Financial Factors Affecting Growth of Audit Firms in Kenya: A Survey of Audit Firms in Nairobi City County

Auditing firms increasingly face challenges when performing their work, with the challenges emanating from both the internal and external environment, thus causing deterred growth in the industry. Therefore this study focused on some selected internal factors which affect the growth of auditing firm. The specific objectives were to establish the effects of internal control and the effect of audit fee on audit firms growth in Kenya. The study applied descriptive research design. The population was 122 audit firms in Nairobi County given that Nairobi is the capital city of Kenya and the hub of business, many firms are located there. For sampling three cluster were identified, that is, large firms, medium firms and small firms based on the market share. From each of the cluster random sampling was adopted. Primary data was used for analysis, to describe the relationship between the study variables. The findings revealed that internal control and audit fee significant effect the growth of audit firms in Kenya. The regression results showed that all the variable had a positive significant effect on the growth of the firm. The correlation results indicated that there was a strong positive relationship between the independent variables and the dependent variable. Based on the finding, the study concluded that internal control and audit fee were major determinants on growth of audit firms in Kenya. The study recommended that the management of audit firms should put emphasis on audit internal control measure and audit fee when strategizing the growth of their firms as the two are key determinants to growth of a firm.