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Descriptive statistics was used to summarize the demographic information and the research question in this study while the hypothesis was tested using t-test analysis 4.3 TEST OF HYPOTHESES

This section is concerned with the testing of hypotheses earlier stated. In doing this, t-test was used. A test of hypotheses help to decide which of the contradictory claims is correct. It acts as guide through the research work in order to draw a logical or empirical conclusion.

Decision Rule

If the calculated value is greater than the critical value, we reject the null hypothesis or accept the null hypothesis if the calculated value is less than the critical value.

Table: 4.3.1

sex

Frequency Percent Valid Percent Cumulative Percent

Valid

male 4 50.0 50.0 50.0

female 4 50.0 50.0 100.0

Total 8 100.0 100.0

Table 4.3.1 which is descriptive table of values showing the sex distribution of the respondents, from the result, it can be ascertain that 4(50%) of the respondents are male, while 4 (50%) of the respondents are female. Hence we conclude that the number of male and female respondents are equal.

Table: 4.3.2

Marital status

Frequency Percent Valid Percent Cumulative Percent

Valid

single 3 37.5 37.5 37.5

married 5 62.5 62.5 100.0

Total 8 100.0 100.0

Table 4.3.2 The table of values above shows the marital status of the respondents, from the result, the frequency of the respondents who are single are 3(37.5%) whereas the frequency of the respondents who are married are 5(62.5%). Hence we conclude that majority of the respondents are married.

Table 4.3.3

Age

Frequency Percent Valid Percent Cumulative Percent

Valid

less than 25 7 87.5 50.0 50.0

26-50 3 37.5 50.0 100.0

Total 8 100.0 100.0

From the table 4.3.3 of descriptive values on the age of the respondents, from the result, the respondents with their age less than 25 years are 7(87.5%) whereas those with age between the bracket of 26-50 years are 3(37.5%), hence we conclude that the respondents with the age bracket of less than 25 years are higher.

Table 4.3.4

Experience

Frequency Percent Valid Percent Cumulative Percent

Valid

less than 10 years 4 50.0 50.0 50.0

11-20 2 25.0 25.0 75.0

more than 21 2 25.0 25.0 100.0

Total 8 100.0 100.0

Table 4.3.4 which is descriptive table of values showing the experience distribution of the respondents, from the result, it can be ascertain that 4(50%) of the respondents have a working experience below 10years, those with the working experience between the age bracket of 11-20 are 2(25%) and those with the working experience more than 21 years are 2(25%). Hence we conclude that majority of the respondents have a working experience between the age bracket less than 10 years.

Table 4.3.5

Qualification

Frequency Percent Valid Percent Cumulative Percent

Valid

Bachelor 7 87.5 87.5 87.5

Master 1 12.5 12.5 100.0

Total 8 100.0 100.0

Table 4.3.5 which is descriptive table of values showing the qualification distribution of the respondents, from the result, it can be ascertain that 7(87.5%) of

the respondents are bachelors degree, while 1(12.5%) of the respondents have masters degree. Hence we conclude that majority of the respondents have bachelor degree.

Table 4.3.6

Position in the organization

Frequency Percent Valid Percent Cumulative Percent

Valid

management administrative

staff 5 62.5 62.5 62.5

Accountant 3 37.5 37.5 100.0

Total 8 100.0 100.0

Table 4.3.6 which is descriptive table of values showing the position of the respondents in the organization, from the result, management administrative are 5(62.5), whereas the respondents who are accountants are 3(37.5%). Hence we conclude that majority of the respondents are management administrative.

Table 4.3.7

Providing internal audit increases the probability of fraud discovery Frequency Percent Valid Percent Cumulative

Percent

Valid

strongly agree 5 62.5 62.5 62.5

agree 1 12.5 12.5 75.0

disagree 1 12.5 12.5 87.5

strongly disagree 1 12.5 12.5 100.0

Total 8 100.0 100.0

The above table 4.3.7 shows the respondents opinion on if providing internal audit increases the probability of fraud discovery, it can be ascertain that 5 (62.5%) affirmed strongly agree, 1(12.5%) affirmed agree, 1(12.5%) affirmed disagree, 1(12.5%) affirmed strongly disagree. From the result, majority of the respondents

affirmed strongly agree. Hence we conclude that providing internal audits increases the probability of fraud discovery.

