL2.5 Communication and Office Management

APS-K ENTRY REQUIREMENTS

A person seeking to be registered as a student for the APS-K examination must show evidence of being a holder of one of the following qualifications:

(a) Kenya Certificate of Secondary Education (KCSE)

examination with an aggregate average of at least grade C plain, or

(b) Equivalent qualifications as determined by Kenya Institute of Supplies Management (KISM)

REGISTRATION OF STUDENTS Students must register (by completing form CPSP/APS/1 and submitting with the necessary attachments) before sitting for any examination. Validity of student registration is one calendar year from January to December. Students must renew registration annually by filling student Examination Entry/Registration Renewal form (CPSP/APS/2) and submitting the form to the designated KISM receiving office in Nairobi or to a designated KASNEB or KISM representative in locations outside Nairobi, in accordance with instructions on the Student Registration form.

EXAMINATION ENTRY

Registered students who wish to take the examinations are required to complete form CPSP/ASP/2 and submit with attachements and eveidence of payment of the examination fee on or before 15th August for the November/December examinations and 15th February for the May/June examinations.

Additional information on CPSP -K and APS-K examinations may be obtained from:

(a) KISM offices(b) KASNEB offices(c) Kenya National Library Services (KNLS) branches

countrywide(d) Training institutions(e) KISM and KASNEB websites www.kism.or.ke and

www.kasneb.or.ke

PIONEER TRAINING INSTITUTIONS

• Achievers School of Professional Studies - Nakuru• College of Human Resource Management - Nairobi• Cornerstone Training Institute - Nairobi• Chuka University Embu Campus - Embu• Dedan Kimathi University - Nairobi• Dima College - Nairobi• KCA University - Nairobi• Kisii College of Accountancy - Kisii• Moi University - Eldoret • Nakuru Training Institute - Nakuru• Star Institute of Professionals - Mombasa• Technical University of Mombasa - Mombasa • Times Training Centre - Mombasa

KASNEB NEWSLINE, Issue No. 4, October - December 2014 68

Prize winnersNOVEMBER/DECEMBER 2014 EXAMINATION

PRIZE WINNERSKASNEB wishes to congratulate the following candidates who excelled in their respective examinations and qualified for award of prizes in the specified papers, levels and sections in the November/December 2014 examination sitting.

