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Kagiko & Associates-Accounting

Experts Financial & Accounting Consultancy. Primarily Book-keeping, Tax, & Payroll. Consult us today for Free! We offer value adding services to our clients.
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We help Accounting Professionals & Businesses manage their finances to ensure compliance with authorities and make sound financial decisions. Registered and Practicing CPAs, Business Advisory, Trainers and Consultants. Our services Include:
1. Book Keeping
2. Tax Advisory
3. Forensic Audit
4. Training

07/09/2026

https://Mshaharapro.com

07/09/2026

tax.kagikoassociates.com

05/09/2026

KASNEB CPA exam results are out.

Did the exams show you dust, or did you show the examiners dust?

If you passed, which section did you clear?

If you failed, which papers got you? And why do you think you failed them?

What lessons did you learn from this past sitting?

04/09/2026

tax.kagikoassociates.com

Starting Tuesday this week,

The second phase of implementation of the Finance Act 2026 kicked in.

There is one critical provision of the Act that was delayed to September to give importers time to adjust. It is now in force.

It requires that if you import goods into Kenya, you now need to keep the foreign export documents for those goods.

This means an importer must keep an export declaration, export entry, or customs export certificate issued by the right authority in the country where the goods were bought.

And these documents must contain:

• Exporter and importer names and addresses
• Description of the goods
• Value
• Quantity
• Tariff classification
• Date of exportation
• Reference number from the foreign customs authority

Then there is one extra thing.

These documents must be kept for at least 5 years from the date of importation.

And if KRA asks for them, you must produce them.

But what happens if you do not have the documentation?

KRA has been given the power to:

1. Reject your claims relating to the value of the goods, origin, cost or ownership of the goods.

2. Determine the customs value or tax liability itself using whatever information KRA has.

3. Impose penalties.

In other words, that little export document sitting somewhere in your supplier's country can become very important five years later.

As an importer, tighten your documentation to protect yourself.

Don't wait for KRA to ask for a document you should have kept from day one.

Good customs compliance starts long before the goods reach Kenya.

03/09/2026

Understanding What Clients Really Need

The Gap Between What Is Asked and What Is Required

Accountants are trained to deliver precision. Clients, however, rarely arrive with precise requests. They arrive with symptoms: a confusing report, a number that will not balance, a process that feels heavier than it should, or a quiet sense that something is not quite right.

The skill that separates good technical work from truly valuable support is the ability to recognise the difference between the question that is spoken and the need that sits underneath it.

What Clients Usually Say

Most client requests sound technical:

- “Can you fix this reconciliation?”
- “Why doesn’t this figure match?”
- “Can you prepare the schedules the way we usually do?”
- “I just need the correct balance.”

These are legitimate and necessary questions. Answering them correctly is the baseline of professional service. Yet stopping at the baseline often leaves the deeper issue untouched.

What Clients Often Mean

Behind many technical questions lie quieter concerns:

- “I need to understand this well enough to explain it.”
- “I need a process I can trust when no one is available to help.”
- “I need to feel confident that the method is sound, not merely that the answer is right.”
- “I need something that will still work next month, and the month after.”

Clients may not articulate these needs clearly. Sometimes they are not fully aware of them themselves. They experience friction, uncertainty, or dependence, and they translate that discomfort into a request for a correction or a file.

The accountant who only solves the stated problem may leave the client still uneasy. The accountant who solves the underlying need restores clarity and control.

Common Patterns Worth Noticing

Several recurring patterns signal that the real need runs deeper than the request:

- The same type of issue appears month after month.
- The client repeatedly asks for confirmation even after receiving a correct answer.
- Existing methods produce the right figures but create ongoing confusion.
- There is reluctance to take ownership of a process.
- Small differences or timing issues generate disproportionate anxiety.

These are not signs of incompetence. They are signs that the current approach, while functional, is not sustainable or transparent enough for the person who must live with it.

The Accountant’s Responsibility

Technical accuracy remains non-negotiable. Numbers must be correct. Controls must be observed. Professional standards must be upheld.

Beyond that baseline, the higher responsibility is to design solutions that the client can understand, maintain, and defend. This requires curiosity about how the client experiences the work, attention to the points of friction, and the discipline to build processes that reduce dependence rather than increase it.

A well-designed solution does more than produce the right figure. It reduces the mental load. It creates a clear audit trail of logic. It allows the client to move from “someone else fixed it” to “I know why this works.”

