Abstract:
The purpose of this study was to assess the effect of internal control on fraud prevention of Oromia bank Share Company. An explanatory research design, which involved quantitative and qualitative research approach, was employed. The study was based on primary data collected from census or 101 respondents selected by non-probability sampling. In addition to this, key informant interview was also made from higher officials of banks to compare with the quantitative regression result. The collected data were analyzed by IBM SPSS Version 23 statistical software program. A descriptive statistics like frequency, percentage, mean and standard deviation were used to summarize the data collected on the effect of internal control on prevention of Oromia bank Share Company. A Multiple linear regression was used to summarize the data collected on the effect of internal control on fraud prevention of Oromia bank Share Company. The result of the study showed that existence of control of environment, risk assessment, control activity, information and communication and monitoring activities to prevent fraud in Oromia banks. However, the internal control activities were not fully practicable due to lack of experiences, training, necessary resources required for internal control and others. The model result confirm that control of environment, the effective control activity, information communication and monitoring activity are positively and significantly correlated with fraud detect and prevent in Oromia banks share company. The study concluded that internal control has significant effect on fraud prevention in Oromia bank Share Company. It is recommended that introducing proper and strong control mechanisms, training employees and enhancing information and communications should be put in place to prevent fraud in Oromia bank Share Company.
