Effect of Fraud Risk Management on Financial Performance: The Case of Save the Children International

Abstract

The aim of the study was to analyze the Fraud management practices and the relationship between fraud risk management practices and financial performance in Save the Children International Ethiopian Country Office. The researcher utilized a descriptive research design. Questionnaires were employed in collecting data from a sample of 180 employees of the organization from Finance, Internal Audit, Grant management and relevant Program departments. Purposive sampling is used to target the employees in these departments to get more relevant and reliable data as they are directly responsible for Financial management and internal control activities of the organization. The researcher collected quantitative data and analyzed it using descriptive analysis methods. Inferential statistics (correlation and regression analysis) was also applied in deriving the relation between the dependent and independent variables. The study established that Save the Children Ethiopian Country Office has suffered from fraud occurrences and Fraud Management activity is of interest within the organization as it undertakes a monthly or quarterly monitoring of fraud. Generally, the researcher concluded that anti-fraud policies, fraud deterrence and fraud detection significantly impact financial performance of the organization under study. The researcher therefore recommended that the organization should undertake a more frequent fraud monitoring process and utilize strategies such as staff supervision, safe controls when accessing systems, fraud risk register, and strict legal consequences as strategies to deter fraud. The organization should also sufficiently allocate resources towards fraud risk management to help them save on fraud investigation