Investigating The Role of Internal Audtior’s Attributes in Preventing and Detecting Fraud in Business Organisations. A Case Study of Smes in Mutare Showground.

Investigating the Role of Internal Auditor’s Attributes in Preventing and Detecting Fraud in Business Organisations. A Case Study of Smes in Mutare Showground.

Liberty D Mudzengerere, Shelter Machingura, Kudakwashe Munyepwa , Memory Matsikure Cheure, Allen mutumwa, Denny Chakauya, Tafadzwa Mudadi, Tinashe Mudzengerere

Manicaland State University, Mutare, Manicaland, Zimbabwe

DOI: https://doi.org/10.51244/IJRSI.2025.12020061

Received: 10 February 2025; Accepted: 14 February 2025; Published: 17 March 2025

ABSTRACT

This research investigated the role of internal auditor’s attributes in preventing and detecting fraud in business organizations. The focus was on the influence of internal auditor’s attributes in the prevention and detection of fraud. A case study of 54 respondents in SMEs in Mutare Showground was carried out using both qualitative and quantitative research approaches. Stratified random sampling was used when distributing questionnaires and a convenient sampling method when carrying out interviews. Data analysis was done using tables, charts, graphs, descriptive tables, chi-square test and multiple linear regression model with IBM SPSS version 21 and Amos V18 to produce output tables. The results show that auditor experience has a positive and significant effect on fraud prevention and detection, auditor ethics has a positive and significant effect on fraud prevention and detection, professional scepticism has a positive and significant effect on fraud prevention and detection and auditor’s competency has a positive and significant effect on fraud prevention and detection. However, internal auditors in SMEs in Mutare Showground does not have the ability to prevent and detect fraud effectively as they do not have sufficient resources to employ qualified internal auditors, limited scope, pressure to maintain profitability in a competitive environment and nature as a small organisation. The findings of this study are supported by agency theory, fraud triangle theory and red flag theory. The study concluded that there is a positive correlation between auditor’s attributes and their ability to prevent and detect fraud.

INTRODUCTION

The informal and small to medium entities plays a crucial role in the global economy, serving as the backbone of economic activities and facilitating transactions worth trillions of dollars. However, this vital sector is not immune to the threat of financial crimes such as fraud, which have far-reaching consequences, including reputational damage, financial losses, and destabilisation of the financial system. In this context, to mitigate these risks, organizations rely on internal auditors to play a crucial role in preventing and detecting fraud.

Internal auditors act as independent third parties responsible for examining and evaluating the financial records and processes of organizations to assure their accuracy and compliance with relevant laws and regulations. Internal auditors’ role in detecting and preventing fraud is paramount, as it is tasked with identifying red flags, inconsistencies, and suspicious activities that may indicate financial crimes.

This research delved into the specific attributes of internal auditors that contribute to their effectiveness in safeguarding organizational assets and maintaining financial integrity. There was an examination of the impact of internal auditors’ attributes in the prevention and detection of fraud in business organizations.

Background

According to Zimstats Fraud Crime Report (2022), Zimbabwe has been plagued by numerous financial scandals and cases of fraud. This has been seen in all forms of fraud including check forgery, inventory and cash theft, expense fraud, procurement fraud, payment fraud, vendor fraud, bribery, accounting fraud and payroll fraud. These incidents have had severe repercussions on the country’s economy and its reputation in the global business community.

According to Anto et al (2020), internal auditors are pillars that serve as supervisors as well as guards in the implementation of internal controls required to prevent and detect the potential fraud that would occur in a business organization. One of the internal auditors’ roles is to discover weaknesses within the business organization to prevent fraudulent acts in advance. Auditors must make it challenging for criminals to take advantage of the vulnerabilities (Bologna, 2019).

According to the Annual Corruption Report (2021) and World History Fraud Cases (2020), the statistics of Fraudulent Cases in Parastatals and Private Companies show that companies have lost billions of funds. This shows that the financial sector has a crucial role in the global economy, serving as the backbone of economic activities and facilitating transactions worth trillions of dollars and the auditors act as immune to the threat of financial crimes which can have far-reaching consequences, including reputational damage, financial losses, and destabilization of the financial system. In this context, internal attributes are essential in executing their responsibilities of giving assurance, prevention and detection of fraud in business organizations.

In the USA, a study was conducted by Siahaan et al (2024), Wirecard Scandal in 2020 were $2.1 billion was lost by missing from its accounts leading to insolvency and a massive scandal. Due to this Siahaan et al (2024), investigated the roles of internal auditors in preventing and detecting fraud stating that auditors should be competent enough with the experience to prevent and detect fraud. He also stated that internal auditors should have a questioning mindset on certain financial transactions and information being provided by the management. This has been supported by International standards such as the International Standards on Auditing (ISA), and International Auditing and Assurance Board (IAAB) providing guidelines for auditors to effectively follow to detect and prevent fraud in organizations such as ISA 240 ( The Auditor’s Responsibility Relating to Fraud in Audit of Financial Statement) stating that auditors should maintain professional scepticism throughout the audit and IAS 315( Identification and Assessment of Risks of Material Misstatement Through Understanding the Entity and its Environment) stating that auditors should focus on understanding the entity’s business including its risk of fraud and red flags which can give auditors hits to fraud.

In South Africa, a retail holding company Steinhoff Retail Africa, is one of the largest companies in Africa. In 2017, accounting irregularities involving misstating revenue and profits over several years led to the resignation of the CEO. As a result of this, research has been conducted by Mkhize (2020), a student from Cape Town University on the prevention and detection of fraud and concluded that there was a lack of expertise, independence and objectivity in auditors’ ability to prevent and detect fraud. This is in line with professional bodies like the Association of Accountancy Bodies in West Africa (ABWA) and the Pan African Federation of Accountants (PAFA) which guide auditors on fraud detection techniques and best practices. The Association of Certified Fraud Examiners (ACFE) South Africa Chapter also work closely with auditors to provide training and resources on fraud detection techniques.

Many fraud scandals happened in Zimbabwe according to Auditors’ General Report2023. National Railways of Zimbabwe (NRZ) looted and price inflation scandals involving top management leading to significant financial losses and operational disruptions. In Zimbabwe United Passenger Company (ZUPCO), there was bribery and corruption in procurement processes. In Zimbabwe Mining Development Corporation (ZMDC), there were diamond mining revenue losses and corruption causing significant revenue loss to the government and damage to the country’s reputation. There was also Corruption, theft of electricity, and financial mismanagement in the Zimbabwe Electricity Supply Authority (ZESA) which has leads power shortages, increased load shedding, and financial losses. This has been also supported by Mtombeni et al (2023) on malpractices in government companies.

 Due to this, it shows that internal auditors have a role to play in the stability of an economy. The Institute of Chartered Accountants of Zimbabwe (ICAZ) regulates the accounting profession and sets standards for auditors to follow from ISA, IAASB and money laundering regulations imposed by the Reserve Bank of Zimbabwe (RBZ) and the Financial Intelligence Unit (FIU). According to Lu Y & Ma D (2024), auditors must be vigilant in detecting financial irregularities, conducting thorough risk assessments, and reporting suspicions of fraud to relevant authorities. The above researchers looked into fraud side of events and this research is going to investigate the role of internal audtior’s attributes in preventing and detecting fraud in business organisations.

Statement of the problem

Fraud remains a pervasive challenge in Zimbabwe, undermining corporate governance, public trust and economic development, despite auditors in both the public and private sectors. High-profile scandals reveal alarming levels of financial misconduct, as highlighted by the 2023 Auditor-General’s report, which noted over USD 100 million in unaccounted-for funds across various government entities. The collapse of the National Social Security Authority (NSSA) exemplifies failures in fraud detection, where auditors overlooked significant fraudulent activities. While internal auditors implement controls to combat fraud, challenges persist, suggesting that factors such as professional skepticism, competence, experience, and independence may influence auditors’ effectiveness. However, there is limited empirical evidence on how these attributes affect fraud mitigation in Zimbabwe, particularly within small and medium-sized enterprises (SMEs). This study aimed to investigate the impact of auditor attributes on their fraud detection and prevention capabilities in this context.

Research Gap

Despite the extensive literature on the roles of auditors in preventing and detecting fraud in business organizations, there is a noticeable gap in the specific examination of the practices of internal auditors’ attributes in effectively addressing issues of fraud. According to Yusoff et al (2023), the studies have highlighted the importance of auditors in fraud detection and prevention. Kourtesis (2019), focused on the research determinants of the ability to prevent and detect fraud in the business formal sector. However, there is limited research focusing on the roles of internal auditors’ attributes in preventing and detecting fraud in SMEs. Understanding the specific challenges, strategies, and best practices employed by SMEs, the researcher went to investigate on the role of internal auditor’s attributes in preventing and detecting fraud in SMEs in Mutare Showground.

Purpose

This research investigated the role of internal auditors’ attributes in preventing and detecting fraud. In examining the specific qualities and competencies possessed by effective internal auditors, this study aimed to identify the key factors that contribute to their success in safeguarding organizational assets and maintaining financial integrity. This research contributed to a deeper understanding of the essential characteristics that organizations should seek in internal auditors to strengthen their fraud prevention and detection capabilities. It provided valuable insights for organizations to enhance their internal audit functions and mitigate the risks of fraudulent activities.

Research Objectives

1. To determine how auditors’ experience influences the auditor’s ability to prevent and detect fraud.
2. To determine the extent to which auditors’ ethics influence the auditor’s ability to prevent and detect fraud.
3. To establish the effect of professional scepticism on the auditor’s ability to prevent and detect fraud.
4. To determine the extent to which auditors’ competency influences the auditor’s ability to prevent and detect fraud

Research Questions

1. How does auditors’ experience influence the auditor’s ability to prevent and detect fraud?
2. What is the influence of auditors’ ethics on the auditor’s ability to detect and prevent fraud?
3. What is the effect of professional scepticism on auditors’ ability to detect and prevent fraud?
4. To what extent does the auditors’ competency affect the auditor’s ability to detect and prevent fraud?

Hypothesis

H1: Auditors with more years of experience have a higher ability to detect and prevent fraud compared to less experienced auditors

H2: Higher levels of ethical standards in auditors positively influence their ability to detect and prevent fraud.

H3: Increased levels of professional scepticism significantly enhance auditors’ ability to detect and prevent fraud.

H4: Auditors with higher competency, as measured by qualifications and specialized training, demonstrate greater effectiveness in detecting and preventing fraud.

