Kenya’s top financial regulators have launched a renewed campaign to compel both public and private sector entities to comply fully with International Financial Reporting Standards (IFRS) and International Public Sector Accounting Standards (IPSAS), signalling a shift toward stricter oversight as the country seeks to strengthen transparency, restore investor confidence and secure favourable global funding.
The initiative, anchored by promoters of the annual FiRe Award, including the Institute of Certified Public Accountants of Kenya (ICPAK), the Capital Markets Authority (CMA), the Nairobi Securities Exchange (NSE), the Retirement Benefits Authority (RBA) and the Public Sector Accounting Standards Board (PSASB) aims to accelerate Kenya’s alignment with globally recognised reporting benchmarks.
Regulators say the campaign marks a decisive response to mounting pressure from institutional investors demanding comparable, high-quality financial disclosures.
ICPAK CEO Dr Grace Kamau said adherence to international standards sits at the heart of good governance and national credibility.
“When institutions embrace transparent reporting, they not only safeguard stakeholders, but they also strengthen investor confidence and elevate Kenya’s standing as a market built on resilience and ethical leadership,” she said during the FiRe Award conference.
While IFRS is mandatory for all listed companies, financial institutions and government-owned entities, enforcement across the broader private sector remains inconsistent.
ICPAK noted that capacity building rather than strict penalties has historically dominated Kenya’s compliance approach, leaving a significant gap among thousands of SMEs, where accurate reporting remains low.
The result is an uneven financial reporting environment that regulators believe undermines broader economic ambitions, including Kenya’s goal of positioning Nairobi as East Africa’s premier financial hub.
PSASB CEO Georgina Muchai emphasized that rigorous application of IPSAS is essential for public accountability. “It is the non-negotiable investment needed to build citizen trust, secure favourable international funding, and ensure every shilling spent is tracked with precision,” she said.
Muchai added that adopting accrual accounting across public entities enhances transparency and ensures the principles of public finance envisioned in the Constitution are upheld.
Kenya plans to fully transition all public institutions to accrual-based IPSAS by 2028. Regulators warn that non-compliance will increasingly expose entities to higher sanctions, including adverse audit opinions, fines, trading suspensions or even delisting for listed firms.
CMA CEO Wycliffe Shamiah said the regulatory environment is shifting due to globalization, interconnected markets and rapid technological advancements, all of which demand timely and comparable disclosures.
Shamiah noted that the CMA will not hesitate to impose tougher consequences on firms that fail to comply with IFRS or IPSAS. “The goal is not punitive action, but acceleration of the adoption of global standards to mitigate domestic financial risks and ensure Kenya’s governance framework meets the expectations of international capital,” he said.
The NSE echoed this message, highlighting that sustained investor confidence hinges on high-quality reporting. NSE CEO Frank Mwiti said this year’s FiRe Award theme reflects “the accelerating global shift toward harmonized reporting frameworks and the growing need for organizations to align with internationally recognized standards.”
He added that compliance strengthens institutional credibility and reinforces the foundations of deep, efficient capital markets.
Regulators argue that uniform IFRS compliance is crucial for listed companies seeking to avoid market penalties, discounted valuations and reduced liquidity. For the public sector, failure to comply threatens the integrity of audits and jeopardizes access to concessional loans from global lenders such as the World Bank and the IMF.
RBA CEO Charles Machira stressed that in the pensions sector, accurate reporting is inseparable from public trust.
“The security of retirement savings is directly linked with the standards of transparency upheld by regulated entities,” he said, commending pension schemes that have demonstrated commitment to strong disclosure practices through the FiRe Award programme.
Machira said that financial reporting excellence is fundamental to ensuring that “every Kenyan can trust that their retirement savings are being managed with the highest level of integrity.”
With global investors increasingly scrutinizing governance and reporting quality before committing capital, industry leaders say Kenya’s heightened emphasis on IFRS and IPSAS comes at a pivotal moment.
Regulators believe that widespread adoption of global standards will help mitigate financial risks, support accountability, strengthen markets and position Kenya more competitively among emerging financial centres.
The FiRe Award promoters say this year’s intensified efforts highlight a shared recognition: that transparent reporting is not merely a regulatory requirement, but a strategic national asset.
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