ACCOUNTING TECHNICIANS CERTIFICATE (ATC) EXAMINATION

ATC - LEVEL I

Introduction to Financial AccountingATC/163923

FRIDAH KEMUNTO OMARIDonor: KASNEB

Introduction to Law (Common Paper)ATC/160052

SAMUEL GIKONYO MAINGIDonor: KASNEB

Entrepreneurship and Communication (Common Paper)ATC/161934

JOSEPH MWANGI THUODonor: KASNEB

Runner up

Entrepreneurship and Communication (Common Paper)ATC/163836

REAGAN ODHIAMBO OGINGADonor: KASNEB

Principles of Management (Common Paper)ATC/161934

JOSEPH MWANGI THUODonor: KASNEB

Business Mathematics (Common Paper)ATC/158909

BONIFACE KIMEU MUANGEDonor: KASNEB

ATC - LEVEL II

Financial AccountingATC/160895

REBECCAH KWAMBOKA JEPHITAR

Donor: KASNEB

Fundamentals of Information Communication Technology

(Common Paper)ATC/159423

ESTHER WANJIKU WAINAINADonor: KASNEB

Cost AccountingATC/159521

EUNICE NGINA MUSEMBIDonor: KASNEB

TaxationATC/151504

BENARD KIMUTAIDonor: KASNEB

AuditingATC/159117

PETER MAINA WAMBUGUDonor: KASNEB

BEST OVERALL IN A LEVEL

ATC Level IATC/157966

PETER OMONDI WANDERADonor: KASNEB

ATC Level IIATC/133554

MICHAEL MUNENE MUTHEEDonor: KASNEB

INFORMATION COMMUNICATION TECHNOLOGY TECHNICIANS

(ICTT) EXAMINATION

ICTT - LEVEL I

Introduction to Computing ICT/5953

RUTH RAKHMA KITASIDonor: KASNEB

Computer MathematicsICT/5669

KELVIN MURIITHI NJERUDonor: KASNEB

Computer Applications (Theory)ICT/5942

WALTER KWENA ODUORDonor: KASNEB

Computer Applications (Practical)ICT/6077

TERRY AGANI AMBANIDonor: KASNEB


PRIZE WINNERS

Computer NetworkingICT/5954

BONFACE KARANJA NJUGUNADonor: KASNEB

ICTT - LEVEL II

Internet SkillsICT/5642

DAVID CHOMBA KIMANIDonor: KASNEB

Computer Support and MaintenanceICT/5633

FRED OKONYA INGUTIADonor: KASNEB

Programming ConceptsICT/5077

JOSEPH MAINA MWANGIDonor: KASNEB

Information SystemsICT/5521

NELLY IRUSADonor: KASNEB


ICTT LEVEL IICT/6047

PAUL BICHANGA OMAEDonor: KASNEB

ICTT LEVEL IIICT/5540

ELIJAH THIMBA MUNGURIDonor: KASNEB

INVESTMENT AND SECURITIES TECHNICIANS (IST)

EXAMINATION

IST - LEVEL I

Finance and InvestmentsIST/324

KEVIN MUIRURI KAGWAIDonor: KASNEB

Financial Institutions and MarketsIST/324


Law and Regulations Governing Financial Markets

IST/324KEVIN MUIRURI KAGWAI

Donor: KASNEB

IST - LEVEL II

Securities Analysis and ValuationIST/319

GILBERT KIPROTICHDonor: KASNEB

Wealth Creation and ManagementIST/319



IST LEVEL IIST/324


IST LEVEL IIIST/319


CREDIT MANAGEMENT TECHNICIANS (CMT)

EXAMINATION

CMT - LEVEL I

Fundamentals of Credit ManagementCMT/1087

JANE MUKAMI GUANDARUDonor: KASNEB

Runner up

Fundamentals of Credit Management (Common Paper)

CMT/1054FELIX KIOKO KAVEMBA

Donor: KASNEB

CMT - LEVEL II

Economics (Common paper)

CMT/1057BEATRICE NJOKI WANJAU

Donor: KASNEB

Marketing and Customer RelationsCMT/1057

BEATRICE NJOKI WANJAUDonor: KASNEB

Foundations of Accounting (Common paper)

CMT/1066GRACE WANJIRU MUNDIA

Donor: KASNEB

Law Governing Credit PracticeCMT/1057



PRIZE WINNERS


CMT LEVEL ICMT/1087

JANE MUKAMI GUANDARUDonor: KASNEB

CMT LEVEL IICMT/1057


CERTIFIED PUBLIC ACCOUNTANTS (CPA)

EXAMINATION

CPA PART I – SECTION 1

Financial AccountingNAC/248194

LORNA SIDI BIRYADonor: ERNST & YOUNG

Runner up

Financial Accounting NAC/249217

KULTHUM NASSIR ABDALLAHDonor: KASNEB

Introduction to Law (Common paper)NAC/241766

COSMAS MURETIDonor: KINYORI & ASSOCIATES

Entrepreneurship and Communication (Common paper)NAC/239443

MAUREEN NJERI KAHARIDonor: KING’ANG’I KAMAU & COMPANY CERTIFIED PUBLIC

ACCOUNTANTS

CPA PART I – SECTION 2

Economics (Common paper)NAC/245299

CLEOPHAS ONGERI NYABEGIDonor: WACHIRA IRUNGU &

ASSOCIATES

Cost AccountingNAC/250938

ELISHA LUGWE MASHUDDonor: MUGO & COMPANY CERTIFIED

PUBLIC ACCOUNTANTS

Auditing and AssuranceNAC/233812

JAMES MULE MULEIDonor: CARR STANYER GITAU &

COMPANY

BEST OVERALL IN SECTION(S)