Definition of key terms

1. Internal Auditor: A professional who provides independent assurance and consulting services to enhance an organization’s operations and risk management (Turetken, 2020). An internal auditor is a skilled professional who plays a crucial role within an organization by providing an independent and objective assessment of the organization’s operations, financial reporting, and internal controls, analyzing processes, identifying weaknesses, and recommending improvements, internal auditors help to mitigate risks, enhance efficiency, and ensure compliance with relevant regulations (Christ, 2021).
2. Fraud: Intentional deception for personal gain, often involving misrepresentation, concealment, or breach of trust. Fraud is a deliberate act of deception intended to gain an unfair advantage or illicit benefit (Karpoff, 2021). It involves dishonest and unethical behavior, such as misrepresentation, concealment, or breach of trust and fraud can take many forms, including financial fraud, cybercrime, and employee fraud (Rashid, 2022). The consequences of fraud can be severe, leading to financial losses, reputational damage, and legal repercussions.
3. Prevention of Fraud: Proactive measures taken to deter and discourage fraudulent activities, such as implementing strong internal controls, conducting regular risk assessments, and fostering a culture of integrity (Rashid, 2022).
4. Detection of Fraud: Identifying and uncovering fraudulent activities through various methods, including data analysis, surveillance, investigations, and whistleblowing (Hilal, 2022).
5. Auditor’s Attributes: The personal qualities, skills, and knowledge that enable an auditor to effectively perform their duties, including professional scepticism, independence, objectivity, and technical competence (Lamboglia, 2021).
6. Professional Scepticism: A questioning mind and critical attitude that is essential for effective auditing and involves a healthy dose of doubt and a willingness to challenge assumptions (Brazel, 2022). A professional auditor must possess a questioning mind and a critical attitude and involves a healthy dose of doubt and a willingness to challenge assumptions, even when faced with seemingly credible information (Agustina, 2021). In maintaining a sceptical mindset, auditors can identify potential risks and uncover hidden issues that may not be apparent at first glance.
7. Independence: The freedom from influence or bias that allows an auditor to make objective judgments (Kapla, 2020). Auditors must be free from any influence or bias that could compromise their judgment and this includes avoiding conflicts of interest, maintaining objectivity, and adhering to professional standards. Independence allows auditors to provide unbiased assessments and recommendations (Jefferson, 2019).
8. Objectivity: Impartiality and fairness in carrying out audit work (Galison, 2021). Objectivity requires auditors to be impartial and fair in their work and auditors must avoid personal biases and consider all relevant information when forming opinions and making decisions
9. Technical Competence: skills and knowledge to perform audit tasks effectively, including understanding accounting principles, auditing standards, and relevant regulations (Kourtesis, 2019)
10. Experience: In auditing refers to the practical knowledge and skills gained through direct involvement in auditing engagements over time (Ghanbari-Homaie, 2021). It’s a valuable asset for auditors through practical experience in auditing engagements, auditors develop the skills and knowledge needed to assess risks, evaluate internal controls, and provide insightful recommendations.

LITERATURE REVIEW

Introduction

Internal audit has existed for a long time but it was not given much importance in the past. It has now become more forefront because of an increase in financial scandals like Enron and WorldCom. Internal audit investigative skills must prevent and detect financial crimes. An internal audit is a health check to ensure that the company is on track to achieve its goals by identifying risks and inefficiencies that could hinder the organization from achieving its objectives. This chapter focuses on the documentation of an exhaustive literature review of published and unpublished work in line with the researcher’s areas of interest. The chapter’s structure is guided by the research objectives and it explores some concepts, developments and findings by various authors, specialists and researchers on internal auditing. This review encompassed literature specific to Zimbabwe while incorporating relevant research from developed, and developing countries and the rest of the world. This chapter also covers the theoretical framework, conceptual framework and empirical evidence, critically evaluating it to establish knowledge gaps which the research was aimed at discovering.

Literature Review

According to the Association of Certified Fraud Examiners (ACFE) (2018), fraud is defined as any intentional deception or misrepresentation that an individual or entity makes, knowing it to be false and that it could result in some unauthorized benefit to the perpetrator. This has also been supported by the Financial Action Task Force (FATF) (2021), as dishonest and illegal activities undertaken by individuals or entities intending to deceive for financial gain or other benefits. It involves intentional acts that are deceptive, designed to mislead others for personal or financial gain, and may include financial statement fraud, misappropriation of assets, or corruption schemes (American Institute of Certified Public Accountants (AICPA), 2019). According to the International Federation of Accountants (IFAC) (2021), fraud involves an intentional act by one or more individuals among management, those charged with governance, employees, or third parties, involving the use of deception to obtain an unjust or illegal advantage. Securities and Exchange Commission (SEC) (2022), also stated that fraud encompasses a wide range of illegal actions characterized by intentional deception or misrepresentation for financial gain, often involving securities trading or investment schemes and this has been supported by Doig et al (2021); Kaur et al (2023) & Karpoff (2021).

Internal auditors play a crucial role in preventing and detecting fraud within organizations by providing independent and objective assessments of internal controls, risk management processes, and compliance with regulations (Ratmono et al, 2022). Internal auditors are responsible for assessing the effectiveness of internal controls and identifying weaknesses that could be exploited by fraudsters. According to Albrecht et al (2020), internal auditors should have a deep understanding of the organization’s operations, processes, and risks to effectively evaluate the adequacy of controls. In conducting risk assessments and testing controls, internal auditors can help identify vulnerabilities that may increase the likelihood of fraud occurring.

Chang et al (2019), defined internal auditor’s attributes as qualities, skills, and knowledge that enable internal auditors to effectively carry out their responsibilities. This has been supported by Khan (2020), internal auditors’ attributes are the essential qualities and skills that enable them to effectively assess and improve an organization’s governance, risk management, and internal control processes. According to Botha et al (2020), some examples of internal auditors’ attributes include experience, professional scepticism, competency, communication skills, resilience and ethics. This has been supported by Boskou (2019), some examples of internal auditors’ attributes include ethics, competency and professional scepticism. All these attributes work together to empower internal auditors to provide unbiased evaluations, identify risks, ensure compliance, and enhance overall organizational integrity.

Experience

According to Heymann (2020), experience has been defined as practical knowledge and skills gained through working in a specific field. Indah et al (2022), defined it as knowledge, skills, and understanding gained through practical involvement in a particular field or activity. Experience has been considered to help internal auditors in preventing and detecting fraud as it leads to practical knowledge, exposure to various scenarios, problem-solving skills, industry familiarity and relationship building (Ainscow, 2020). According to Indah (2022), seasoned auditors have encountered various scenarios and challenges, equipping them with insights into common fraud schemes and red flags and their practical knowledge allows them to navigate complex situations, make informed judgments, and implement effective fraud prevention strategies based on experiences.

Ethics

Ethics has been defined by Dewey et al (2020) as a branch of philosophy that explores moral principles and values and it delves into questions of right and wrong, good and bad, and seeks to understand what constitutes moral behaviour as it guides individuals and societies in making decisions that are just, fair, and beneficial. In auditing, ethics is a critical aspect of the profession as involves adhering to a code of conduct that ensures the integrity, objectivity and independence of the audit process (Morley, 2020). Jobin et al (2019) stated that auditors must be honest, truthful, unbiased and confidential in their role of preventing and detecting fraud. Ethical behaviour in auditing is crucial as it leads to quality work, creates trust and creditability, deterrence of fraud, transparent, long-term relationships and professional reputation. This has been supported by Asaro (2020) stating that ethical behaviour as an auditor leads to public trust, unbiased judgement, accurate reporting, detection of fraud and professional reputation.

Professional Scepticism

Internal auditors must have a questioning mind, a critical assessment of evidence, and a willingness to challenge assumptions and assertions made by management and others and that is called professional scepticism according to Brazel (2022). Professional scepticism has also been defined by Agustina (2021) as an attitude that includes a questioning mind, being alert to conditions that may indicate possible misstatement due to error or fraud, and a critical assessment of the evidence. Professional scepticism allows fraud detection, audit quality, objectivity, risk assessment and continuous improvement (Stevens. 2019). This has been supported by Hardies et al (2021), professional scepticism helps in detecting fraud and errors, maintaining public trust, preventing material misstates and adapting to evolving risks. According to Brazel (2022), professional scepticism supports informed decision-making by providing reliable and accurate findings, which is essential for stakeholders and builds trust and credibility in the audit process, ensuring that financial reporting remains transparent and reliable.

Competency

According to Wong et al (2020), competency it’s refers to the combination of knowledge, skills, abilities, and behaviors that enable an individual to perform their job effectively.  Long et al (2020), defined competency as the ability to apply knowledge and skills effectively to complete a task or achieve a goal. In the auditing context, it has been defined by Karsenti et al (2020), as the ability of an auditor to apply relevant knowledge, skills, and judgment to effectively carry out their duties. It also has been called the essential knowledge, skills, and abilities that auditors must possess to perform their duties effectively and deliver high-quality audit services. Competency in auditing allows for accurate reporting, effective risk assessment, and efficient and effective audits (Boudet al. 2023). This is also in line with Redman et al (2021), competency in auditing allows quality assurance, regulatory compliance, professional credibility and continuous improvement.

Auditors ability to prevent fraud

Auditors’ ability to prevent and detect fraud is called internal auditors’ capacity to identify potentially fraudulent activities before they occur and to uncover them if they have taken place (Hashim; 2019).  Kassem (2021), defined auditors’ ability to prevent and detect fraud as the ability to possess the skills, knowledge, and ethical standards to identify and mitigate risks that could lead to fraudulent activities. This ability is backed up by internal auditors’ attributes such as experience, ethics, professional scepticism, and competency. This has been supported by Bauer (2020), ability of internal auditors to prevent and detect fraud is significantly enhanced by their key attributes.

As this research is using internal auditors’ attributes of auditors in SMEs in Mutare Showground, there are high chance that their ability to prevent and detect fraud is low or poor.  This is normally because internal auditors in small and medium-sized enterprises (SMEs) ability to prevent and detect fraud is often hindered by several challenges. Many SMEs lack the resources to employ qualified or experienced internal auditors, resulting in a workforce that may not possess the necessary ethical behaviour and a sceptical mindset or training to identify complex fraudulent activities (Sule, 2019). Coffee (2019), also said that the limited scope of internal audits in SMEs can lead to insufficient evaluation of internal controls, leaving vulnerabilities unaddressed. According to Khaksar (2022), the often-informal nature of processes in smaller organizations may also contribute to a lack of documented procedures, making it difficult for auditors to establish effective controls. The pressure to maintain profitability in a competitive environment can also lead to a culture that prioritizes short-term gains over robust risk management practices (Hashim, 2019). Internal auditors in SMEs may struggle to effectively prevent and detect fraud, exposing the organization to greater risk.

