FORENSIC ACCOUNTING AS A TOOL FOR FRAUD DETECTION AND PREVENTION BY COMPANIES IN KENYA; A CASE STUDY OF COMPANIES IN NAIROBI COUNTY

Abstract

ABSTRACT The objective of the research was to determine the role of forensic accounting as a tool for fraud detection and prevention by companies in Kenya of which a case study of companies in Nairobi county was used. The specific objectives of the study were to identify the role of forensic ac-counting in fraud detection and prevention by companies in Kenya; to determine the forensic ac-counting techniques and services used and applied by companies in Nairobi county.The data used in the study were gathered through the use of questioning method in form of a semi structured questionnaire (open and close ended questions). The questionnaires were self-administered to several respondents, at the firms and later picked for data analysis. The collected data was coded and keyed into Statistical Package for Social Sciences and then analyzed using tabulations, percentages, measures of central tendency and measures of dispersion such as means and stan-dard deviation. The research findings were presented using frequency tables and figures. The ex-tent of relationship between tools of forensic accounting and fraud detection and prevention by companies in Nairobi County were tested using regression and correlation analysis. The research concluded that all companies in Nairobi Countyhave strong internal controls, segregation of du-ties, regular fraud audit and compliance policies which help in fraud detection and prevention to a high extent. It further concluded that a strong relationship (R=0.892) existed between tools of forensic accounting and fraud detection and prevention by companies in Nairobi county of which forensic accounting accounts for 79.0% of the total variance in fraud detection and prevention by companies in Nairobi county, Kenya. A conclusion was also made that components of forensic accounting that is strong internal controls, segregation of duties, regular fraud audit and adhe-rence to organizational policies have a positive and reasonable impact on fraud detection and prevention. This study recommended that forensic accounting tools be implemented by compa-nies in Kenya as this helps in fraud detection and prevention.