An assessment of the role of auditors in fraud detection and prevention (a case study of mutual fund in the Kumasi metropolis)

Abstract

The study sought to assess the role of auditors in fraud detection and prevention focussing on Mutual Fund in the Kumasi Metropolis (MFs-K). The study, specifically, sought to achieve the following objectives, to identify the factors that cause fraud in the Mutual Funds, to determine the role of external and internal auditors in fraud detection and prevention in the Mutual Funds and to examine how auditors can detect and prevent fraud. Data was collected from respondents with a well-structure questionnaire based on the objectives of the study. The data collected from the field was organised, analysed, summarised and presented with the help of the statistical package for service solution (SPSS). Findings from the study revealed that advance fee fraud, fund diversion, computer fraud, poor management and inexperience personnel are the factors that cause fraud. In relation to the role of internal and external auditors, the results indicated that there are deeply expectation gap among audit stakeholders. Again, the results show that audit stakeholders are unaware of auditing functions. Based on the findings of the study it was recommended among others that; strong control system should be put in place to minimise fraud such as computer fraud, fund diversion and late market trading, users should also be educated on the role and the actual duties of auditors, through better communication by auditors. Additionally the Mutual fund must expand the scope of the audit to meet market expectations.