The Role of Forensic Accounting Services in Fraud Mitigation Among Kenyan Public Institutions a Case of Parastatals in Kenya

Abstract

The objective of the study was to determine the role of forensic accounting in mitigating fraud among Parastatals in Kenya. The data used in this study was collected from respondents using a semi-structured questionnaire. The collected data was coded and keyed into Statistical Package for Social Sciences and then analysed using tabulations, percentages, measures of central tendency and measures of dispersion such as means and standard deviations. Presentation of the study findings was done using frequency tables and figures. Regression and correlation analysis was used to test the strength of the relationship between forensic accounting and fraud mitigation among Parastatals in Kenya. The study concluded that all the parastatals in Kenya have a proactive fraud audit function, robust internal controls and litigation processes which help in fraud mitigation to a very great extent. The study also concludes that parastatals in Kenya have compliance policies, management override of controls and Segregation of duties help in fraud mitigation to a great extent. Dispute resolution impacts fraud mitigation only to a moderate extent. The study further concluded that there is a strong relationship (R= 0.867) between forensic accounting and fraud mitigation among parastatals in Kenya with forensic accounting accounts for 70.4% of the total variance in fraud mitigation among parastatals. Further, components of forensic accounting (proactive fraud audit, compliance with policies, robust internal controls, management override of controls, segregation of duties, dispute resolution and litigation support) have a positive and significant impact on fraud prevention and detection. The study recommends that these functions be implemented to the letter as this help public institutions in Kenya to detect and prevent fraud. The most faced limitation was that senior and middle level managers among the parastatals had very busy working schedules. This explains why most of the respondents were low level managers. However, the researcher made every effort to have the questionnaires filled by most of the respondents. That’s how a response rate of 84.91% was achieved. This study only focused on the role of forensic accounting in fraud mitigation among public institutions in Kenya. There is need for a similar study to be conducted among private institutions in Kenya so as to compare how both public and private institutions deal with the challenge of fraud.