SECTION 1 ONLYNAC/247388

MERCY ANYANGO OCHIENGDonor: RSM ASHVIR


CHARLES THUO NDUNG’UDonor: RSM ASHVIR

SECTIONS 1 AND 2 (COMBINED)NAC/243068

FLORENCE INYINGI MAKENADonor: RSM ASHVIR

CPA PART II – SECTION 3

Financial Management (Common paper)NAC/235202

GEORGE NJUGUNA NJUBIDonor: KIGO NJENGA & COMPANY CERTIFIED PUBLIC ACCOUNTANTS

(KENYA)

Financial ReportingNAC/99472

LABAN BULUMA OKOTSIDonor: PRICEWATERHOUSE COOPERS

CERTIFIED PUBLIC ACCOUNTANTS

CPA PART II – SECTION 4

TaxationNAC/234568

JOSEPH KAIGE NDUNGUDonor: PKF KENYA

Company Law (Common paper)NAC/174280

STEPHEN MUSYOKA BERNARDDonor: KASNEB

Runner up

Company Law (Common paper)NAC/215556

PATRICK MUTUKAA KILONZIDonor: KASNEB

Quantitative Analysis (Common paper)NAC/147879

ALICE MURUGI WANYIRIDonor: MHASIBU SACCO LIMITED

BEST OVERALL IN SECTION (S)


BONFACE WAFULA WANDERADonor: MAZARS CERTIFIED PUBLIC

ACCOUNTANTS (KENYA)


THOMAS MUIA MWENDWADonor: H. W. GICHOHI & COMPANY


PRIZE WINNERS


JUDITH MORANGI MARANGADonor: MBAYA & ASSOCIATES

CPA PART III – SECTION 5

Principles and Practice of Management (Common paper)NAC/207569

ESTHER NANJALA MAYOKADonor: KASNEB

Runner up (1)

Principles and Practice of Management (Common paper)NAC/140314

EVANS K. OMAMBIA ONDIEKIDonor: KASNEB

Runner up (2)

Principles and Practice of ManagementNAC/215519

GLADYS JEPKORIR CHELANG’ADonor: KASNEB

Management AccountingNAC/201069

PATRICIA GRACE WANJIKUDonor: KPMG KENYA

Advanced Financial ManagementNAC/234865

VICTORIA WANJIKU KAMAUDonor: DELOITTE & TOUCHE

CPA PART III – SECTION 6

Advanced TaxationNAC/106707

JOSEPH KAMAU MWAURADonor: PKF KENYA

Advanced Auditing and AssuranceNAC/76777

JOHNBOSCO SIMON MBUVI MULU

Donor: PRICEWATERHOUSE COOPERS CERTIFIED PUBLIC ACCOUNTANTS

Advanced Financial ReportingNAC/189120

MUTHEMBWA JOHN MWANGANGI

Donor: MURDOCH McCRAE & SMITH



JOHN NJENGA MUCHUNUDonor: INSTITUTE OF CERTIFIED

PUBLIC ACCOUNTANTS OF KENYA (ICPAK)


SAMSON KIBUGI MUIRURIDonor: KASNEB


VALERIE NYAGUTHII KARURUDonor: INSTITUTE OF CERTIFIED

PUBLIC ACCOUNTANTS OF KENYA (ICPAK)

BEST LADY GRADUATENAC/153443

VALERIE NYAGUTHII KARURUDonor: ASSOCIATION OF WOMEN ACCOUNTANTS OF KENYA (AWAK)

CERTIFIED PUBLIC SECRETARIES (CPS) EXAMINATION

CPS PART I – SECTION 1

Organisational BehaviourNSC/246917

MARIA CHEBETDonor: PARKER RANDALL

Runner up

Organisational BehaviourNSC/98460

PATRICK MWAI KARIUKIDonor: KASNEB

Communication and Report WritingNSC/236135

STEPHEN KIBUNJA GITAUDonor: VISION INSTITUTE OF

PROFESSIONALS

CPS PART I – SECTION 2

Financial Accounting (Common paper)NSC/226499

JESCAH CHEPKIRUIDonor: KASNEB

Taxation Theory and Practice (Common paper)NSC/244252

LENAH CHELANGAT

KINYORI & ASSOCIATES

Runner up

Taxation Theory and Practice (Common paper)NSC/244675

DANIEL NJUGUNA GITAUDonor: KASNEB


PRIZE WINNERS


SECTION 1 ONLYNSC/246108

MAGDALENE GATHONI NJUEINIDonor: INSTITUTE OF CERTIFIED

PUBLIC SECRETARIES OF KENYA (ICPSK)

