The impact of forensic accounting services on fraud detection and prevention among Commercial Banks in Kenya

Abstract

Fraudulent practices in Kenyan banks have led to increased losses and collapse of commercial banks, hence the need to use forensic accounting services to detect and prevent such fraudulent activities. The banking industry is a very important institution with many internal controls in order to overcome the fraudulent practices. The objective of this study was to examine the impact of forensic accounting services on fraud detection and prevention among commercial banks in Kenya, the most prevalent type of fraud and to establish the major areas of application of forensic accounting services. The data collection instrument preferred for the study was a questionnaire. Findings from the study saw that fraud detection and prevention increased when forensic accounting services was employed. The study used descriptive research survey design and uses a sample of 47 respondents in 16 commercial banks in Kenya. The data was analyzed using Statistical package for social sciences (SPSS). The study findings indicated that the application of forensic accounting services by banks led to increased fraud prevention in the commercial banks and the highest application was on enhancing quality of financial reporting. The most prevalent type of fraud in the banking sector was fraudulent expense claims.