Impact Of Forensic Accounting Practices On Fraud Detection And Prevention Among Deposit Taking Saccos In Nairobi County

Abstract

The study’s objective was to establish the impact of Forensic accounting practices on fraud detection and prevention among Deposit taking SACCOs in Nairobi County. The study was guided by forensic accounting practices that comprised of litigation support, fraud investigation, and dispute resolution. Fraud Triangle theory, Rational Choice Theory, and Routine Activity Theory guided the study in building theoretical constructs. Both cross sectional survey and descriptive research design was adopted in this study aimed at describing the current affairs as they exist and entailed data collection which was used to draw conclusions. The population constituted of 42 deposit taking SACCOs that have been operational within Nairobi County as at December 2018. Census technique was applied to solicit data from the entire population since the population was relatively small and accessible. The study collected data from 37 deposit taking SACCOs out of 42. A structured questionnaire was used in data collection through a drop and pick approach. Both inferential and descriptive statistics were employed in data analysis, where descriptive statistics encompassed frequencies and percentages, while inferential statistics encompassed use of multiple linear regression. Analysis of collected data established that forensic accounting practices have a moderate and positive impact relation on fraud detection and prevention among deposit taking SACCOs in Nairobi County (p<.05). Litigation support has a statically significant relationship with fraud detection and prevention (P< .05). The study established that fraud investigation and dispute resolution impacts fraud detection and prevention although the relationship was not statistically significant (p>.05). The study recommends that Deposit Taking SACCOs in Nairobi County should leverage litigation support with a view of detecting and preventing fraud since the approach enhances discovery of information through document examination to unearth important facts, which will aid fraud detection and eventual prevention. Further research should be done to determine how other factors such as Strong Internal Controls, Fraud risk assessment strategy, Organizational Culture and adoption of technology may impact fraud detection and prevention since forensic accounting practices considered in this study explained a positive significant impact of only 28.5%.