Internal audit and fraud detection in selected money transfer companies in Puntland, Somalia

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Kampala International University, College of Economics and Management
This study examined the influence of internal audit on fraud detection of six money transfer companies in Puntland, Somalia. A self-made questionnaire is used to collect data in order to obtain four research objectives; 1) to identify the profile of the respondents, 2) to determine the extent of internal audit, 3) to find out the level of fraud detection, 4) to establish if internal audit function is significantly correlated with fraud detection. The study used descriptive survey design in order to compare the level of internal audit to fraud detection the sample of this study was 109 respondents from six money transfer companies in Puntland, Somalia. Key findings from the study were (1) the profile of the respondents found that male employees (87.2%) dominates female (12.2%), in regard to education level, respondents who are secondary level (14.7%), those who have diploma are (20.2%), those who obtained bachelor degree are (50.5%) where as master degree is (l4.7%) and none of the respondents have Ph.D, the length of work experience that (72.4%) of the respondents have less than 6 years and only (27.6%) have more than 7 years of experience, followed by the age of respondents who are less than 59 years are (98.2%) and who are above 60 years are (1.8%); (2) the overall level of internal audit found satisfactory (mean=2.81); (3) the overall level of fraud detection is also found satisfactory (mean =2.80); (4) the study also found that there exists a significant positive correlation between internal audit and fraud detection. It was concluded that there is a significant relationship between the level of internal audit and fraud detection in the selected money transfer companies in Puntland Somalia, and also internal audit contributes 38% in the variation of the level of fraud detection. Based on the findings, it was recommended that top management should give input for internal audit planning in money transfer companies in Puntland, Somalia and Internal audit function of the money transfer companies should be independent in order to detect fraud fairly
A thesis presented to the College of Higher Degrees and Research in partial fulfillment of the requirements for the Award of a Degree of Masters in Finance and Accounting of Kampala International University
Internal audit, Fraud detection, Money transfer, Puntland, Somalia