Despite the perceived limitations, research has demonstrated that internal auditors in SMEs can effectively prevent and detect fraud when proper structures are implemented. Contrary to common assumptions by Mwangi (2021), found that smaller audit teams in SMEs often develop deeper institutional knowledge and closer relationships with operations, enabling them to spot irregularities more quickly than their counterparts in larger organizations. The focused scope of SME operations can be advantageous, as internal auditors can dedicate more attention to high-risk areas and develop specialized expertise in industry-specific fraud schemes (Kumar & Patel, 2022). Williams (2020), revealed that SME internal auditors frequently demonstrate higher levels of professional scepticism due to their direct exposure to daily operations and closer working relationships with management. Additionally, Zhao et al (2023), found that the informal nature of SME processes can enhance fraud detection, as auditors can more easily identify deviations from established patterns without being constrained by rigid corporate structures. Implementing cost-effective technology solutions has also significantly improved SME auditors’ capabilities, with Ahmed (2022), reporting that automation tools have enabled smaller audit teams to achieve detection rates comparable to those of larger enterprises. Rodriguez (2023), discovered that SMEs internal auditors often receive more direct support from management, leading to stronger ethical cultures and more effective fraud prevention programs.

Theoretical Framework

Agency Theory

Agency theory was first developed by Stephen Ross and Barry Mitnick in 1976, focusing on the relationship between two parties, the agent and the principal. The agency must act on behalf of the principal, with the expectation that the agents will make decisions in the principal’s best interest achieving the shareholder’s objective of wealth maximization (Raimo et al, 2021). Its main aim was to explain globally the relationship between managers, directors and the shareholders of the company (Zogning, 2022). A conflict of interest exists when directors and managers want to focus on short-term objectives to boost their bonuses. In order to mitigate the conflict of interest between directors, managers and shareholders, internal auditors need to put in place internal controls to prevent and detect the misdoing of the directors and managers of the company to achieve company objectives. According to Huong et al (2022), internal auditors act as the check on managers and directors to reduce agency problems. This has been supported by the latest Cardiberry Report UK, (2023); King Code IV SA (2016) and Zimcode (2015) that auditors should solve the agency problem and work in the best interest of the owners of the company. Internal auditors review processes, identify risks and ensure that controls are in place. Internal auditors must act independently, honestly and faithfully when curbing the agency problem without the influence of managers and directors of the company (Ma’Ayan et al, 2016). This theory has been used by many researchers in various departments such as accounting, finance, economics and law. This theory has been supported by Anie et al (2021), saying that the participation of female directors reduces agency costs as they provide better monitoring roles. Panda et al (2017), also said that the conflict of interest and agency cost rise due to the separation of ownership from control, different risk preferences, information asymmetry and moral hazards.

For internal auditors to work effectively and efficiently for shareholders to solve the conflict of interest between the shareholders, and managers and directors, internal auditors’ attributes such as experience, ethics, professional scepticism, and competency are crucial in solving the problem. This has been supported by Agustina (2021), stating that experienced auditors can effectively assess the risks and controls in place, identifying potential areas of weakness to ensure that shareholders’ objectives are met whilst ethics ensures that auditors act with integrity and objectivity, holding management accountable for their actions. According to Surya et al (2021), a sceptical approach helps auditors uncover hidden information and challenge misleading representations to the shareholders by managers and directors of the company whilst competency helps internal auditors analyze complex financial information and identify inconsistencies or red flags.

Fraud Triangle Theory

The diagram shows three conditions which increase the chances of committing fraud which are pressure, opportunity and rationalization.

According to Awang et al (2020), the fraud triangle theory was developed by Donald Cressy in the 1970s to understand the reasons behind the committing of fraud by people. Donald Cressy stated that three conditions can increase the chances of committing fraud which are pressure, opportunity and rationalization.

Pressure

According to Kotter et al (2020), pressure is a force being applied over an area while Hanson (2020), defined pressure as a feeling of stress or urgency and Donald Cressey said that pressure is the root cause for people to commit fraud (Awang et al, 2020). According to Knisley et al (2022), different types of pressure include personal stress, employment stress, and external pressure. Setiawan (2019), further examines personal and corporate forces as causes of fraud commitment.  For example, pressure can be greed, living beyond one’s means, large expenses or personal debt, family financial problems or health, drug addiction and gambling. Several studies (Hollow 2014; Azam2018; Anindya et al2019 and Gill et al (2016), pinpoint pressure as the major reasons for committing fraud. They also stated that many sources of pressure include financial strain, personal issues, company culture and career advancement.

The fraud triangle theory helps internal auditors identify the root cause of committing fraud which could be prevented at early stages rather than being detected at a later stage as prevention is better than cure (Chelation, 2023). According to Kagias et al (2022), fraud theory can help to identify red flags especially when employees are living beyond their salary capabilities could cause them to commit fraud. However internal controls will be tailored towards specific pressure (Sanchez-Aguayo, 2021). In order to understand the pressure and be able to identify red flags (Kagias et al, 2022), internal auditors should have experience, competency and professional scepticism in the field (Adikaram, 2024).

However, according to Schunter (2016), some argue that pressure cannot be the only reason for committing fraud, some people commit fraud because of a lack of ethical standards or maybe because someone has an opportunity to commit fraud regardless of being under pressure or not.

Opportunity

The other element that contributes to committing fraud is opportunity according to the Fraud Triangle Theory in 1970 (Awang et al, 2020). Tunley (2011), defined an opportunity as circumstances that allow fraudulent activities to take place. According to Wang (2021), people are more likely to commit fraud if they see a chance of getting away with it. The lower the risk of getting caught, the higher the chances of committing fraud (Kagias et al, 2022).

Usually, the chances of committing fraud increase when there are weaknesses in the company system. This mostly happens when the company does not take necessary action when employees break the rules (Sujeewa, 2018). According to Kagias et al (2022), weak controls make it possible for employees to temper with them to commit fraud. There is support from Lokanan (2015), that even if someone is pressured to commit fraud, they cannot do it unless there is an opening door.

Through experience internal auditors can identify red flags and patterns associated with fraudulent activities, reducing opportunities for fraud to go unnoticed and an ethical framework discourages fraudulent behaviour by promoting a culture of honesty and accountability within the organization (Kim et al, 2022). Professional scepticism encourages auditors to critically assess information and challenge management assertions, which can uncover opportunities for fraud being backed up by competency (Braze 2022). All this shows that internal auditors’ attributes are crucial in achieving organizational goals.

Rationalization

According to Schunter (2016), rationalization is coming up with good reasons for our unethical behaviour. It can be described as justification and an excuse for the wrongdoing (Cheliatsidou, 2023). For example, someone can commit fraud because he has no money to feed the family so they are left with no other option except stealing. Knisley et al (2022), state that justification it’s a way to run away from crime which is not valid in the eyes of the law as it’s a lack of ethical behaviour. According to Mansor et al (2015), rationalization is an indirect indicator of committing fraud, internal auditors cannot assess a person’s thoughts. This means that professional scepticism is a required tool by internal auditors when preventing and detecting fraud (Brazel et al, 2021).

Red Flag Theory

Red Flag Theory has been developed by many authors in different dimensions which are Karen Horney in 1937, John Bowlby in 1951, Aaron Beck in 1967, Dorothy in 1979, Hendrik Van Brenen in 1983 and Amir Levine in 2006. In all of their findings, a conclusion was made that red flags are warning signs of a potential problem. Izebige et al (2020), defined red flags as a systematic way of detecting the symptoms or any signs of fraudulent activities within the organizational settings. According to Oktaroza (2022), red flags are indicators or warning signs that may represent fraud or irregularities. He also stated that fraud detection does not always get a bright spot as fraudsters use many ways to commit fraud and this gives the need to understand and recognize red flags within a business organization. Professional scepticism is a requirement to spot these red flags.

According to Moyes et al (2019), they are several examples of red flags within an organization which auditors must take note which include excessive personal debt, material lifestyle with low income, gambling, alcohol and drugs addiction, greediness, lack of job rotation, lack of supervision, lack of training, lack of auditing firms, lack of personal ethics and morality, too much power and resistance to stress. According to Perlo-Freeman (2029), red flags are mainly divided into pressure and opportunities linked with triangle fraud theory. All these red flags cannot be detected or prevented if internal auditors are not competent enough to identify them. This has been supported by Wong (2020), stating that competent auditors are knowledgeable about common fraud schemes, enabling them to identify patterns or behaviours that may indicate fraudulent activity.

According to Finucane et al (2020), red flags are important to internal auditors as they are indicators of fraudulent activities. This means that auditors must assess the risk associated with each red flag to put effective control measures in place. For internal auditors to identify red flags, audit experience, competency and scepticism are requirements (Faradina 2021).

Conceptual framework

This study examines the impact of internal auditor’s experience, ethics, professional scepticism, and competence on their ability to detect and prevent fraud. The conceptual framework of this research can be seen in Figure 1 as follows.

Independent variables                                                  Dependent variable

Fig 1:- The diagram illustrates the relationship between the independent and dependent variables.

The effect of auditor experience on fraud detection and prevention

According to Faradina (2021), audit experience is an experience gained from the number of tasks that have been handled by the auditor. Auditors with a lot of experience can detect fraud as soon as it occurs in the company and can provide a better explanation than auditors with little experience. The more auditors perform their roles, the higher the level of experience owned by the auditors. Auditors without experience may not necessarily be able to find fraud in the company.

Experience is a powerful tool in the hands of an internal auditor. According to Wahidahwati et al (2020), experienced auditors can recognize patterns of fraudulent behaviour, identify red flags, and assess the effectiveness of internal controls. Daoust (2019), stated that experienced auditors have a keen eye for anomalies and inconsistencies, allowing them to uncover hidden risks and potential fraud schemes. In drawing on their experiences, internal auditors can anticipate emerging threats and develop strategies to mitigate them (Kim et al, 2020). Additionally, experienced auditors can effectively communicate with management and other stakeholders, building trust and fostering a culture of integrity and accountability through their knowledge and insights, experienced auditors play a crucial role in preventing and detecting fraud, safeguarding the organization’s assets, and protecting its reputation.

Due to this, Kartikarini et al (2021), stated that internal auditors’ experience improves fraud detection. These results indicate that the auditors must have good audit experience when conducting an audit. Auditors with a lot of experience can find out various audit problems in more depth, besides those auditors will find it easier to follow increasingly complex developments.

H1: Auditor experience has a positive effect on preventing and detecting Fraud

The effects of auditor ethics on fraud detection and prevention

Ethics is related to morals that become the guide for a person or a group of nature to regulate their behaviour and benchmarks in assessing the goodness or badness of an action (Morley, 2020). An auditor must comply with ethical rules in carrying out their duties to facilitate in detection of fraud (Susanto et al, 2021). According to Helmiati & Helmiati (2021), auditor ethics improves fraud detection and prevention. This shows that if an auditor follows the regulated professional ethics, it will guarantee the quality and increase the ability to detect and prevent fraud owned by the auditor. According to Agustia et al (2020), the application of ethical rules owned by an auditor affects quality audit results. The quality of the work audited by an auditor is influenced by the ethical application of an auditor. Detection and prevention of fraud in the audit of the company’s financial statements requires the auditor to have ethics because ethical auditors have integrity and objectivity in carrying out their work. According to Arief et al (2020), the application of ethical rules is defined as principles, rules, and moral values applied to regulate the behaviour of an auditor in carrying out his duties. Three values must be applied by auditors which are independence, integrity and professionalism The ethics of auditors when auditing reports can affect audit results to be of higher quality (Khadilah et al, 2020). This means that the quality of the audited financial statements can be influenced by the ethics of the auditors.

