Risk Assessment, Fraud Detection and Prevention; Empirical Evidence from University of Eldoret, Kenya

Internal controls help the institution to understand the organization’s structure, work, and authority flows. They are designed to provide reasonable assurance regarding the achievement of operational objectives. Cases of fraud have significantly increased in public universities due to weakness of internal controls functions. The study was conducted in order to determine the relationship between risk assessment. This study was founded on prospect theory. Descriptive survey research design was used. Target population was accountants and internal auditors, the accessible population had involve 34 accountants and internal auditors at the University of Eldoret. A pilot study was conducted in order to test the validity and reliability of the research questionnaire. Content validity was used as a validity test while reliability was tested using Cronbach’s alpha coefficient. The study used primary data. Primary data was collected using structured questionnaires. Both descriptive and inferential statistics was used for data analysis. Descriptive statistical tools included frequencies, percentages, means, variances, and standard deviations. Inferential statistics included Pearson’s Product Moment Correlation and multiple regression analysis. Findings revealed that risk assessment (β1 = 0.133; p < 0.05), positively and significantly influence fraud detection and prevention in the institution. It was concluded that adequate internal controls could reduce fraud detection prevention. The study recommends that decision making and understanding how risk influences decisions is imperative. The study further recommends that the governing body, possibly supported by the audit committee, should ensure that the internal control system is periodically monitored and evaluated. The study findings will guide the institution to reduce variance in budgets through better reporting and budgetary control measures that reduces cases of fraud. It is expected that the findings will improve on internal controls in the organization