Runner up (1)


WILLIAM KIEMA SAMMYDonor: KASNEB

Runner up (2) SECTION 1 ONLYNSC/246652

RACHEL NYAMBURA KOINANGEDonor: KASNEB


JESCAH CHEPKIRUIDonor: KASNEB

SECTIONS 1 AND 2 (COMBINED)NSC/248807

DERRICK KARINGA NDUNG’UDonor: KASNEB

CPS PART II – SECTION 3

Company Secretarial PracticeNSC/158324

NAOMI WARINGA KIUNADonor: NGURU MUREGI & ASSOCIATES

CPS PART II – SECTION 4

EntrepreneurshipNSC/220614

GLORIA ROBBAI KHAFAFADonor: KASNEB

Company Law (CPS only)

NSC/237578CONSOLATA MWIKALI VUNDI

Donor: AFRICA REGISTRARS CERTIFIED PUBLIC SECRETARIES

Meetings - Law and ProcedureNSC/237578

CONSOLATA MWIKALI VUNDIDonor: QUANTUM REGISTRARS



CONSOLATA MWIKALI VUNDIDonor: KASNEB





CPS PART III – SECTION 5

Advanced Company Secretarial Practice

NSC/137230ISAAC OMEKE MIENCHA

Donor: H.W. GICHOHI & COMPANY

Runner up

Advanced Company Secretarial Practice

NSC/221890CONSOLATA CHEPCHIRCHIR

ARUSEIDonor: KASNEB

Project Planning and Management (Common paper)NSC/239081

GEORGE GIKAMA MUTHONIDonor: KASNEB

CPS PART III – SECTION 6

Strategic ManagementNSC/197832

WINNIE MUSIVI MUEDonor: KASNEB

Strategic Human Resources Management

NSC/228419SALLY WANJIRU GITAU

Donor: SAVANNA & ASSOCIATES

Corporate Governance and EthicsNSC/206998

MAUREEN JEROTICH KOECHDonor: KIMANI KERRETS & COMPANY



ISAAC OMEKE MIENCHA Donor: INSTITUTE OF CERTIFIED

PUBLIC SECRETARIES OF KENYA (ICPSK)

Runner up


MONICA NASICHE MUNYENDODonor: KASNEB


WINNIE MUSIVI MUEDonor: AXIS KENYA


PRIZE WINNERS


SAMWEL KIMANI NJOGUDonor: KASNEB

BEST LADY GRADUATENSC/226611

SUSAN KEMUNTO AKORADonor: CATHERINE MUSAKALI

CERTIFIED INFORMATION COMMUNICATION

TECHNOLOGISTS (CICT) EXAMINATION

CICT PART I - SECTION 1

Introduction to ComputingCTP/2339

TONIDA NJELI BARAZADonor: KASNEB

Computer Applications (Theory)CTP/2229

GIBSON GITHAIGA MAINADonor: KASNEB

Computer Applications (Practical)CTP/2438

WINFRED WAIRIMU MURIUKIDonor: KASNEB

CICT PART I - SECTION 2

Operating Systems (Theory)

CTP/2251LILIAN MUHONJA ODUNGA

Donor: KASNEB

Operating Systems (Practical)