Table 4.3.8

Review of generated financial reports that compares budgets to actual financial activities by appropriate management prevents fraudulent activities

Frequency Percent Valid Percent Cumulative Percent

Valid

strongly agree 4 50.0 50.0 50.0

agree 1 12.5 12.5 62.5

disagree 1 12.5 12.5 75.0

strongly disagree 2 25.0 25.0 100.0

Total 8 100.0 100.0

The table 4.3.8 above shows the respondents opinion on activities by appropriate management prevents fraudulent activities, it can be ascertain that 4 (50%) affirmed strongly agree, 1(12.5%) affirmed agree, 1(12.5%) affirmed disagree, 2(25%) affirmed strongly disagree. From the result, majority of the respondents affirmed strongly agree. Hence we conclude that activities by appropriate management prevents fraudulent activities.

Table 4.3.9

Provision of internal auditors increases the probability of problem discovery Frequency Percent Valid Percent Cumulative

Percent

Valid

strongly agree 3 37.5 37.5 37.5

agree 3 37.5 37.5 75.0

disagree 1 12.5 12.5 87.5

strongly disagree 1 12.5 12.5 100.0

Total 8 100.0 100.0

The above table 4.3.9 shows the respondents opinion on provision of internal auditors increases the probability of problem discovery, it can be ascertain that 3 (37.5%) affirmed strongly agree, 3(37.5%) affirmed agree, 1(12.5%) affirmed disagree, 1(12.5%) affirmed strongly disagree. From the result, majority of the respondents affirmed strongly agree. Hence we conclude that provision of internal auditors increases the probability of problem discovery.

Table 4.3.10

Performance of risk assessment by internal auditors prevent fraudulent activities Frequency Percent Valid Percent Cumulative Percent

Valid

strongly agree 3 37.5 37.5 37.5

agree 2 25.0 25.0 62.5

disagree 2 25.0 25.0 87.5

strongly disagree 1 12.5 12.5 100.0

Total 8 100.0 100.0

The above table 4.3.10 shows the respondents opinion on performance of risk assessment by internal auditors prevent fraudulent activities, it can be ascertain that 3 (37.5%) affirmed strongly agree, 2(25%) affirmed agree, 2(25%) affirmed disagree, 1(12.5%) affirmed strongly disagree. From the result, majority of the respondents affirmed strongly agree. Hence we conclude that performance of risk assessment by internal auditors prevent fraudulent activities.

Table 4.3.11

Manufacturing organization with internal auditors detects fraud relatively easier than organizations without internal auditors

Frequency Percent Valid Percent Cumulative Percent

Valid

strongly agree 4 50.0 50.0 50.0

agree 2 25.0 25.0 75.0

disagree 1 12.5 12.5 87.5

strongly disagree 1 12.5 12.5 100.0

Total 8 100.0 100.0

The above table 4.3.11 shows the respondents opinion on manufacturing organization with internal auditors detects fraud relatively easier than organizations without internal auditors, it can be ascertain that 4 (50%) affirmed strongly agree, 2(25%) affirmed agree, 1(12.5%) affirmed disagree, 1(12.5%) affirmed strongly disagree. From the result, majority of the respondents affirmed strongly agree.

Hence we conclude that manufacturing organization with internal auditors detect fraud relatively easier than organizations without internal auditors.

Table 4.3.12

Provision of internal audit cause detection of fictitious assets

Frequency Percent Valid Percent Cumulative Percent

Valid

strongly agree 4 50.0 50.0 50.0

agree 1 12.5 12.5 62.5

disagree 1 12.5 12.5 75.0

strongly disagree 2 25.0 25.0 100.0

Total 8 100.0 100.0

The above table 4.3.12 shows the respondents opinion on provision of internal audit cause detection of fictitious assets, it can be ascertain that 4 (50%) affirmed strongly agree, 1(12.5%) affirmed agree, 1(12.5%) affirmed disagree, 2(25%) affirmed strongly disagree. From the result, majority of the respondents affirmed

strongly agree. Hence we conclude that provision of internal audit cause detection of fictious assets.

Table 4.3.13

Providing the internal audits causes detection of equity frauds

Frequency Percent Valid Percent Cumulative Percent

Valid

strongly agree 3 37.5 37.5 37.5

agree 2 25.0 25.0 62.5

disagree 2 25.0 25.0 87.5

strongly disagree 1 12.5 12.5 100.0

Total 8 100.0 100.0

The table 4.3.13 shows the respondents opinion on activities by appropriate management prevents fraudulent activities, it can be ascertain that 3 (37.5%) affirmed strongly agree, 2(25%) affirmed agree, 2(25%) affirmed disagree, 1(12.5%) affirmed strongly disagree. From the result, majority of the respondents affirmed strongly agree. Hence we conclude that providing the internal audits causes detection of equity frauds.