A Practical Orientation

When a client presents a problem, it is useful to hold two questions at once:

1. What is the correct technical answer?
2. What would allow this person to handle the next similar situation with greater confidence and less reliance?

The first question protects the integrity of the work. The second question protects the long-term relationship and the client’s professional standing.

Both matter. The best support answers them together.

Closing Thought

Clients do not only hire accountants for answers. They hire them for clarity, reliability, and the quiet assurance that the numbers can be trusted — and explained.

The most valuable work often begins after the correct figure has been found: in the decision to make the method as clear as the result.

02/09/2026

Here's Why Sacco Members Could lose at least Sh11.6 billion.

KUSCCO has been placed under voluntary liquidation.

But what exactly happened to the money?

Let me break it down simply.

First, what is KUSCCO?

KUSCCO was the umbrella body for Kenya’s Saccos.
It brought Saccos together.
Saccos could deposit money with it, borrow from it, get insurance, and receive training and support.

Many Saccos had serious money tied up there.

Then the problems started.

By 2026, KUSCCO owed about Sh17 billion.
Its recoverable assets were only about Sh5.4 billion.

That leaves a hole of roughly Sh11.6 billion.
This is the amount creditors — including Saccos — are likely to lose.

So why did KUSCCO collapse?

A PwC forensic audit uncovered serious issues: alleged fraud, theft, manipulated accounts, unexplained withdrawals, and conflicts of interest.

The audit found that KUSCCO’s books had been inflated by about Sh9.3 billion.
This made the organisation look healthier than it actually was.

Several former officials were later charged with fraud and theft. Those cases are still in court.

By 2026, KUSCCO could no longer operate without a massive cash injection.
Saccos refused to put in more money.

There were also hundreds of court cases from creditors trying to recover their funds — about 292 cases claiming Sh6.48 billion.

On 28 August 2026, KUSCCO members voted to voluntarily liquidate the organisation.

Simply put: KUSCCO will be wound up. Remaining assets will be sold or recovered.
Whatever is recovered will be shared among creditors.

But KUSCCO owes far more than it owns.
Some creditors will lose money.

This is where ordinary Sacco members feel the pain.

Saccos that lose money through KUSCCO may have to absorb those losses.
That can reduce dividends and returns paid to members.

Some Saccos had significant exposure:

- Balozi Sacco: Sh437 million
- Mhasibu Sacco: Sh408 million
- Kimisitu Sacco: Sh353 million
- Qona Sacco: Sh314 million

Important clarification: KUSCCO’s liquidation does *not* mean these Saccos are shutting down.
Individual Saccos can continue operating. They just have to account for the money they cannot recover from KUSCCO.

A new body called KEFESCO is being formed.
It will handle advocacy, training, research and consultancy.
It will *not* take over KUSCCO’s debts.

The big question now is simple:
How much money can actually be recovered from KUSCCO?

The more assets recovered, the smaller the final loss for the affected Saccos and their members.

01/09/2026

Welcome to September
tax.kagikoassociates.com

27/08/2026

When a Discount Is Really a Defect: Why Price Cuts Are Quality Reductions in Disguise

The Quiet Margin Killer Accountants See Every Day

Every accountant knows the exact moment a sales team "succeeds." They burst into the boardroom ringed in victory, popping figurative champagne over a smashing new promotion. Revenue is up! Units are flying off the shelves! The team is taking bows.

Then the monthly management accounts land on your desk.

You look at the numbers, run a quick check on your contribution margin, and sigh. The margin has quietly collapsed, the break-even point has shot into the stratosphere, and the bottom line is bleeding. When executive leadership asks what went wrong, sales usually blames "tough market conditions."

But accountants know the uncomfortable truth: a discount isn't just a clever commercial incentive. A price cut is mathematically identical to an operational failure on the factory floor.

The Shared DNA of Bad Pricing and Bad Manufacturing

In cost accounting, we tend to put operational waste and pricing strategy into two completely different mental buckets. Waste, spoilage, and defective units belong to the plant manager—that’s an operational failure. Discounts, rebates, and special offers belong to the commercial director—that’s just "marketing."

However, if you strip away the labels, both events do the exact same damage to your unit contribution margin:

The Discount Route: You sell a product for less money while spending the same amount on raw materials, direct labor, and overhead. Your unit margin shrinks.
The Defect Route:You sell the product for full price, but because of scrap or rework, you spent significantly more to produce that one sellable unit. Your unit margin shrinks by the exact same amount.

