IMPACT OF INTERNAL AUDIT FUNCTIONS ON FRAUD DETECTION AND PREVENTION IN GOVERNMENT INSTITUTIONS IN RWANDA. CASE OF KIGALI CITY

Abstract

The study aimed to assess the relationship between internal audit functions and fraud prevention and detection in Kigali City administration. The specific objectives were to analyze internal audit function practices in Kigali City administration, to analyze the level of fraud prevention and detection, and to determine the relationship between internal audit functions and fraud prevention and detection. A descriptive survey research design was employed and the population of the study was 112 employees Kigali City Council, from which a sample size of 87 was calculated using Sliven’s formula. Data were collected through questionnaires, interviews, and documentary analysis and analyzed using SPSS, employing descriptive statistics (means and standard deviations) and multiple regression analysis to test the study’s hypotheses. The findings revealed that internal audit functions, such as internal auditquality, frequency,stafftraining,objectivity,andindependence,significantlycontribute to fraud prevention and detection in Kigali City administration. Audit independence demonstrated the strongest positive relationship with fraud prevention and detection (β = .641, p = .021), followed by audit staff training (β = .514, p = .002). The model summary showed that internal audit functions explained 62.5% of the variance in fraud prevention and detection (R2 = .625). Additionally, respondents reported high satisfaction with internal audit quality (mean = 4.542, SD = 0.356) and fraud prevention measures, including regular reviews and training (mean = 4.653, SD = 0.410). In conclusion, internal audit functions play a vital role in reducing fraud within Kigali City administration. However, there are areas for improvement, particularly in enhancing audit objectivity and updating internal control policies. The study recommends strengthening internal audit independence, expanding audit staff training, and improving compliance monitoring for fraud prevention strategies.