However, ethical rules can be effective in fostering a culture of integrity and discouraging fraudulent behavior but they are not a foolproof solution. Jaganjac (2024), argue that sole reliance on ethical rules can be insufficient in preventing and detecting fraud as individuals may still circumvent ethical guidelines, particularly in environments with weak internal controls or a lack of oversight. According to Trevino (2021), ethical rules can be subjective and open to interpretation, which may lead to inconsistent application and enforcement and fraudsters often employ sophisticated techniques to conceal their activities, making it difficult to detect them solely through adherence to ethical principles.

H2: The application of ethical rules has a positive effect on preventing and detecting Fraud.

The effect of professional scepticism on fraud detection and prevention

According to Adikaram (2024), professional scepticism is a crucial mindset for anyone in a field where critical thinking and questioning assumptions are important. This means that auditors can question where it seems suspicious and deepen their investigation. This shows that the higher the professional scepticism of an auditor, the higher they will prevent and detect fraud. Audit professional requires auditors to exercise professional scepticism which includes an attitude of questioning mind and objectively evaluating the adequacy, competence, and relevance of evidence according to the International Standard on Auditing 200 (ISA200).

 The International Auditing and Assurance Standard Board (IAASB), explain that professional scepticism is an attitude that always questions the validity of data and evaluates audit evidence critically. According to Umri (2022), the higher the attitude of scepticism owned by the auditor, the greater the fraud that will be detected and prevented. According to Kartikarini et al (2021), the attitude of professional scepticism improves the ability of an auditor to detect fraud. The higher the attitude of professional scepticism that the auditor has, the more signs of fraud around him will be prevented and detected. According to Fullerton and Durtschi (2020), auditors with high scepticism will increase their ability to detect and prevent fraud by developing additional information searches when faced with signs of fraud.

Auditors must have an attitude of professional scepticism in carrying out their audit duties, especially for fraud prevention and detection and auditors with a sceptical attitude will not immediately believe the assertions given by management (Brasel, 2019). Auditors will always look for additional information and evidence that can support management’s assertions. Auditors with an attitude of professional scepticism in making decisions and providing opinions will be more careful, the auditor will also seek additional information and evidence to ensure that the audited financial statements are free from all forms of misstatement (Wells 2019).

According to Martinov‐Bennie et al (2022), professional scepticism is a vital attribute for internal auditors in preventing and detecting fraud as they work with a questioning mind, challenging assumptions, identifying inconsistencies, and uncovering hidden issues. A sceptical mindset allows auditors to critically evaluate evidence, seek additional information, and avoid taking things at face value (Agustina et al, 2021). This helps to identify red flags, such as unusual transactions, unexplained variances, or inconsistencies in documentation. In maintaining a sceptical attitude, internal auditors can play a crucial role in safeguarding the organization’s assets and reputation, reducing the risk of fraud, and ensuring the accuracy and reliability of financial information (Hoos, 2019).

According to Helmiati et al (2021), professional scepticism improves an auditor’s ability to detect fraud, because the higher the scepticism of an auditor, the higher the level of the auditor’s ability to detect fraud.

However, according to Rinard (2022), a sceptical mindset can sometimes lead to over-cautiousness or excessive doubt, potentially resulting in missed opportunities to identify legitimate financial practices. Hoos (2019), also stated that auditors may become insensitive to scepticism over time, leading to a perfunctory approach that fails to engage deeply with the nuances of each audit. According to Hardies (2021), the increasing complexity of financial transactions and fraud schemes can overwhelm even the most sceptical auditor, making it difficult to discern between genuine anomalies and normal variations in data and an auditor’s scepticism may be undermined by organizational pressures or relationships with clients, which can compromise their objectivity and lead to complacency in scrutinizing suspicious activities.

H3: Professional Scepticism Has a Positive Effect on Fraud Prevention and Detection

The effect of auditors’ competency on fraud detection and prevention

According to Hariyani et al (2024), audit competency refers to the knowledge, skills and behaviour an auditor needs to effectively perform their duties. It’s a combination of technical expertise, professional judgement and personal qualities that allow auditors to conduct high-quality audits and deliver valuable insights (Gunawan et al, 2021). According to Noch et al (2022), auditors’ competence improves the ability of auditors to prevent and detect fraud.  The higher the audit competence in the field the higher the quality of audit in preventing and detecting fraud (Handoko et al, 2022). This means that the auditor must have expertise in auditing and sufficient knowledge of the field being audited.

All this has been supported by the fact that competent auditors possess knowledge, skills, and judgment to identify and assess risks, evaluate controls, and uncover fraudulent activities and their technical expertise allows them to analyze complex financial data, understand accounting principles, and apply relevant auditing standards (Marwa, 2019). According to Maresch (2020), strong analytical and problem-solving skills enable internal auditors to identify anomalies, inconsistencies, and red flags that may indicate fraudulent behaviour and by staying updated on industry trends, regulatory changes, and emerging fraud schemes, competent auditors can proactively address potential risks and safeguard the organization’s assets.

However, highly skilled auditors can be limited by the inherent complexity and sophistication of modern fraud schemes, which can outstrip their training and experience (Mandal, 2024). According to Maulid (2021), auditors may face time constraints and workload pressures that hinder their ability to conduct thorough investigations, regardless of their competence and competent auditors might still rely heavily on management representations and insufficiently challenge assumptions, leading to potential oversight of fraudulent activities. The effectiveness of competent auditors can be compromised by a lack of organizational support or a culture that discourages questioning and scepticism (Rashid, 2022).

H4: Auditors’ Competency Has a Positive Effect on Fraud Detection

Empirical Evidence

A research project by Anto La Ode (2020), on ”The Auditor’s Ability to Detect Fraud through the Use of Independence, experience, Professional Scepticism and Workload”, states that to gather information, a survey to collect data used by distributing questionnaires to a wide range of accountants and auditors. He gathered that audit experience and professional scepticism positively influence the auditor’s ability to prevent and detect fraud.

In contrast to Anto La Ode, Kurniadi (2019), focused on fraud detection using the red flag theory. They developed a model to assess the likelihood of fraud using the red flag approach. The study involved 370 auditors from major accounting firms. They found out that an auditor’s evaluation of internal controls is crucial when estimating fraud risk.

Another study from Zimbabwe by Mabika (2015) researched “Fraud and fraud prevention strategies in Zimbabwe Local Authorities” and his main focus was on the causes of fraud, using the fraud triangle theory. He concluded that to reduce the level of fraud, management must get involved, create systems, teach about the systems and monitor local authorities. He also concluded that local authorities must employ the correct people with the required skills and knowledge in their jobs as well as pay salaries and allowances on time.

Summary

The chapter compiled a variety of academic works on the role of internal auditors in preventing and detecting fraud. The researcher explained the effectiveness of internal auditor’s attributes in preventing and detecting fraud supporting theories from different scholars. The next chapter looked at the research methodology.

METHODOLOGY

Introduction

A plan is a blueprint for action giving direction on how the outcome will be achieved and the same applies to methodology. Methodology is a system of methods and principles on how a certain task will be completed. It can also be procedures, applications and rules on how research is to be carried out. This chapter focuses on the research methodology that the researcher is going use for the study. The focus is mainly on research design, research approach, population, sampling strategies and data collection methods that will be used by the researcher when carrying out the project. This chapter will also look at measures to be used such as formulas and scales.

Research design

Research design has been defined as a structure of research that is a glue that holds all the elements of the research project together (Islamia, 2016). The research design is a plan for the research (Bloomfied, 2019). According to Abbott et al (2012), research design is a plan for gathering and analysing information that directly addresses research questions whilst being efficient and organized.

As research design outlines the research process from formulating the questions to the conclusion, it is important because it acts as a bridge between the question one is trying to answer and the data collected. The design clarifies how your questions relate to the information you gather and what methods are best suited to analyze it and find the answer (Dannels, 2018). According to Mayers et al (2013), three main types of research design are exploratory, descriptive and explanatory. These designs represent different approaches to gathering and analyzing data to answer research questions. This research chooses a descriptive approach.

The research will involve collecting data using interviews and questionnaires distributed to a sample of internal auditors in SMEs in Mutare Showground. The research will include questions that assess the auditors’ current experience, competency, professional scepticism and ethics in preventing and detecting fraud in business organizations. The research will utilize both closed-ended and open-ended questions to gather quantitative and qualitative data. The closed-ended questions will provide structured responses for quantitative analysis, while the open-ended questions will allow auditors to elaborate on their experiences and provide detailed insights (Freites et al, 2023).

The sample will be selected using stratified sampling where the population is divided into homogeneous subgroups or strata on certain variables and random samples are taken from each stratum mostly using a simple random sampling method (Singh et al, 2014). Here, the population will be divided into five groups which are food and beverage sellers, manufacturers, service providers, sports bodies and farmers. After this, random samples are taken from these five groups using simple random sampling and then the samples from each group are combined to form the overall sample. According to Tipton (2013), stratified sampling is more accurate as it ensures that each subgroup or stratum is represented in the sample and it also allows a more diverse representation of the population.

Research Approach

Three types of research approaches can be used in the research project process which are quantitative approach, qualitative approach and mixed approach (Leavy et al.2022).  According to Pandey et al (2021), quantitative research involves gathering numerical data and analysing it using statistical techniques and its main objective is to measure variables, test hypotheses, and determine the cause-and-after connections whilst qualitative approach centres on gathering non-numerical data such as texts, images and audio recordings to comprehend the meaning of experiences, delving into phenomena, and gaining insights into people’s perspectives. For this approach, a mixed approach will be used which integrates quantitative and qualitative methods to offer a comprehensive understanding of research questions (Dawadi et al, 2021). In combining the strength of both approaches, researchers can address complex issues using a more diverse and extensive data set, leading to a deeper understanding of the topic.

Geographical Area

Geographical area refers to an area of boundary (Gallotta et al, 2022) and the research will be using Mutare Showground when conducting the research. Mutare Showground is a multi-purpose event venue in the eastern highlands of Zimbabwe, within the Manicaland province. Mutare is a vibrant economic hub with various types of businesses and it is mainly focused on mining, agriculture and manufacturing. However, this research focuses on Small and Medium Enterprises (SMEs) within Mutare Showground because SMEs are highly vulnerable to fraud due to less robust internal controls and lack of sufficient resources to prevent and detect fraud. The decision to study SMEs in this specific area is motivated by limited internal audit practices and data accessibility. However, to some extent using SMEs could have limitations such as data confidentiality as SMEs may be hesitant to share sensitive information about internal controls or potential fraud incidents due to confidentiality concerns and lack of established function as SMEs might not have a dedicated internal audit function, making data collection on existing practices difficult.

