Effect of Financial Fraud Management Practices on Profitability of State Corporations in Kenya

Abstract

Lately series of fraud both in the public division and the private area of the economy have been uncovered. The violations are without uncertainty executed under the supervision of the inside reviewers of the association. False monetary announcing can destabilize adequacy of money related revealing of legitimate establishments. Along these lines, there is have to embrace measures to avoid extortion. This specific examination hence explored the impact of money related misrepresentation the executives rehearses on execution of state partnerships in Kenya. The investigation was additionally guided by the accompanying explicit goals; to look at the fakes confronting state enterprises in Kenya, to set up the misrepresentation the executives rehearses utilized by state organizations in Kenya and to decide the impact of monetary extortion the board rehearses on productivity of state partnerships in Kenya. The specialist utilized expressive research design. The study used census sampling to select one senior personnel from department dealing with fraud management as they were in a good stead of offering the most informed response on the same. The sample size was therefore 27 respondents from state corporations in Kenya. The findings show that common frauds were concealing material statements, demand draft fraud rogue traders and manipulating records, forged or fraudulent documents, increasing vendor invoices and inconsistent overtime hours for a cost center. The study established that commonly applied in employee and third-party screening included job rotation, internal audit and security checks. There is also use of conducting internal investigation, surprise audits and progressive sanctions. The government should put measures that ensure that employees working in state corporations get to know the consequences of engaging in fraudulent activities. Employees should be encouraged to report fraud cases in a confidential way such as remaining anonymous even to the officer he/she is reporting to. Therefore, mechanisms such as using a third party to relay the information should be encouraged. the study came across limitations like limited time set aside for the research and the limited scope of study and Respondents reluctancy due to fear that the information may be used negatively against them for instance to intimidate them or provide an unwanted image concerning the firms. the study however had further suggestion for research like a study on the challenges facing fraud management practices on profitability should be undertaken.