Abstract:
The main objective of this study was to evaluate key predictors of computerized fraud among
commercial banks in Kenya. The specific objectives of the study were; to examine role of
internal controls and employee’s red flags in predicting computerized computer frauds among
commercial banks in Kenya. The study was anchored on mindset and fraud triangle theory. The
study employed a descriptive research design and targeted a total of 90 staffs of commercial
banks in Kenya; risk and compliance managers, bank operation managers, head of credit and
branch managers. Primary data was collected using a self administered, semi-structured
questionnaire. SPSS software version 21 was used in analysing the data. Both descriptive
analysis and inferential analysis was done. Results of the study revealed that the influence of
internal controls, employee’s red flags as predictors for computerized financial fraud in
commercial banks in Kenya were both positive and statistically significant. The study
recommends that management of commercial banks in Kenya should ensure that there is an
elaborate and effective IT controls. The study further recommends the management of Kenya commercial banks to conduct frequent internal auditing to limit the possibilities of a fraud.
Moreover, the study recommends that management of commercial banks in Kenya should take
more interest in internal controls around computerized systems and monitor staff red flags
associated with computerized frauds. The regulator should also continuously monitor to ensure
there is a strong control environment within commercial banks.