Target Population

According to Zhao et al (2013), a target population is a specific group of individuals or items that a researcher or marketer is interested in studying or researching. Tang et al (2018), defined a target as a subset of the larger population that shares characteristics relevant to the research or marketing goal. This project mostly focusing with in internal auditors in SMEs in Mutare Showground such as food and beverages sellers, manufacturers, service providers, sports bodies and farmers. The population is indicated in Table 1.0 below according to Mutare Showground Management Records in 2023.

Table 3. 1 Target Population

Organization	Population
Food and beverage sellers	26
Manufacturers	23
Service providers	26
Sports bodies	11
Farmers	23
Total	103

Sampling

According to Mujere (2016), sampling is a research technique where a small group is selected from the larger population for analysis. Instead of using the entire population researchers use sampling to gather data more efficiently and make conclusions about the large population based on the sample’s characteristics. Lohr (2021), stated that two types of sampling are probability sampling and non-probability sampling. Here, the researcher is using probability sampling which is a method of sampling where each element has an equal chance of being selected (Alvi, 2016). Probability sampling better represents the population and reduces bias in population representation. According to Mujere (2016), different types of probability sampling are simple random sampling, stratified sampling and systematic sampling. In this project, the researcher will use stratified sampling.

According to Singh et al (2014), stratified sampling is where the population is divided into homogeneous subgroups or strata on certain variables and random samples are taken from each stratum mostly using a simple random sampling method. Here, the sample will be selected using stratified sampling where the population is divided into homogeneous subgroups or strata on certain variables and random samples are taken from each stratum mostly using a simple random sampling method (Singh et al 2014). Here, the population will be divided into five groups which are food and beverage sellers, manufacturers, service providers, sports bodies and farmers. After this, random samples are taken from these five groups using simple random sampling and then the samples from each group are combined to form the overall sample. According to Tipton (2013), stratified sampling is more accurate as it ensures that each subgroup or stratum is represented in the sample and it also allows a more diverse representation of the population.

Sample size

Yamane’s (1967) model will be used to calculate sample size. According to Louangrath et al (2017), the Yamane model is a statistical tool used in research to determine the sample size for a study. It helps the researcher to figure out how many people are needed to get accurate results that can be applied to the entire group.  The resultant sample size will represent the target population. The study used this sample size method due to its simplicity.

Formulae

n=N/1+(e)²    Where N is the population size, e is the level of precision, n is the sampling size

Given N= 103, n= 0.05 (95% confidence level)

n=103/1+103(0.05)²

n=65

Hence sample size is 65

Table 3. 2 Sample selection

Respondents	Population	Sample size selected
Food and beverage sellers	26	16
Manufacturers	23	15
Service providers	20	12
Sports bodies	11	7
Farmers	23	15
Total	103	65

The table above 3.2 shows that the sample size shows the sample size according to the Yamane model.

Data Collection Methods

Various types of data collection methods can be used when conducting research.  Paradis et al (2016), defined data collection methods as techniques and processes used to gather data for research, analysis or decision-making process which include surveys, interviews, questionnaires, observation, experiments and focus groups. In this research, the researcher will be using questionnaires and interviews as data collection methods.

Interviews

An interview has been defined as a formal conversation between two or more people, typically with one person the interviewer. The interviewer will be asking questions to obtain information from participants who provide answers (Sunkersing et al, 2024). It allows for a more in-depth exploration of the topic and can provide qualitative insights into the experiences and perspectives of auditors. This means that structured interviews will be conducted with auditors in SMEs in Mutare Showground and these interviews will be done face-to-face.

Questionnaires

According to Kronsick (2018), questionnaires are a valuable tool for gathering information from people. They are essential questions used to collect data in a wide range of contexts such as market research, social sciences, education and healthcare. There are two main types of questionnaires namely structured questionnaires and unstructured questionnaires with open-ended questions to allow for more detailed responses (Pattern 2016). Therefore, the researcher is using structured questionnaires as they are inexpensive and quick to administer, efficiently collecting standardized data, and allowing for anonymity which can encourage more honest responses.

Data Collection Procedure

The first step of data collection for the researcher will be to seek approvals from the organizations concerned. 65 questionnaires will be distributed physically to the organizations. Completed questionnaires will be collected later on.

Reliability and Validity

Carroll and Goodfriend (2022) describe reliability as a concept describing how replicable a study is. If a study can be repeated and the same results are found, the study is considered reliable. Studies can be reliable across time and reliable across samples. Validity of research is an evaluation of how accurate the study is (Price et al, 2015). It describes the extent to which the study measures what it intends to measure. Both internal and external validity will be used by the researcher. Internal validity will be restricted to what is supposed to be measured and external validity of research findings refers to the data’s ability to be generalized across persons, settings and times (He et al2021). The method to be used by the researcher to improve reliability and validity is through pilot testing.

In order to guarantee the accuracy and dependability of the data, a pilot study was conducted beforehand, as suggested by Lowe (2019). 12 questionnaires were distributed randomly to internal auditors in Mutare Showground to test the instrument, aligning with Eldridge et al (2016), recommendation to avoid using the target population for pilot studies. This pilot phase helped refine ambiguous questions and verify the effectiveness of the data collection methods.

It proactively identified potential challenges, allowing for the implementation of mitigating strategies before the main study commenced. The pilot study also provided valuable insights into the required time and resources, aiding in effective planning, as noted by Bitzenbauer (2023).

To further assess the reliability of the research methods, Cronbach’s alpha was calculated using SPSS software. The instrument achieved a reliability score of 0.845 (85%), falling within the acceptable range of 0.80 to 0.90 as suggested by Vaske et al (2017).

Measurements

According to Dabiri et al (2019), measurements refer to formulae and scales which can quantify variables of interest. These measurements provide a standard and a numerical representation of the data collected. In this research, the researcher is using the Likert scale.

Likert Scale

According to Yin (2013), the Likert scale is a tool used by researchers to gauge participants’ attitudes, reactions, opinions, and perceptions regarding a certain subject. He proposed that to maximize the effectiveness and efficiency of the study, more information is needed in the response when utilizing the Likert scale to get a person to the goal level of agreement with the proclaimed assertion. For respondents to grasp the questions, Huettner (2015) underlined the significance of accuracy while framing the questions. It was used by respondents to indicate agreement or disagreement with statements. The participants will be asked to rate their level of agreement on the scale, typically ranging from strongly agree to strongly disagree.

Table 3.3: Likert scale

Strongly Agree	Agree	Neutral	Disagree	Strongly Disagree
5	4	3	2	1

The table above shows a table of Likert scale

Data presentation and analysis

For simple interpretation, the researcher will gather both qualitative and quantitative data, which will be evaluated using bar graphs, pie charts, and tables. The researcher chose graphs, tables and pie charts because they are simple to understand and display the trends leading to a more accurate conclusion. Tables will be employed to summarize the data since they make it simple to compare variables. These graphs, charts and tables will be generated using SPSS v21 and Excel.

Ethical Consideration

Confidentiality: According to Corley (2022), confidentiality it’s the principle of protecting sensitive information from unauthorized access, disclosure and use, keeping it a secret. This means that all information obtained during the research is treated with confidentiality and is not disclosed to unauthorized individuals, protecting the integrity and privacy of the data.

Informed Consent: Information should be obtained with consent from participants, the purpose of the study should be outlined on the voluntary nature of participation, and how their data will be used, ensuring that they understand and agree to participate.

Avoiding Bias: According to Smith et al (2014), bias is a tendency of favouritism often unfairly. Brighton et al (2015), defined it as preconceived opinions or judgments that can influence how things should be done. Therefore, any biases that could impact the results which result in a lack of credibility and reliability should be avoided.

Respect for Participants:  When carrying out research, respect should be considered. According to Engelman et al (2019), respect it’s a fundamental human value that involves recognizing, appreciating and valuing others treating them with dignity, kindness and consideration. This means that when carrying out the research will be considering the rights and dignity of participants throughout the research process, considering their well-being and ensuring that they are not harmed or exploited.

Transparency: Kosack (2014), defined transparency as the quality of being open, clear and honest in revealing information hiding nothing or being secretive. This involves disclosing any conflicts of interest, sources of funding, or affiliations that could impact the research outcomes, maintaining transparency and honesty in the study.

Compliance with Regulations: This involves all relevant laws, regulations, and ethical guidelines governing, ensuring that research is conducted ethically and by established standards from all the SMEs to be involved when carrying out the research.

Environmental considerations

According to Rupert et al (2016), ethical considerations are the factors related to the natural world that must be considered when making decisions or undertaking actions. This means that there shall be compliance with environmental rules and regulations by the Environmental Management Agency (EMA). This research will be conducted in a manner that is environmentally friendly ensuring zero pollution of any form. Research materials will be disposed of at designated areas.

Gender Considerations

Anyone interested and qualified shall participate in the research process regardless of being a woman or a man.

Chapter Summary

The main elements of the study’s research technique are outlined in this chapter. Data sources and research methodologies have been identified, and the research methodology for the study has been explained. Discussions were held regarding the target population, data collection techniques, data presentation, and analysis. The following chapter will provide and examine the main research findings.

DATA PRESENTATION AND ANALYSIS

Introduction

With the SMEs in Mutare Showground as a case study, this chapter presents data and analyses research findings to conclude the effect of internal auditor’s attributes in preventing and detecting fraud in business organisations. Several data analysis techniques are used in analysing the findings such as tables, graphs and pie charts. Transcripts and analysed information from interviews are also used in conducting this study, the searcher used IBM SPSS version 21 and Amos V18 to produce output tables. These output tables were descriptive statistics tables, demographics analysis tables, hypothesis test summary figures, bar graphs and pie chart this chapter interpreted. Research findings are in-depth analyzed, and connected to research goals and research questions.

Response rate analysis

Table 4.1 below shows the overall response rate for the study. 

Sample	Questionnaires distributed	Questionnaires returned	Response rate
65	65	54	54/65 x 100 = 83. 08%

Source: Researcher’s Compilation, (2024)

As shown in the table above, the researcher issued the questionnaire to a target population, using a calculated sample size of 65 participants. Out of the 65 questionnaires distributed, 54 participants responded and returned the questionnaire. This gave the study an overall response rate of 83.08 % in total which is above the threshold of 75%. This means about 16.92 % of the target market did not respond, probably because they were too reluctant to share their opinions                     with the researcher or the questionnaires were sent out during their busy and tight schedule as finance is considered the second busiest profession (Hearns2021).

