Abstract:
The advent of globalization, information technology and highly dynamic operating
environment has increased the level of uncertainty in the performance of audit firms. It
has become important for small and medium sized audit firms to understand how, when
and with whom to network to improve on their performance and increase their market
share and worthiness of their firms. The general objective of this study was to evaluate
the effects of networking on performance of small and medium sized audit firms in
Nairobi Kenya. The specific objectives include: determining the effects of network
diversity on performance of small and medium sized audit firms in Nairobi Kenya;
establishing the effects of network size on performance of small and medium sized audit
firms in Nairobi Kenya; and establishing the effects of networking platforms on
performance of small and medium sized audit firms in Nairobi Kenya. The study adopted
a descriptive research design with a target population of 490 SMPs registered and
updated by ICPAK by May 2016. A sample of 147 SMPs was selected for the study. The
collected data was analyzed by use of frequency distributions, percentages, mean and
standard deviation and Regression analysis.The analyzed data was presented in the form
of tables and figures. From the findings of the study it was established that networking
has an effect on the performance of small and medium audit firms by affecting 24.6% of
business performance. The study established a positive significant relationship of network
diversity, network size and network platforms on business performance. This was
indicated with regression co-efficient of the variables. Thus the study concluded that
networking affects business performance of small and medium sized audit practitioners.
Additionally, the study concluded that network diversity, network size and network
platform impact business performance positively. The study recommends the need for
government and other stakeholders to improve the networking skills of small and medium
audit firms to improve their performance.