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Moderating Effect of Government Regulations on Internal Control System and Fraud Prevention. A Case Banking Sector in Kenya

Author

Listed:
  • Samuel Ngigi Nyakarimi*

    (Post graduate student at School of Business and Economics, University of Embu, Kenya)

  • Samuel Nduati Kariuki

    (School of Business and Economics, specializing in Accounting and finance at University of Embu, Kenya)

  • Peter Wang’ombe Kariuki

    (Lecturer in School of Business and Economics, specializing in Accounting and finance at University of Embu, Kenya)

Abstract

The main purpose of the study was to establish the moderating effect of government regulations on the relationship between internal control system and fraud prevention in baking sector. Structured questionnaire was used as tool for data collection. The study was based on all banks registered and operating in Kenya and the questionnaires were meant for branch managers, operations mangers and cash managers in head offices of all banks. One hundred and seventeen questionnaires were distributed and officers from 33 banks out 39 banks returned fully filled questionnaires. The questionnaires were analyzed using Structural equation Model (SEM). The findings indicated that the government regulations have significant moderating effect of control environment and risk assessment. However, there was insignificant moderating effect on control activities, communication and monitoring of activities. The study suggested that further studies and analysis should be undertaken to establish those legislations and regulations that should be enhanced, abolished and also establish need of new laws to enhance the functions of internal control system.

Suggested Citation

  • Samuel Ngigi Nyakarimi* & Samuel Nduati Kariuki & Peter Wang’ombe Kariuki, 2019. "Moderating Effect of Government Regulations on Internal Control System and Fraud Prevention. A Case Banking Sector in Kenya," The Journal of Social Sciences Research, Academic Research Publishing Group, vol. 5(12), pages 1900-1907, 12-2019.
    • Handle: RePEc:arp:tjssrr:2019:p:1900-1907
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