Factors influencing occupational fraud risk in supermarket chains in Kenya
Matagaro, Diana Kemunto
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Throughout history, fraud has existed and has taken many dimensions. Organization fraud has grown with the advent of the retail industry, and has been facilitated through the technological improvements and the large use of the Internet. The purpose of this study was to establish the factors influencing occupational fraud risk in retail chains in Kenya. The study was guided by three specific objectives; to assess the effect of corporate governance on occupational fraud risk in supermarket chains in Kenya, to determine the influence of staff attitude on occupational fraud risk in supermarket chains in Kenya and to assess the influence of employee lifestyle on occupational fraud risk in supermarket chains in Kenya. This study used a descriptive research design targeting all employees in supermarkets in Kenya. A sample size of 384 respondents was selected through random sampling, which included the operations managers, supervisors, cashiers and general employees. The study utilized primary data. Primary data was collected through the use of structured questionnaires which comprised of both open-ended and closed-ended questions. A factor analysis was done to test the validity of the questionnaires. The questionnaires were self-administered by the use of research assistants. Data was analyzed using the statistical package for social sciences software (SPSS) version 20.0. The findings indicated that the level of occupational fraud risk has reduced to a little extent and this could be attributed to the fact that supermarkets have put in place internal control systems. However, the vice has not been curbed fully due to weak control systems, job dissatisfaction among employees, easy access to the organization‘s resources and demanding employee lifestyle habits. The sector is highly vulnerable to the risk of bribery and corruption due to high levels of third party touch points in the Procurement and Supply Chain. The study therefore concludes that laxity in management can create high chances of occupational fraud risk. The retail chain sector can reap reasonable benefits in reducing occupational fraud by continuously reviewing the management controls through ensuring a feasible balance between resource allocation and occupational fraud exposure. This can be done by putting in place tight fraud handling policies, reporting all employee related frauds to the relevant authorities, ensuring staff rotation and that all staff go for annual leaves. Organizations should also conduct lifestyle checks on their employees to detect any inconsistency between what they earn and their lifestyles.