Effect of Control Environment on Fraud Detection and Prevention at 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. This study hinder the growth and ruin the reputation of institutions of higher learning in terms of performance and accountability. The study was conducted in order to determine the effect of control environment on fraud detection and prevention at University of Eldoret, Kenya. This study was founded on contingency 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 which 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. Results were presented in tables. Findings revealed that Control environment positively and significantly influence fraud detection and prevention in the institution (β = 0.528; p < 0.05). The study further recommends that the governing body, possibly supported by the audit committee, should ensure that the control environment 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.