Information Technology Audit and Fraud Prevention Among Commercial Banks in Kenya

Abstract

The study focused on commercial banks in Kenya, as they are dependent on technology in carrying out their banking operations. The reliance on technology has resulted to numerous challenges such as multiplicity and complexity of systems, insider security threats, as well as more exposure to fraud risks. Thus, the need for this study arose, and it aimed to find ways of curbing the various types of IT-related risks and challenges. The study sought to determine the extent of IT related fraud in Kenyan commercial banks, to establish the challenges faced during IT auditing by the IS auditor, to establish the countermeasures implemented in preventing fraud through IT auditing and to determine the relationship between IT auditing and fraud prevention. The study made use of the descriptive survey design. Questionnaires were used to gather data from IS auditors of various commercial banks in Kenya. Statistical methods such as mean, standard deviation, factor analysis and regression analysis were utilized to analyze the data collected from the respondents. From the findings, it was evident that banks had encountered IT-related fraud. As a result, IS auditors utilize different IT audit approaches and mitigation strategies in the detection and prevention of fraud and most of the respondents concurred, to a great extent, that there is a relationship between IT audit and fraud prevention. It was however noted that most IS auditors did not possess the right tools to perform effective IT audits. This largely inhibited the effectiveness of detecting fraud early. In this regard, it is imperative that banks put in place mitigation strategies to help reduce the prevalent fraud risk. Banks should also ensure that IS auditors are well equipped with tools to effectively perform their duties. Further, IS auditors should perform appropriate risk assessments when planning for IT-audits on areas that may be affected by frauds.