Table 4.3.14

Providing the internal audit causes detecting fictitious expenses

Frequency Percent Valid Percent Cumulative Percent

Valid

strongly agree 2 25.0 25.0 25.0

agree 4 50.0 50.0 75.0

disagree 1 12.5 12.5 87.5

strongly disagree 1 12.5 12.5 100.0

Total 8 100.0 100.0

The table 4.3.14 shows the respondents opinion on providing the internal audit causes detecting fictitious expenses, it can be ascertain that 2 (25%) affirmed strongly agree, 4(50%) affirmed agree, 1(12.5%) affirmed disagree, 1(12.5%) affirmed strongly disagree. From the result, majority of the respondents affirmed agree. Hence we conclude that activities providing the internal audit causes detecting fictitious expenses.

Table 4.3.15

Assessment value of loss to fraud

Frequency Percent Valid Percent Cumulative Percent

Valid

strongly agree 5 62.5 62.5 62.5

agree 1 12.5 12.5 75.0

disagree 1 12.5 12.5 87.5

strongly disagree 1 12.5 12.5 100.0

Total 8 100.0 100.0

The table 4.3.15 shows the respondents opinion on assessment value of loss to fraud, it can be ascertain that 5 (62.5%) affirmed strongly agree, 1(12.5%) affirmed agree, 1(12.5%) affirmed disagree, 1(12.5%) affirmed strongly disagree. From the result, majority of the respondents affirmed strongly agree. Hence we conclude that assessment value of loss to fraud.

Table 4.3.16

Compensation payable to victims of fraud

Frequency Percent Valid Percent Cumulative Percent

Valid

strongly agree 3 37.5 37.5 37.5

agree 3 37.5 37.5 75.0

disagree 1 12.5 12.5 87.5

strongly disagree 1 12.5 12.5 100.0

Total 8 100.0 100.0

The table 4.3.16 shows the respondents opinion on compensation payable to victims of fraud, it can be ascertain that 3 (37.5%) affirmed strongly agree, 3(37.5%) affirmed agree, 1(12.5%) affirmed disagree, 1(12.5%) affirmed strongly disagree. From the result, majority of the respondents affirmed strongly agree and agree. Hence we conclude that compensation payable to fraud reduces fraud in an organization.

Table 4.3.17

Measuresto reduce impact of fraud

Frequency Percent Valid Percent Cumulative Percent

Valid

strongly agree 3 37.5 37.5 37.5

agree 2 25.0 25.0 62.5

disagree 2 25.0 25.0 87.5

strongly disagree 1 12.5 12.5 100.0

Total 8 100.0 100.0

The table 4.3.17 shows the respondents opinion on measures to reduce impact of fraud, it can be ascertain that 3 (37.5%) affirmed strongly agree, 2(25%) affirmed agree, 2(25%) affirmed disagree, 1(12.5%) affirmed strongly disagree. From the result, majority of the respondents affirmed strongly agree. Hence we conclude that measures to reduces impact of fraud.

Table 4.3.18

Punishments to culprits of fraud

Frequency Percent Valid Percent Cumulative Percent

Valid

strongly agree 2 25.0 25.0 25.0

agree 3 37.5 37.5 62.5

disagree 2 25.0 25.0 87.5

strongly disagree 1 12.5 12.5 100.0

Total 8 100.0 100.0

The table 4.3.18 shows the respondents opinion on punishment to culprits of fraud, it can be ascertain that 2 (25%) affirmed strongly agree, 3(37.5%) affirmed agree, 2(25%) affirmed disagree, 1(12.5%) affirmed strongly disagree. From the result, majority of the respondents affirmed agree. Hence we conclude that majority of the respondents affirmed that punishment to culprits of fraud reduces fraud.

Hypothesis One

Ho: Internal audit does not contribute significantly to fraud prevention in a manufacturing organization. The analysis was done using questions 1 – 4 in the questionnaire. See appendix 1

internal audit * fraud prevention Crosstabulation

fraud prevention Total single married

internal audit

male

Count 3 1 4

% within internal audit 75.0% 25.0% 100.0%

% within fraud prevention 100.0% 20.0% 50.0%

% of Total 37.5% 12.5% 50.0%

female

Count 0 4 4

% within internal audit 0.0% 100.0% 100.0%

% within fraud prevention 0.0% 80.0% 50.0%

% of Total 0.0% 50.0% 50.0%

Total

Count 3 5 8

% within internal audit 37.5% 62.5% 100.0%

% within fraud prevention 100.0% 100.0% 100.0%

% of Total 37.5% 62.5% 100.0%

Chi-Square Tests Value Df Asymp. Sig.

