Internal audit practices and fraud management in selected quoted companies in kenya ( a case study in state entities )

Abstract

Despite the fact that the majority of internal audit departments in many firms have embraced fraud management strategies, fraud is still common and is still reported. The issue of fraud, in all of its manifestations, including corruption, asset theft, and fake financial reporting, records a persistent upward trend In all nations, industries, and sectors. Fraud is a growing issue that affects both public and private enterprises. The first step in combating the fraud problem is for organizations to become aware that fraud does occur and that there is a strict requirement to proactively manage fraud. This awareness comes before the regulatory environment and the supervision authorities' monitoring. This study set out to determine the degree to which internal audit procedures support effective fraud management in Kenyan state corporations. All Kenyan state enterprises were the target population; The state corporations that were the subject of the investigation were sampled randomly. Data was gathered using structured questionnaires, which were later coded and analysed. 33 of the 40 state companies that were sampled for the study responded, yielding an 82.5% response rate. Fraud policy had a combined mean of 3.19, a standard deviation of 1.072, Periodic evaluation of fraud exposure had a mean of 3.13, standard deviation of 1.1.0, variance of 1.217, and a Pearson chi-square statistic of 0.582. Fraud prevention had a mean of 2.92, standard deviation of 1.1.0, variance of 1.217, and a Pearson chi-square statistic of 0.582. Fraud detection had a mean of 2.93, a standard deviation of 0.912, a variance of 0.832, and a Pearson chi-square statistic of 0.005. standard deviation of 0.956, a variance of 0.915, and a Pearson chi-square statistic of 0.319. The study comes to the conclusion that effective fraud management in Kenyan state enterprises depends on internal audit processes, a fraud policy, periodic assessments of fraud exposure, fraud prevention, and fraud detection. a variance of 1.149, and a Pearson Chi-Square value of 0.001 according to the researcher; In order to facilitate internal audit in the company, the researcher advises State firms to tighten their measures and promote fraud policy as one of their major governance policies. To guarantee effective fraud management; In order to promote internal audit and increase the likelihood that the institution will be successful at managing its fraud state corporations are required to analyze and assess the organization's exposure to fraud on a regular basis. State corporations are also required to put in place the necessary fraud prevention measures to support effective and efficient internal audit. Last but not least, state businesses need to evaluate their entire internal and external environments to aid in fraud detection and allow them to manage and report a successful fraud management.