Sang, Mercy Jepkorir
Abstract: The purpose of the study was to examine the determinants of fraud measures in selected commercial banks in Nakuru Town. The objectives of the study were to assess the measures put in place at these banks to mitigate fraud and examine the effectiveness of the internal control measures on fraud occurrence. The study was guided by the fraud triangle theory, the fraud scale theory and the agency theory. The study was based on descriptive research design. Sampling was done through stratified sampling design. Data was collected using questionnaires and analysed by using both descriptive and inferential statistics. The descriptive statistics used included the standard deviation, means and frequencies. The inferential statistics included chi square and linear regression. The study concluded that among the measures put in place to detect and mitigate fraud in commercial banks in Nakuru Town included daily checks (24.4 %), weekly tests (24.4 %), monthly checks (29.5 %), and periodic tests (33.3 %), dual control checks (19.2 %), physical restriction of access to sensitive areas (46.2 %) and limitation to access to information systems (33.3 %). The study has also concluded that the effectiveness of the internal control measures was undermined by non adherence to dual control aspects (21.8 %) and lack of sufficient time to undertake the various periodic tests diligently (7.7 %). The study recommended establishment of comprehensive fraud mitigating measures against external frauds at the cashiers departments, more enforcement of compliance of fraud mitigation methods, an increase in staff numbers in key operational areas and lifestyle audits among the bankers to detect fraud occurrences among bankers.
Keywords: Fraud, Funds Diversion, Internal Controls, Tax Evasion