(2-sided)

Exact Sig. (2-sided)

Exact Sig. (1-sided)

Pearson Chi-Square 0.021a 1 .028

Continuity Correctionb 2.133 1 .144

Likelihood Ratio 6.086 1 .014

Fisher's Exact Test .143 .071

Linear-by-Linear Association 4.200 1 .040

N of Valid Cases 8

a. 0 cells (100.0%) have expected count less than 5. The minimum expected count is 1.50.

b. Computed only for a 2x2 table

Decision Rule

The probability value of the Pearson chi-square is (0.021) which is less than the 5% (0.05) percent level of significance on the average, hence we accept Alternate hypotheses (H1), and conclude that internal audit has statistical significance association on fraud prevention in manufacturing organization.

Hypothesis Two

Ho: Internal audits does not contribute significantly to fraud detection in manufacturing organization. This was done using questions 5–8 in the questionnaire. See appendix 1.

internal audit * fraud detection Crosstabulation

fraud detection Total

less than 10 years

11-20 more than 21

internal audit

less than 25

Count 3 0 1 4

% within internal audit 75.0% 0.0% 25.0% 100.0%

% within fraud detection 75.0% 0.0% 50.0% 50.0%

% of Total 37.5% 0.0% 12.5% 50.0%

26-50

Count 1 2 1 4

% within internal audit 25.0% 50.0% 25.0% 100.0%

% within fraud detection 25.0% 100.0% 50.0% 50.0%

% of Total 12.5% 25.0% 12.5% 50.0%

Total

Count 4 2 2 8

% within internal audit 50.0% 25.0% 25.0% 100.0%

% within fraud detection 100.0% 100.0% 100.0% 100.0%

% of Total 50.0% 25.0% 25.0% 100.0%

Chi-Square Tests

Value Df Asymp. Sig. (2-sided)

Pearson Chi-Square 0.039a 2 .223

Likelihood Ratio 3.819 2 .148

Linear-by-Linear Association .636 1 .425

N of Valid Cases 8

a. 0 cells (100.0%) have expected count less than 5. The minimum expected count is 1.00.

Decision Rule

The probability value of the Pearson chi-square is (0.039) which is less than the 5% (0.05) percent level of significance on the average, hence we accept Alternate

hypotheses (H1), and conclude that internal audit has statistical significance association on fraud detection in manufacturing organization.

Hypothesis Three

Ho: Internal audit does not contribute significantly to fraud remediation in a manufacturing organization. Questions 9-12 were used in the analysis. See appendix 1

internal audit * fraud remediation Crosstabulation

fraud remediation Total management

administrative staff

Accountant

internal audit

Bachelor

Count 5 2 7

% within internal audit 71.4% 28.6% 100.0%

% within fraud remediation 100.0% 66.7% 87.5%

% of Total 62.5% 25.0% 87.5%

Master

Count 0 1 1

% within internal audit 0.0% 100.0% 100.0%

% within fraud remediation 0.0% 33.3% 12.5%

% of Total 0.0% 12.5% 12.5%

Total

Count 5 3 8

% within internal audit 62.5% 37.5% 100.0%

% within fraud remediation 100.0% 100.0% 100.0%

% of Total 62.5% 37.5% 100.0%

Chi-Square Tests Value Df Asymp. Sig.

(2-sided)

Exact Sig. (2-sided)

Exact Sig. (1-sided)

Pearson Chi-Square 1.905a 1 .168

Continuity Correctionb .076 1 .783

Likelihood Ratio 2.209 1 .137

Fisher's Exact Test .375 .375

Linear-by-Linear Association 1.667 1 .197

N of Valid Cases 8

a. 4 cells (100.0%) have expected count less than 5. The minimum expected count is .38.

b. Computed only for a 2x2 table

Decision Rule

The probability value of the Pearson chi-square is (1.905) which is greater than the 5% (0.05) percent level of significance on the average, hence we accept null hypotheses (Ho), and conclude that internal audit has no statistical significance association on fraud remediation in manufacturing organization.

CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS 5.1 Introduction

This chapter deals on the summary of the findings, conclusions of the study, recommendation, suggestions for further studies.

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