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Cost Classification Shifting on Earnings Predictability of Listed Firms in Kenya

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  • Ndungu Beatrice Wanjiru

    (Tutorial Fellow, School of Business Economics and Humanities, Mama Ngina University College)

  • Tobias Olweny

    (School of Business and Economics, Jomo Kenyatta University of Agriculture and Technology, Kenya)

  • Gordon Opuodho

    (School of Business and Economics, Jomo Kenyatta University of Agriculture and Technology, Kenya)

Abstract

Purpose: Cost classification shifting is a key managerial accounting practice that influences the predictability of earnings in listed firms. This study examines how cost classification shifting impacts earnings predictability among firms listed on the Kenya Methodology: This research utilizes panel regression analysis to examine how reclassifying costs affects the predictability of earnings, and the findings indicate a significant inverse relationship between the two. Sales, Selling general and Administrative costs as well as share price and Earnings per share data was collected for a purposive sample of 50 firms in listed in Kenya between 2010 and 2022 Findings: The overall firms analysis revealed a significant negative correlation between cost classification shifting and earnings predictability (r = -0.296, p

Suggested Citation

  • Ndungu Beatrice Wanjiru & Tobias Olweny & Gordon Opuodho, 2025. "Cost Classification Shifting on Earnings Predictability of Listed Firms in Kenya," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(6), pages 3938-3949, June.
    • Handle: RePEc:bcp:journl:v:9:y:2025:issue-6:p:3938-3949
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