Whether you cut the selling price by $20 or throw $20 worth of ruined raw materials into the scrap heap, the end result for the business is identical. Both events mean you have to sell a mountain of extra units just to make the total profit you were originally supposed to earn standing still.

In fact, if you run a product with a modest 40% margin and hand out a 20% discount, you literally have to double your sales volume just to make the same dollar amount of profit. If the sales team doesn't double the output, the "successful campaign" actually destroyed shareholder value.

Why Every Accountant Should Care

Understanding this equivalence changes how the finance team interacts with the rest of the business:

1. Auditing the "Marketing Lift":The next time sales asks for a 15% discount across the board, don't just ask if it will drive volume. Ask them if they can guarantee the massive sales multiplier required to break even. If they can't, remind them they are asking permission to intentionally run a defective production line.
2. Unifying Your Variance Analysis:Price variances and yield variances aren't separate issues—they are economic siblings. A price drop is simply a variance in "revenue quality."
3. Reframing Board Reports:Instead of saying, "We offered a 15% promotional discount," try telling the board: "We voluntarily accepted the profit equivalent of a 22% increase in factory defect costs this quarter."Watch how quickly the conversation changes.
A Final Thought for the Finance Team

Quality control managers spend their entire careers fighting spoilage because every ruined unit raises the cost of every good unit that leaves the building. Finance teams need to fight undisciplined discounting with the exact same passion.

The numbers don't care whether margin was lost in a sales meeting or on an assembly line. A dollar of eroded margin is a dollar of eroded margin.

So the next time a shiny new promotional campaign lands on your desk, don't ask how many extra units it might move. Ask a much sharper question: "What defect rate are we voluntarily introducing into our margin structure today—and are we crazy enough to think we can sell our way out of it?"

24/08/2026

The System Do Not Like Questions

Once upon a time, not in some distant past, there lived a woman named Jacinta Mwatela.

She spent 32 long years inside the Central Bank of Kenya. She saw things. She questioned things. And according to what she has now told NTV, the system did not like questions.

Here is the story she has finally put on record.

*The Goldenberg chapter*

Mwatela says she started raising red flags on export compensation claims. The documents did not prove that any goods had actually left Kenya. One particular Swiss Air flight, Flight 285, kept appearing again and again as the carrier of these supposed exports. It looked suspicious even then.

Yet the payments continued.

Later, she says, Exchange Bank was created. Its purpose, in her view, was simple: to bypass the normal Central Bank procedures that would have stopped the money from flowing.

Then came the man treated like a king

Kamlesh Pattni, she says, would walk into her office without an appointment. He wanted her signature on Goldenberg-related compensation payments. She refused. The paperwork still did not prove the exports had taken place. She would not put her name on what she could not defend.

The refusals and the punishments

Documents kept landing on her desk. Incomplete. Unsupported. She was expected to sign. She declined. One particular import licence made no sense to her. She refused to endorse it. Shortly afterwards she was transferred out of the department.

This became a pattern. Question a decision, get moved. At one point Governor Micah Cheserem gave her six hours to clear her desk and sent her to bank supervision. The transfers, she believes, were designed to isolate the one person insisting on following the rules.

*The government borrowing its own money*

Five commercial banks had been appointed to collect customs duty on behalf of the government. Instead of remitting the money, she says, they used it to buy Treasury bills. In plain terms: the government collected revenue through the banks, then borrowed the same money back from those banks.

Charterhouse Bank

She discovered what she regarded as serious problems: alleged money laundering and misuse of customer deposits. Her conclusion was that the bank should be closed. She faced strong resistance when she tried to act on that conclusion.

Grand Regency Hotel

The hotel was held as collateral by the Central Bank. Kamlesh Pattni somehow found himself in the discussions about it. Mwatela questioned his presence. She insisted that the Central Bank be properly represented and that her disagreement be put on the official record.

*The currency-printing tender*

Irregularities appeared in a tender for printing Kenya’s currency. She refused to chair the tender committee meeting because, in her assessment, the process itself was against the law.

And finally, the documents

While she was already in court over Goldenberg-related matters, documents linked to the case were destroyed. She has asked the obvious question: why destroy evidence that was still relevant?

That is the account Jacinta Mwatela has now given after 32 years inside the institution.

Credit remains with NTV Kenya for documenting it.

The rest of the country can decide what to do with the story.

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