CTP/2250NICODEMUS SABURE

MWIKWABEDonor: KASNEB

Computer Support and MaintenanceCTP/1841

KIPKOECH FESTUS LANGATDonor: KASNEB


SECTION 1 ONLYCTP/2270

CYRUS BETT CHELUGETDonor: KASNEB

SECTION 2 ONLYDonor: CTP/2145

GEOFFREY CHEGE MUTHONIDonor: KASNEB

CICT PART II - SECTION 3

Database SystemsCTP/1696

WILLIAM KAHARE MATENJWADonor: KASNEB

Structured ProgrammingCTP/1552

MWENDWA DANSON MUGAMBIDonor: KASNEB

Systems Analysis and DesignCTP/1075

DUNCAN NDIITHI WACHIRADonor: KASNEB

CICT PART II - SECTION 4

Object Oriented ProgrammingCTP/1822

JOAN KHANDASI KELENGWEDonor: KASNEB

Data Communication and Computer Networks (Theory)

CTP/1822JOAN KHANDASI KELENGWE

Donor: KASNEB

Data Communication and Computer Networks (Practical)

CTP/1548MWENDWA BRIAN KIMONDIU

Donor: KASNEB

Systems Security, Professional Values and Ethics

CTP/1822JOAN KHANDASI KELENGWE

Donor: KASNEB



DUNCAN NDIITHI WACHIRADonor: KASNEB


JOAN KHANDASI KELENGWEDonor: KASNEB

SECTIONS 3 AND 4 (COMBINED)CTP/1552

MWENDWA DANSON MUGAMBIDonor: KASNEB

CICT PART III - SECTION 5

Software EngineeringCTP/1317

KEN JOSEPH MBUKIDonor: KASNEB


PRIZE WINNERS

CICT PART III – SECTION 6

Information Systems ManagementCTP/1815

STEPHEN JAMES MAINGIDonor: KASNEB

Web Design, Internet Programming and e-Commerce

CTP/856BENJAMIN KARIUKI MUYA

Donor: KASNEB

Research MethodsCTP/1223

ERICK KIMUTAI BETTDonor: KASNEB



KEN JOSEPH MBUKIDonor: KASNEB


TERESIAH NJERI KIRIETHEDonor: KASNEB

SECTIONS 5 AND 6 (COMBINED)CTP/1223

ERICK KIMUTAI BETTDonor: KASNEB

CERTIFIED SECURITIES AND INVESTMENT ANALYSTS (CSIA)

EXAMINATION

CSIA PART I – SECTION 1

Financial MathematicsISP/4059

CHEPNGENO JOYCE KILEL Donor: KASNEB

Financial Institutions and MarketsISP/3343

FESTUS KIPROP RUTTODonor: KASNEB


SECTION 1 ONLYISP/3960

ELI SAYIANKA SEMPELEDonor: KASNEB


PAUL BIKUNDO ONGUSODonor: KASNEB

SECTIONS 1 AND 2 (COMBINED)ISP/4038

MAUREEN ANYANGO OTUOMADonor: INSTITUTE OF CERTIFIED

INVESTMENT AND FINANCIAL ANALYSTS (ICIFA)

CSIA PART II – SECTION 3

Management Information Systems (Common paper)