Demographics analysis

The questionnaires included a section that asked participants about their background such as their gender, age, work experience and level of education. This information is crucial for this study as it helps to find the relationship between these factors and emotional intelligence and understand the characteristics of the sample representing the target population.

Gender

The pie chart below shows the male and female representation in this research.

Source: Primary Data, (2024)

 

Figure 4.1 Gender of Respondents.

After collecting and analysing data, the results indicate that the response rate for men is higher than that of women, with men having a response rate of 61.1% compared to 38.9 for women. These findings align with demographic analysis by Benjamin (2021) which concluded that men are more prevalent in the management of SMEs. This observation was further supported by Zimstats (2022), who reported that women’s overall labour rate participation in Zimbabwe is 16.6% lower than that of men. This disparity may stem from the limited educational opportunities available to women compared to men, according to Zimstats (2022).

In order to prevent bias in the study’s findings, gender equality must be considered when doing research, according to Wiknman (2015).

Age range of respondents

The bar graph below shows the age range of respondents in this research.

Source: Primary Data, (2024)

Figure 4.2 Age Range of Respondents.

The bar graph above indicates that individuals aged 21-30 years comprise the largest segment of SMEs in Mutare Showground at 37%, followed by those aged 31-40 and 41-50 years at 22.2%, then below 20 years with 11.1 % and lastly its 51-60 with 7.4%. Analysing the information above, clearly shows that SMEs are highly dominated by people aged 21-30 this may be due to the high unemployment rate in Zimbabwe where the soon graduated from colleges and universities cannot get jobs and they open their small businesses and work as an accountant (internal auditors). According to Oywe (2023), UNICEF Zimbabwe (2021), and Pswaya (2023), over 60% of the country’s population is under the age of 30 and youth continue to face obstacles to realise their economic potential. On the other hand, many formal companies require an internal auditor with 3 to 5 years of work experience and as a result, most people aged 21-30 will work in SMEs until they get the experience required in big companies and some even reach 30 years or enter 31-50 years in the informal sector because employers of big companies require someone with experience from a reputation organisation (Halkiv, 2023). These findings also explain the declaration by Zimstats, (2023), that people that are 15-19 years old participated less in the labour force whilst those aged 35-39 years were the most dominant participants. However, when put together, it can clearly show that SMEs in Mutare Showground are dominated by the youth.

Field

The bar graph below in Fig 4.3 shows the fields or segments which the researcher carried on the research

A bar graph of the fields of research

Source: Primary Data, (2024)

Fig 4.3 Fields or segments

The bar graph above shows the segments in which the research was carried in. The bar graph shows that F&BS and manufacturing companies participated the most in this research with 25.9% followed by services and sports with 18.5% then lastly farming with 11.1%. Mostly the participation is according to the frequency. F&BS and manufacturing are more in Mutare Showground as compared to others so is their participation according to Mutare City Council (2023).

Years in Business

The pie chart below shows the number of years individuals have been in the work industry.

A pie chart 4.4 of years in business

Source: Primary Data, (2024)

Fig 4.4 Years in Business

The data presented above in the pie chart reveals that individuals with 2-5 years in business constitute the largest group at 40.7%. This is followed by less than 1 year with 33.3% whilst those between 6-9 years are 11.1% and those above 9 years are 14.8%. This is mostly in line with the age of those who are 21-30 who soon graduated. On the other hand, also employers in big companies require work experience, (Halkiv,2023) which is why those 2-5 are dominated in SMEs.

Education level

The bar graph below shows the level of education of people working in SMEs in the Mutare showground. Table 4.5 of the level of education

Source: Primary Data, (2024)

Fig 4.5 level of education

The research results indicated that individuals with diplomas comprised the largest segment of SMEs in Mutare Showground with 50% followed by those with degrees who has 25.9%. Those with masters and above comprise 5.6 then lastly those with O’ level and A’ level with 7.4% and 11.1% respectively. The findings suggest that those with diplomas and degrees dominated the market which is linked to the fact that the soon graduates are not getting jobs easily. It shows also that there are few highly educated people as they are just 5.6% who could be the owners of the businesses. On the other hand, there are also a few with O level and A level which has been supported by Zimstats (2022), there are few employees in the field below the age of 20 years.

Results relating to the objectives of the study

Auditors ability to prevent and detect fraud

This section measures the dependent variable of the study. Table 4.6 below shows descriptive statistics for auditors’ ability to prevent and detect fraud.

The scale used was: 1 – Strongly Disagree, 2 – Disagree, 3 – Neutral, 4 – Agree and 5 – Strongly Agree.

Table 4.2 Descriptive statistics: Auditor’s ability to prevent and detect fraud.

	N	Minimum	Maximum	Mean	Std. Deviation
AA1: The rate of fraud has decreased significantly for the past 2 years	54	1.00	5.00	3.0741	1.21083
AA2: We have detected financial malpractices for the past 2 years	54	1.00	5.00	2.5556	1.31273
AA3: Our internal auditors’ efforts to combat fraud are bearing fruits	54	2.00	5.00	4.0370	.91038
AA4: Our employees have been at the forefront of detecting fraud	54	1.00	5.00	2.4259	1.12605
Valid N (listwise)	54

Source: Primary Data, (2024)

In order to find out the level of internal auditors’ ability to prevent and detect fraud in SMEs in Mutare Showground, descriptive statistics table was utilized. The table above shows the descriptive statistics on auditors’ ability to prevent and detect fraud as compiled by IBM SPSS Statistical version 21.  As shown in the table, the mean for the rate of fraud decreasing for the past 2 years is 3.07 so moderately auditors have reduced fraud for the past 2 years. A mean of 2.56 shows that the auditors have detected financial moderately well but there is room for improvement. A mean of 4.04 shows that internal auditors are putting great effort into combating fraud areas bearing fruits. There is also a mean of 2.43 shows that employees are less involved in detecting fraud which also means that there is a need for improvement.

Overall, the standard deviations of all the variables measuring the auditor’s ability are greater than 1 and this indicates that the majority of respondents were not in agreement with the internal auditor’s ability to prevent and detect fraud in SMEs in Mutare Showground. The results indicate that there is high variability, inconsistency and potential risks in auditors’ performance so need for training and improvement which has been supported by (Mohdi, 2020) saying that auditors need training to prevent and detect fraud effectively.

This has been supported by Sule (2019), in a literature review stating that many SMEs lack the resources to employ qualified or experienced internal auditors, resulting in a workforce that may not possess the necessary ethical behaviour and a sceptical mindset or training to identify complex fraudulent activities. Coffee (2019), in Chapter 2 also said that the limited scope of internal audits in SMEs can lead to insufficient evaluation of internal controls, leaving vulnerabilities unaddressed. According to Khaksar (2022), the often-informal nature of processes in smaller organizations may also contribute to a lack of documented procedures, making it difficult for auditors to establish effective controls and, the pressure to maintain profitability in a competitive environment can lead to a culture that prioritizes short-term gains over robust risk management practices (Hashim, 2019). Internal auditors in SMEs may struggle to effectively prevent and detect fraud, exposing the organization to greater risk.

However, it has been argued in the literature review that internal auditor in SMEs can be effective as they are focusing on a small group of employees (Kleinman,2020). This has been supported by (Bauer,2020), stating that fraud is being prevented and detected in SMEs through outsourcing.

Objective 1: To determine how auditors’ experience influences the auditor’s ability to prevent and detect fraud.

Table 4.7 below shows descriptive statistics measuring the first variable of the study (Experience).

NB: Scale: 1 – Strongly Disagree, 2 – Disagree, 3 – Neither Agree nor Disagree, 4 – Agree, 5 – Strongly Agree

Table 4.3 Descriptive statistics: Experience.

	N	Minimum	Maximum	Mean	Std. Deviation
EX1: Sufficient is experience necessary for conducting an audit role?	54	2	5	4.13	.802
EX2: Experience with auditing standards is essential for an auditor’s work?	54	3	5	4.11	.744
EX3: Experience in various industries is beneficial for an auditor?	54	3	5	4.26	.678
EX4: The ability to identify potential red flags is crucial for an auditor and it needs experience?	54	3	5	3.83	.720
EX5: Experience in consistency in applying auditing standards and procedures is important for an auditor?	54	3	5	3.83	.720
EX6: Adequate training is necessary for an auditor to gain experience and perform their duties effectively?	54	3	5	4.28	.685
EX7: Sufficient experience is necessary for preventing and detecting fraud?	53	2	5	4.30	.696
Valid N (listwise)	53

Source: Primary Data, (2024)

Descriptive statistics in Table 4.3 indicate internal auditors support that sufficient experience is necessary to prevent and detect fraud effectively which is shown by a mean of 4.13 under EX1. They also supported that following and having experience with auditing standards is essential as it ensures consistency and transparency as supported by a mean of 4.11 under EX2. It has been shown by the mean 4.26 under EX3 that it is beneficial for auditors to have experience in various industries. The ability to identify red flags is crucial aided by experience as shown by a mean of 3.83 under EX4. Mean 3.83 under EX5 shows that auditors are supporting experience in the consistency of applying auditing standards in business organisations. Adequate training is necessary for auditors to gain experience and perform their duties effectively as shown by mean 4.28 under EX6. Most of the internal auditors working in Mutare Showground have supported that sufficient experience is necessary for preventing and detecting fraud as shown by a mean of 4.30 under EX7.

Overall, the standard deviation of all the variables measuring the importance of experience in auditing is close to 1 and this indicates that the majority of respondents agreed that experience is necessary in preventing and detecting fraud in business organisations. Results indicate that auditors are supporting that experience is one of their immune to the ability to prevent and detect fraud. This has been supported by Jackson (2017), experience enhances scepticism, familiarises with regulations, and improves judgement and credibility.

This has been supported by Ainscow (2020) in the literature review that experience helps in preventing and detecting fraud. According to Indah (20220), in the literature review also seasoned auditors have encountered various scenarios and challenges, equipping them with insights into common fraud schemes and red flags. This is also in line with Kim (2022), experience is one of the necessities in preventing and detecting fraud. However, it has been argued in the literature review (Neubauer, 2019) that overreliance on experiences can sometimes lead to a bias or a failure to recognize new and emerging fraud schemes. This has also been supported by Gutek (2022), lack of diversity in experience can limit an auditor’s ability to address novel risks.

Table 4.4 Chi-Square Tests: Experience vs ability to prevent and detect fraud. Chi-Square Tests- Experience and fraud

	Value	df	Asymp. Sig. (2-sided)
Pearson Chi-Square	114.213a	96	0.010
Likelihood Ratio	91.951	96	0.015
Linear-by-Linear Association	2.688	1	0.035
N of Valid Cases	54

a. 117 cells (100.0%) have an expected count of less than 5. The minimum expected count is .02.

