1st Floor, Le’Mac Building, Westlands, Nairobi
Suite 401, Motorwalla Building, Mombasa

+254 703 899 606 · info@adamjeeauditors.com

Industries

Audit firm in Kenya for manufacturers & traders

Partner-led audit, tax and accounting for manufacturers, importers, exporters and distributors, from our offices in Nairobi and Mombasa.

Adamjee Auditors is an audit firm in Kenya working with manufacturers, importers, exporters and distributors, from offices in Nairobi's Westlands and in Mombasa.

In these businesses the figures that matter most sit in the warehouse and on the factory floor. Inventory is often one of the largest assets on the balance sheet, and the way it is counted and valued flows straight into cost of sales, gross profit and tax. Add capital-intensive plant, imported inputs cleared through customs and, for some, related parties abroad, and the audit, tax and accounting questions become specific to the sector.

We carry out statutory and internal audits to ISA and IFRS, prepare and file corporate tax, VAT, PAYE and withholding returns, keep books and management accounts, and run payroll. Members of our team bring experience across manufacturing, FMCG, logistics and retail, and as a member firm of SFAI Global, a network in 115+ countries, we can support groups that trade across borders.

Sector challenges

Where manufacturers and traders need closest attention

01

Inventory that stands up at year end

IAS 2 requires inventory at the lower of cost and net realisable value, with import duties, transport, handling, production labour and manufacturing overheads included in cost. The cost formula, such as FIFO or weighted average, has to be applied consistently, and small valuation errors can misstate profit and tax.

02

Production costing

Manufacturers need to track direct materials, labour allocation, overhead absorption rates and cost per unit. Weak cost accounting leads to incorrect pricing decisions, while inventory shrinkage, waste and scrap, and production inefficiencies are risks particular to the factory floor.

03

Capital spend and tax allowances

Investment deductions, industrial building allowances and wear and tear allowances reward investment in plant, but misclassified assets frequently trigger KRA adjustments. IFRS depreciation and tax capital allowances also differ, which creates timing differences and deferred tax to track.

04

Imports, customs and eTIMS

Clearing goods means accounting for import duty, the Import Declaration Fee, the Railway Development Levy and VAT, where wrong tariff classification can mean overpayment or fines. Since 1 January 2026, expenses not supported by valid eTIMS invoices may be disallowed during tax assessments.

How we help

Services for manufacturers and traders

01

Statutory and internal audit

Statutory and external audits that end in a clear opinion on your financial statements, and internal audits of controls, risk and processes for management, under a risk-based methodology aligned to ISA and IFRS.

Audit & Assurance →

02

Tax compliance and transfer pricing

Corporate tax, VAT, PAYE and withholding returns filed with KRA, eTIMS registration and integration, tax health checks, and cross-border advice on transfer pricing and double tax treaties.

Tax Compliance →

03

Accounting and bookkeeping

Day-to-day bookkeeping and reconciliations, management accounts against budget, and IFRS-compliant annual financial statements ready for audit, lenders and regulatory submission.

Accounting Services →

04

Payroll

Monthly payroll for factory, warehouse and office staff, with PAYE, NSSF, SHIF and Housing Levy deducted and filed on time, plus annual returns.

Payroll →

05

CFO and business advisory

Part-time or interim financial leadership, cashflow forecasting, board reporting, process improvement and risk management for owners, directors and boards.

CFO & Business Advisory →

06

Group and consolidated reporting

Consolidated financial statements for groups with several subsidiaries, with intercompany transactions eliminated and uniform accounting policies applied.

Consolidated Reporting →

Further reading

From our articles

01

Choosing an audit firm for a manufacturing business

What sets a manufacturing audit apart, from cost accounting and inventory testing to factory-level controls.

02

Inventory valuation in Kenya: FIFO, weighted average and IAS 2

Which costs belong in inventory, how the cost formulas compare and why consistency matters.

03

The manufacturers' tax shield: investment deductions for expansion

Investment deductions, industrial building and wear and tear allowances, and the eTIMS evidence behind them.

04

Import duties and customs: clearing goods at Mombasa Port

Import duty, IDF, RDL and VAT on imports, and the records behind bonded warehousing.

05

Export Processing Zones: a tax guide for manufacturers

EPZ incentives, registration and the reporting needed to keep them.

06

Transfer pricing in Kenya: a compliance guide

Arm's length pricing, accepted methods and the documentation KRA expects for related-party trade.

Common questions

Manufacturing and trade questions, answered

Manufacturing audits differ from service-sector audits because they follow production cycles, raw material tracking, work-in-progress and the valuation of finished goods. The audit looks at the inventory valuation method in use (FIFO, weighted average or standard costing), how production costs are allocated, machine depreciation, waste and scrap, and factory-level controls, and includes physical verification of raw materials and finished goods.
IAS 2 Inventories requires inventory to be measured at the lower of cost and net realisable value. Cost includes the purchase price, import duties, transport and handling costs, direct production labour and manufacturing overheads; administrative expenses unrelated to production and selling costs are excluded. Whichever cost formula you use, such as FIFO or weighted average, it should be applied consistently from one period to the next.
Under the Income Tax Act, manufacturers can claim the Investment Deduction Allowance, Industrial Building Allowance and wear and tear allowances on qualifying assets. IFRS depreciation is not the tax deduction, so the fixed asset register should be kept alongside a separate tax schedule. Under the eTIMS rules in force from 1 January 2026, a capital asset not supported by a compliant eTIMS invoice may be disallowed as a capital claim during a KRA review.
Import duty is charged on the CIF value according to the tariff schedule. The Import Declaration Fee and the Railway Development Levy are also calculated on the CIF value, and VAT is then charged on the CIF value plus duty, IDF and RDL, with excise duty on certain goods. Correct tariff classification and eTIMS-compliant documentation help avoid disputes and delays at clearance.
Manufacturers must be registered with the Kenya EPZ Authority, and EPZ companies submit periodic reports to the EPZ Authority and KRA, including annual audited financial statements. They should reconcile imported materials, local inputs and export sales, and support expenses and revenues with eTIMS-compliant invoices, because poor documentation can lead to disallowed claims or lost incentives.
Yes. Kenya enforces transfer pricing under the Income Tax Act and the Transfer Pricing Rules (2006), aligned with OECD guidelines. Sales and purchases of goods with related entities must follow the arm's length principle and be supported by contemporaneous documentation. The resale price method is often used for distribution businesses and the cost plus method for manufacturing.

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