ISP/3790JOSHUA KILONZO MUTUKU

Donor: DELOITTE & TOUCHE

Financial Statements AnalysisISP/3790

JOSHUA KILONZO MUTUKUDonor: KASNEB

CSIA PART II – SECTION 4

Advanced Finance, Investment and Equity Analysis

ISP/3968DICKSON KIMANI MUCHERU

Donor: KASNEB


ISP/3845LEONARD MWANGI MUKURU

Donor: KASNEB

Runner up


ISP/3837LYNN NANYINGI NAMWAMBAH

Donor: KASNEB



JOSHUA KILONZO MUTUKUDonor: KASNEB


BETHWEL KIPRUTO BUNGEYDonor: KASNEB


JOSHUA KILONZO MUTUKUDonor: INSTITUTE OF CERTIFIED


CSIA PART III – SECTION 5

Valuation and Analysis of Fixed Income InstrumentsISP/3026

BERNARD KIPKOGEI KIBETDonor: KASNEB

Runner up

Valuation and Analysis of Fixed Income InstrumentsISP/3466

PAUL WANGAI KINANIDonor: KASNEB

Asset ManagementISP/3099

VICTOR MAMBO ICHWARADonor: DR. JONAH K. AIYABEI

Runner up Asset Management

ISP/3353NANCY NYAGUTHII WACHIRA

Donor: KASNEB

CSIA PART III – SECTION 6

Portfolio ManagementISP/1363

STEPHEN MAKAU JAMESDonor: DR. GEORGE O. WAKAH


PRIZE WINNERS

International FinanceISP/1363

STEPHEN MAKAU JAMESDonor: KASNEB

Valuation and Analysis of DerivativesISP/3326

MERCY WAITHIRA KAMAUDonor: KASNEB



BERNARD KIPKOGEI KIBETDonor: INSTITUTE OF CERTIFIED



STEPHEN MAKAU JAMESDonor: INSTITUTE OF CERTIFIED



DANVAS KIRIAMA MONG’AREDonor: DR. GEORGE O. WAKAH

CERTIFIED CREDIT PROFESSIONALS (CCP)

EXAMINATION

CCP PART I – SECTION 1

Credit ManagementCCP/1492

JOSHUA BOSIRE MOMANYIDonor: INSTITUTE OF CREDIT

MANAGEMENT (ICM)


SECTION 1 ONLYCCP/2102

STEPHEN WACHIRA GITINDIDonor: KASNEB


ISAAC KIRUI KIPRONODonor: KASNEB

SECTIONS 1 AND 2 (COMBINED)CCP/2102

STEPHEN WACHIRA GITINDIDonor: KASNEB

CCP PART II – SECTION 3

Advanced Credit ManagementCCP/1787

ELIJAH NYAMBOKI MONG’AREDonor: INSTITUTE OF CREDIT

MANAGEMENT (ICM)

CCP PART II – SECTION 4

MarketingCCP/2104

MOSES KAMAU WAWERUDonor: KASNEB



ANITA MORAA OMARIDonor: KASNEB


ANITA MORAA OMARIDonor: KASNEB


ANITA MORAA OMARIKASNEB

CCP PART III – SECTION 5

Public RelationsCCP/1917

WILLIAM CHARLES NAMWAKIRADonor: KASNEB

Runner upPublic Relations

CCP/1406SAMUEL MACHARIA MURIMI

Donor: KASNEB

Law Governing Credit PracticeCCP/1791

EMMA MWIKALI KIMATUDonor: KASNEB

CCP PART III – SECTION 6

Debt RecoveryCCP/1924

PAUL OGOORA MWITADonor: KASNEB

Corporate LendingCCP/1924


Practice of Credit ManagementCCP/1808

ANTONY CHEGE KARIUKIDonor: KASNEB



ROBERT NDWIGA KAGANEDonor: KASNEB





BEST LADY GRADUATECCP/1408

MILCAH WANJA NJENGADonor: KASNEB


Across

1 Market force led by consumers7 Overheads Absorption Rate

(abbreviation)8 Liabilities11 Amount paid to acquire an asset12 Part earning of a firm that is paid

to shareholders14 A sheet used to record financial

position of an entity16 Unit ownership in a company17 Authority that collects revenue

on behalf of the government of Kenya

20 When a private company issues shares to the public for the first time

21 Deliberate mistakes in financial records

24 In statistics the middle value of a series of values

25 A portfolio that provides the greatest expected return for a given level of risk

26 An institution that accepts deposits and lends out money

27 To appropriate retained earnings

28 One of the two columns of an account

29 An unsecured debt instrument issued by corporate entities

Down

2 Quantity to be purchased to minimize total cost

3 Review of records to verify accuracy

4 Internal constitution of a company

5 Owner’s equity in a business

6 English economist who advocated for monetary and fiscal policies

9 Summary of intended expenditure

10 Organisation that regulates activities of accountants in Kenya

13 International accounting standards (abbreviation)

15 Accounting method that records incomes when they are earned

18 Act of minimizing tax liability19 What is done to costs of running

an entity 22 Unit measure of utility23 Goods subject to VAT

Crossword puzzle Answers to puzzle published in the last issue of KASNEB Newsline

Prep

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stud

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