According to Turhan (2020), the chi-square test is a statistical method used to determine if there is a significant association between observed and expected frequencies in one or more categories. Here, it is being used to investigate the relationship between experience and the ability to prevent and detect fraud. Pearson Chi–Square is 114.213 with 96 degrees of freedom and a p-value of 0.010. Likelihood Ratio is 91.951 with 96 degrees of freedom and a p-value of 0.015.

Both tests indicate a significant association between experience and the ability to prevent and detect fraud. The p-values are less than 0.05, suggesting that the observed differences are unlikely to be due to chance.

The Linear-by-Linear Association Test Statistic is 2.688 with 1 degree of freedom and a p-value of 0. 035. This test suggests that there is a significant linear relationship between experience and the ability to prevent and detect fraud. This means that as experience increases, the ability to prevent and detect fraud also usually increases linearly which has been supported by Kartikarini et al (2021), in chapter 2.

Based on the chi-square tests, there is evidence that experience is associated with the ability to prevent and detect fraud. This association appears to be linear, meaning that as experience increases, so does the ability to prevent and detect fraud. However, chi-square does not tell the strength of the association. This gives room to what has been said in a literature review by Neubauer (2019), experience is based on past information which does not guarantee the ability to prevent and detect fraud.

Qualitative analysis Objective 1: To determine how auditors’ experience influences the auditor’s ability to prevent and detect fraud.

THEME1: Do you think experience is necessary and effective in identifying fraud?

Respondents agreed that experience plays a significant role in identifying and mitigating fraud risks. “Professionals with a background in fraud detection often possess a deeper understanding of the tactics used by fraudsters, which can enhance the ability to recognize suspicious activities. For instance, having prior experience allows us to develop intuition and analytical skills that are essential for spotting anomalies in financial data and employee behaviour”. The respondents were of the view that experience allows the ability to adapt to new tactics. “Experienced individuals are more likely to adapt to new fraud schemes and technologies and quickly learn and implement new strategies to combat evolving threats”. This is in line with Ainscow (2020), where experience has been necessary in helping internal auditors prevent and detect fraud as it leads to practical knowledge, exposure to various scenarios, problem-solving skills, industry familiarity and relationship building. The same fact has been supported by Gutek (2022), auditors with experience can prevent and detect fraud effectively though it argued by Neubauer (2019), past information does unnecessary determine the future.

THEME 2: Does your experience as an internal auditor influence your ability to identify and prevent potential risks?

Internal auditors responded that experience has enhanced risk awareness as they develop a keen awareness of various frauds that can affect the organisation. “Experience allows me to recognize red flags and patterns that indicate fraudulent activities due to familiarity”.

They also responded that experience has provided them with a deep understanding of internal controls and their importance in fraud prevention and detection. “I have been involved in assessing the effectiveness of internal controls which taught me how to identify weaknesses that could be exploited by fraudsters. In so doing, I have helped the organisation to strengthen their defenses against fraud”.

This has been supported by Daoust (2019) in the literature review that experienced auditors can recognize patterns of fraudulent behaviour, identify red flags, and assess the effectiveness of internal controls.

Objective 2: To determine the extent to which auditors’ ethics influence the auditor’s ability to prevent and detect fraud.

Table 4.9 shows results regarding ethics.

NB: Scale: 1 – Strongly Disagree, 2 – Disagree, 3 – Neither Agree nor Disagree, 4 – Agree, 5 – Strongly Agree

Table 4.5 Descriptive Statistics: Ethics

	N	Minimum	Maximum	Mean	Std. Deviation
ET1: It is crucial for auditors maintain high level of integrity and objectivity in their work?	54	3	5	4.56	.664
ET2: Avoiding a situation that could compromise independence or create conflict of interest is necessary?	54	1	5	3.72	.979
ET3: High ethical standards are essential within the auditing profession?	54	1	5	3.74	1.216
ET4: Auditors should strictly adhere to ethical guidelines provided by their profession?	54	2	5	3.81	.953
ET5: It is important for auditors to maintain the confidentiality of client information at all times?	54	1	5	4.46	.770
ET6:  Auditors should compromise their principles under pressure?	54	2	5	4.02	.901
ET7: Auditors are required to be aware of the Code of Ethics for Professional Accountants?	54	.1	5	3.11	.945
ET8:  Ethical behavior is essential for auditors to perform their duties effectively?	54	1	5	4.48	.693
Valid N (listwise)	54

Source: Primary Data, (2024)

Results from Table 4.5 above indicate that auditors must maintain a high level of integrity and objectivity as shown by ET1 with a mean of 4.56. Internal auditors also support that it is necessary to avoid situations that would compromise independence or create a conflict of interest as shown by a mean of 3.72 under ET2. Ethical standards are essential within the auditing profession and auditors should strictly adhere to ethical guidelines provided by their profession with a mean of 3.74 and 3.81 indicated in EX3 and EX4 respectively. Confidentiality about client’s information should be maintained all the time and they should know the Code of Ethics for Professional Accountants as shown by mean of 4.46 and 3.11 under ET5 and ET7 respectively. A mean of 4.02 shows that auditors should not compromise their principles at any cost especially when under pressure and this shows that ethical behaviour is essential for auditors to perform their duties effectively with a mean of 4.48.

The descriptive statistics indicate a strong support for ethical conduct among the respondents. The high mean scores and low standard deviations across all eight ethical statements suggest a widespread consensus on the importance of integrity, independence, confidentiality, and adherence to professional guidelines. These findings highlight the robust ethical foundation within the auditing profession and underscore the respondents’ recognition of the crucial role of ethics in maintaining the profession’s integrity and public trust.

These results are in line with Helmiati & Helmiatii (2021), auditor ethics improves fraud detection and prevention though Trevino (2021) argued that ethical rules can be subjective and open to interpretation, which may lead to inconsistent application. This has been supported by Jaganjac (2024) that a sole reliance on ethical rules can be insufficient in preventing and detecting fraud as individuals may still circumvent ethical guidelines, particularly in environments with weak internal controls or a lack of oversight. Ethical rules with strong internal controls can help in preventing and detecting fraud.

Table 4.6 Chi-Square Tests: Ethics vs ability to prevent and detect fraud.

Chi-Square Tests- Ethics and ability to prevent and detect fraud
	Value	df	Asymp. Sig. (2-sided)
Pearson Chi-Square	88.125a	96	.001
Likelihood Ratio	81.701	96	.003
Linear-by-Linear Association	.000	1	.015
N of Valid Cases	54
a. 117 cells (100.0%) have an expected count of less than 5. The minimum expected count is .02.

According to Table 4.6, Pearson Chi-Square and Likelihood Ratio Tests. Pearson Chi-Square is 88.125 with 96 degrees of freedom and a p-value of 0.001 and Likelihood Ratio is 81.701 with 96 degrees of freedom and a p-value of 0.003. Both tests indicate a significant association between ethics and the ability to prevent and detect fraud. The p-values are less than 0.05, suggesting that the observed differences are unlikely to be due to chance.

The linear-by-linear Association Test Statistic is 2.232 with 1 degree of freedom and a p-value of 0.015. This test suggests that there is a significant linear relationship between ethics and the ability to prevent and detect fraud. This means that as ethical behavior increases, the ability to prevent and detect fraud also increase in a linear fashion

Based on the chi-square tests, there is strong evidence that ethics is associated with the ability to prevent and detect fraud. However, the linear-by-linear association test suggests that this relationship is not linear. This could mean that ethics might influence fraud prevention and detection in more complex ways than a simple linear relationship.

Based on the chi-square tests, there is strong evidence to suggest that ethics is associated with the ability to prevent and detect fraud. The association is linear suggesting that ethical behaviour is effective in preventing and detecting fraud. This is in agreement with Susanto et al (2021) in literature review stating that auditors must comply with ethical rules in carrying out their duties to facilitate fraud detection and also according to Helmiati (2021), auditor’s ethics has a positive effect on fraud detection and prevention. However, according Trevino (2021), ethical rules can be subjective and detection of fraud is not solely based on adherence to principles. After weighing the results from this research and other researchers, ethics has positive effect on preventing and detecting fraud.

Qualitative analysis Objective 2: To determine the extent to which auditors’ ethics influence the auditor’s ability to prevent and detect fraud.

THEME: Is maintaining objectivity, independence and integrity important in preventing and detecting fraud?

Internal auditors are in agreement that maintaining objectivity, independence and integrity is important in preventing and detecting fraud and this has supported by Arief et al, (2020) that shows that if an auditor follows the regulated professional ethics, it will increase quality and the ability to detect and prevent fraud owned by the auditor. “Objectivity, independence and integrity are important as they draw a thin line between auditors and thieves. I repeat, an auditor without objectivity, independence and integrity is of no difference to a thief, how can a thief catch another thief rather they can team up. This is why ethical behavior is essential under auditing”. Internal auditors concluded that objectivity, independence and integrity does prevent and detect fraud. This has been supported by the fact said in literature review of this research by Morley, (2020) that ethics help in preventing and detecting fraud though it need to be backed with effective internal controls (Susanto et al, 2021)

Objective 3: To establish the effect of professional scepticism on the auditor’s ability to prevent and detect fraud.

Table 4.11 below shows descriptive statistics for professional scepticism.

NB: Scale: 1 – Strongly Disagree, 2 – Disagree, 3 – Neither Agree nor Disagree, 4 – Agree, 5 – Strongly Agree

Table 4.7 Descriptive statistics: Professional Scepticism vs auditors’ ability to prevent and detect fraud

	N	Minimum	Maximum	Mean	Std. Deviation
PS1: Auditors should approach audits with questioning mind and be critical with the information provided?	54	1	5	4.09	.937
PS2: Auditors are expected to be skeptical of management explanation and justifications that seem unreasonable?	54	1	5	4.00	0.699
PS3: Auditors should proactively identify and investigate unusual transactions or discrepancies?	54	1	5	3.39	0.906
PS4: It is important for auditors to challenge management assumptions if they appear unsupported by evidence?	54	1	5	3.96	0.965
PS5: Auditors should document their audit procedures and reasoning clearly and concisely?	54	1	5	3.33	0.987
PS6: Auditors should critically evaluate evidence gathered before forming a conclusion?	54	3	5	4.24	.699
PS7: Maintaining professional skepticism is essential for ensuring audit quality?	54	3	5	4.43	.602

Source: Primary Data, (2024)

Results from Table 4.7 above show that auditors should approach audit with a questioning mind and be critical of the information which is being shown by a mean of 4.09 under PS1. Auditors are expected to be sceptical of the management explanation and justification that seem unreasonable with a mean of 4 under PS2. On the other hand, auditors should proactively identify and investigate unusual transactions or discrepancies as shown by a mean of 3.39 under PS3. It has been shown by the mean of 2.96 under PS4 that it is important for auditors to challenge management if they present information with unsupported evidence. Auditors should document their audit procedures and reasoning concisely as shown by a mean of 3.33 under PS5. When auditors are given any information, they should critically evaluate the evidence gathered before giving a conclusion as supported by a mean of 4.42 under PS6. Most auditors support that maintaining professional scepticism essential for ensuring audit quality as shown by a mean of 4.43 under PS7.

