Effect of Internal Control System on Fraud Prevention and Detection: A Studyon Selected Public Sectors in Oromia Regional State West Hararge Zone

Abstract

The main purpose of this study is to ascertain the effect of internal control system on fraud prevention and detection in public sectors in Oromia regional state west Hararghe zone. Purposive sampling and simple random sampling method was used to select key respondents officials to respond to the data collection instruments. The study used closed ended questionnaires. The respondents were office head, purchase and finance manager, internal audit head, purchase and finance head, and internal auditors. The collected Data was analyzed by descriptive and logistic regression model using Statistical Package for the Social Science (SPSS). Findings of the study reveal that there is statistically significant and positive relationship between the adequacy of internal control systems and fraud prevention and detection in public sectors in Oromia regional state West Hararghe zone. Furthermore, the finding also indicates that Information and communication level and the control activities were significant factors of the fraud prevention and detection status of the respondents office while control environment, risk assessment and monitoring process was negatively significant. Study was recommended that effective and efficient internal control policies and procedures should be put in place to prevent and detect fraud public sectors and other institutions.