Forensic Accounting And Fraud Control In County Governments In Kenya: Evidence From Counties In Mt. Kenya Region

ABSTRACT

In the 21st century fraud is becoming an issue that top management of many organizations is struggling to control. Globally most companies do not admit they are vulnerable to fraud. Studies have shown that fraud can occur internally or externally and may involve employees, client or other relevant stakeholder’s in an organization. The result of past studies indicates that fraud can occur amidst policies, tools and models that have been put in place. In Kenya fraudulent acts have been witnessed almost in the entire sectors of economy. The purpose of the current study was to investigate and come up with conclusive results on how policies on forensic accounting, fraud management tools, degree of awareness on methods of forensic accounting and how application of skills on forensic accounting influenced fraud control in County Government in Kenya. Ten counties in Kenya were involved in the study and a total of 415 staff members were the target population. Pilot test was done within two other counties in Kenya not included in the final study. Descriptive research design was used with quantitative and qualitative data applied for analyses. Inferential statistics were obtained from regression analysis which entailed normality test, multicollinearity test, model fitness, model specification and test of hypothesis done at 95% confidence level. These assisted in making the decision on whether to reject or accept null hypotheses. All the study’s null hypotheses were rejected. Forensic accounting skills was the resilient variable followed by fraud management tools, forensic accounting policies and the least was the level of awareness on methods of forensic accounting. The conclusions were based on the study findings and recommendations derived. The research established that policies on forensic accounting were not properly enforced by county government employees to fight threat of fraud. County governments requires to be vigilant in reporting cases of fraud as the study concluded that reporting of the cases could be hampered by lack of fraud control plan and inefficient fraud reporting mechanism. Another important conclusion was that county governments should incorporate external fraud experts to deter perpetration of fraud. Likewise, reporting of incidences of fraud has not been very effective in many organizations across the globe; therefore, additional study can be done to establish whether fraud reporting policy can assist in eradication of fraud incidences as the management improve on use of traditional and modern tools to detect and prevent fraud. The study, recommend that accounting experts and consumers needs more information on the importance of forensic accounting and how it can be used to eradicate fraud.