School of Management and Commerce (SMC)

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Browsing School of Management and Commerce (SMC) by Author "Araka, G. K."

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    Effectiveness of forensic accounting practices in prevention of money laundering in County governments of Kenya
    (Strathmore University, 2023) Araka, G. K.
    The main goal of this research was to ascertain the efficacy of forensic accounting in boosting money laundering prevention within Kenyan county governments due to the significant expansion of money laundering activities there, which has impacted service delivery and money circulation in rural regions. The specific goals were to determine how much the use of forensic accounting practices influences the prevention of money laundering in County governments, the effectiveness of money laundering management tools in preventing money laundering in County governments, and the impact of forensic accounting knowledge and skills on the prevention of money laundering. The research was carried out in Kenya with a particular emphasis on the western Kenyan county administrations. The sample size was 245, and the target population was the 592 county workers that included the top management officials of the selected counties. A descriptive research approach was adopted for this investigation. The research also used a stratified sampling method and a multiple frame sampling procedure to choose its sample from the study population. The study discovered that using forensic accounting methods will improve county governments' understanding of money laundering in Kenya. The findings also reveal a link of 0.243 (p0.001) between forensic accounting expertise and the ability to detect and regulate money laundering. A significant association was found, since the estimated t-value (3.236) was larger than the significance threshold (t-value = 1.96). The results of this study strongly showed that an increase of only 1% in forensic accountants' capacity to identify and prevent financial crimes would result in an increase of just 0.24 percentage points in the efficacy of controls over money laundering. The findings showed a 0.213 (p=0.002) correlation between forensic accounting knowledge and money laundering detection and control. The 3.368 t-value exceeded the 1.96 threshold for statistical significance. For every unit gain in forensic accounting knowledge, money laundering prevention and control rose by 0.213 percentage points. Kenya's county governments prevented and controlled money laundering via money laundering management tools, forensic accounting rules, skills, expertise, and strong internal controls. Strong internal controls moderate the coefficient of determination for how effectively an organization avoids and controls money laundering from 55.1% (R-Square = 0.551) to 57.9% (R-Square = 0.579). Money laundering decreases 19.6% if strong internal controls are enhanced by one unit (= -0.196, t = -3.826, p-value = 0.0000.05). Thus, Kenya's county governments' anti-money-laundering management technology is limited by strong internal controls. In order to advance the global trend of money laundering prevention and control, the research advised national and local governments to create regulations that support forensic accounting discipline. To aid in the creation of organizations' anti-money laundering policies, it is critical that the county government create and put into place a robust money laundering control plan.