Overall, the descriptive statistics indicate a strong consensus among respondents regarding the importance of professional scepticism in auditing. The high mean scores for all seven statements suggest that auditors recognize the need to approach their work with a questioning mind, critically evaluate information, and be sceptical of unreasonable explanations. They also acknowledge the importance of proactively identifying and investigating unusual transactions, challenging management as necessary, and documenting audit procedures and reasoning. These findings highlight the significance of professional scepticism in maintaining audit quality and preventing and detecting fraud.

The results about professional scepticism on auditors’ ability to prevent and detect fraud are in line with Umri (2022), that the higher the attitude of scepticism owned by the auditor, the greater the fraud that will be detected and prevented. According to Kartikarini et al (2021), the attitude of professional scepticism improves the ability of an auditor to detect fraud. However, it has been argued by Husak (2020) that a sceptical mindset can sometimes lead to over-cautiousness or excessive doubt, potentially resulting in missed opportunities to identify legitimate financial practices. This has been supported by Hoos (2019), in literature review stating that auditors may become insensitive to scepticism over time, leading to a perfunctory approach that fails to engage deeply with the nuances of each audit. This shows that professional scepticism is essential in preventing and detecting fraud but it is not a foolproof safeguard against fraud.

Table 4.8 Chi-Square Tests: Professional Scepticism vs ability to prevent and detect fraud.

Chi-Square Tests- Professional Scepticism and ability to prevent and detect fraud.
	Value	df	Asymp. Sig. (2-sided)
Pearson Chi-Square	88.960a	104	.004
Likelihood Ratio	85.820	104	.006
Linear-by-Linear Association	.527	1	.021
N of Valid Cases	54
a.      126 cells (100.0%) have an expected count of less than 5. The minimum expected count is .02.

The results in Table 4.8 show that Pearson Chi-Square is 88.960 with 104 degrees of freedom and a p-value of 0.004. while the Likelihood Ratio is 85.820 with 104 degrees of freedom and a p-value of 0.006. Both tests provide strong evidence of a significant association between professional scepticism and the ability to prevent and detect fraud. The observed differences between groups with different levels of professional scepticism are unlikely to be due to chance.

The Linear-by-Linear Association Test Statistic is 0.527 with 1 degree of freedom and a p-value of 0.21. This test suggests a strong positive linear relationship between professional scepticism and the ability to prevent and detect fraud. While there is a general trend of individuals with higher levels of professional scepticism being more effective in fraud prevention and detection, this relationship is strong.

Based on the chi-square tests, there is compelling evidence that professional scepticism is a significant factor in fraud prevention and detection. The linear-by-linear association test indicates that the relationship between these two variables is relatively strong and linear. This suggests that professional scepticism is important, though it might not be the sole determinant of fraud prevention and detection success.

From the literature review, by Durtschi (2020), auditors with high scepticism will increase their ability to detect and prevent fraud by developing additional information searches when faced with signs of fraud. This has been also supported by Umri (2022), the higher the altitude of scepticism owned by the auditor, the greater the fraud that will be detected and prevented. However, it has been argued by Hardies (2021), from the literature review that the increasing complexity of financial transactions and fraud schemes can overwhelm even the most sceptical auditor, making it difficult to discern between genuine anomalies and this is in line with Wells (2019), that professional scepticism can lead to overthinking thereby compromising the whole work According to this case, professional skepticism is essential in prevention and detection of fraud.

Qualitative analysis Objective 3: To establish the effect of professional scepticism on the auditor’s ability to prevent and detect fraud.

THEME: Do you think professional scepticism is important in preventing and detecting fraud?

The respondents agree that professional scepticism is important in preventing and detecting fraud as it encourages auditors to remain alert. “I think, professional scepticism is crucial as it uncovers information that appears favourable but could be misleading or fraudulent”.  This has been supported by Martinov‐Bennie et al (2022), professional scepticism is a vital attribute for internal auditors in preventing and detecting fraud as they work with a questioning mind, challenging assumptions, identifying inconsistencies, and uncovering hidden issues through Hoos (2019), also stated that auditors may become insensitive to scepticism over time which leads to inefficient.

The respondents supported that professional scepticism allows a deeper investigation into anomalies or unusual transactions. “I apply professional scepticism to dig deeper when encountering discrepancies or inconsistencies in financial data which would lead to the identification of red flags that might otherwise go unnoticed”. This also agrees with Brasel (2019), that professional scepticism is a vital attribute for internal auditors in preventing and detecting fraud as they work with a questioning mind, challenging assumptions, identifying inconsistencies, and uncovering hidden issues. However, too much questioning on simple things demotivates the management and directions of the company which could create intention between the two (Haltinner2021).

A conclusion can be drawn that professional scepticism is important in preventing and detecting fraud but it must be applied with a conscious mindset.

Objective 4: To determine the extent to which auditors’ competency influences the auditor’s ability to prevent and detect fraud.

Table 4.9below shows descriptive statistics for professional scepticism.

Table 4.13 Descriptive statistics: Competency vs fraud

	N	Minimum	Maximum	Mean	Std. Deviation
CO1: Auditors need to possess the necessary technical knowledge and understanding of accounting principles to perform a thorough audit?	54	1	5	3.39	.940
CO2: Auditors are expected to be confident in their ability to apply auditing standards and procedures consistently?	54	3	5	4.04	.643
CO3: Auditors should regularly attend training and development programs to enhance their skills?	53	1	4	3.51	.973
CO4: Proficiency in using auditing software is essential for auditors?	54	1	5	3.19	.892
CO5: Strong analytical skills are necessary for auditors to identify discrepancies?	54	1	5	3.93	.949
CO6: Auditors are expected to be confident in their ability to assess internal controls?	54	2	5	3.61	.878
CO7: Auditors need a thorough understanding of accounting principles and auditing standards?	54	3	5	4.07	.723
Valid N (listwise)	53

Source: Primary Data, (2024)

Descriptive statistics in table 4.9 indicate that auditors need to possess technical knowledge and understanding of accounting principles to thoroughly audit as shown by a mean of 3.39 under CO1. Auditors are expected to be confident in their ability to apply auditing standards and procedures consistently as shown with a mean of 4.04 under CO2. Auditors should regularly attend training and development programs to enhance their skills and be proficient in using auditing software essential for auditors as shown by mean of 3.5 and 3.19 under CO3 and CO4 respectively. Auditors should also have strong analytical skills to identify discrepancies as shown by a mean of 3.93. Having confidence in their ability to detect fraud is essential in preventing and detecting fraud with a mean of 3.61 under CO6.  Auditors also need a thorough understanding of accounting principles and auditing standards to prevent and detect fraud as shown by a mean of 4.07 under CO7.

Using all the above information, descriptive statistics indicate that respondents generally agree on the importance of auditor competency in preventing and detecting fraud. They acknowledge the need for technical knowledge, skill development, and proficiency in auditing tools. This has been supported in the literature review that a combination of technical expertise, professional judgement and personal qualities allows auditors to conduct high-quality audits and deliver valuable insights (Gunawan et al, 2021). According to Noch et al (2022), auditors’ competence improves the ability of auditors to prevent and detect fraud.

However, there is some variation in opinions on the importance of specific competencies, such as attending training programs and analytical skills in preventing and detecting fraud. However, it has been argued in the literature review that highly skilled auditors can be limited by the inherent complexity and sophistication of modern fraud schemes, which can outstrip their training and experience (Mandal, 20240). This has been supported by Maulid (2021), that competent might not work as auditors are only relying on information provided by the management. In conclusion, competence is important in prevention and detection of fraud.

Table 4.10 Chi-Square Tests: Competency vs ability to prevent and detect fraud.

Chi-Square Tests- Competency and ability to prevent and detect Fraud
	Value	df	Asymp. Sig. (2-sided)
Pearson Chi-Square	77.714a	88	.000
Likelihood Ratio	66.193	88	.001
Linear-by-Linear Association	.040	1	.013
N of Valid Cases	54
a.     108 cells (100.0%) have an expected count of less than 5. The minimum expected count is .02.

As shown in the table above, Pearson’s Chi-Square is 77.714 with 88 degrees of freedom and a p-value of 0.000. Likelihood Ratio is 66.193 with 88 degrees of freedom and a p-value of 0.001.

The results of the tests provide strong evidence of a significant association between competency and the ability to prevent and detect fraud. In simpler terms, the differences observed between individuals with different levels of competency are unlikely to be due to chance.

The Linear-by-Linear Association Test Statistic is 0.040 with 1 degree of freedom and a p-value of 0.013. This test suggests a strong, positive linear relationship between competency and the ability to prevent and detect fraud. There is a general trend of individuals with higher levels of competency being more effective in fraud prevention and detection, this relationship is strong.

Based on the chi-square tests, there is compelling evidence that competency is a significant factor in fraud prevention and detection. The linear-by-linear association test indicates that the relationship between these two variables is relatively strong and linear. This is in line with a literature review of this research according to Maresch (2020), strong analytical and problem-solving skills enable internal auditors to identify anomalies, inconsistencies, and red flags that may indicate fraudulent behaviour and by staying updated on industry trends, regulatory changes, and emerging fraud schemes as competent auditors can proactively address potential risks and safeguard the organization’s assets. This also has been supported by Marwa (2019), that competent auditors can analyse complex financial information to prevent and detect fraud.

 However, competency is important but it might not be the sole determinant of fraud prevention and detection success. This has been shown in the literature review of this research by Maulid (2021), that highly skilled auditors can be limited by the inherent complexity and sophistication of modern fraud schemes, which can outstrip their training and experience. Rashid (2022) ,also supported that sometimes the management might not prevent all the information which prevents internal auditors from preventing and detecting fraud.

Qualitative Analysis Objective 4: To determine the extent to which auditors’ competency influences the auditor’s ability to prevent and detect fraud.

THEME1: Do you think knowledge of accounting principles and auditing standards contributes to your ability to prevent and detect fraud?

The respondents have a view that the knowledge of accounting principles are fundamental because they provides a framework for recognising what constitutes normal behaviour within an organisation as understanding allows professionals to identify anomalies or irregularities that may indicate fraudulent activity. “I can say knowledge of accounting principles and auditing standards is essential as it helps to spot discrepancies. For instance, familiarity with revenue recognition principles can help auditors to spot discrepancies in reporting earnings and that could suggest manipulation”.

The respondents also agree that auditing standards are important such as IAS 2401 which emphasizes the need for auditors to consider fraud risks in the auditing process. “The standards are important as they guide auditors in designing procedures to respond to the identified risks”.

The internal auditors have supported that accounting and auditing standards are important as they equip professionals with tools to establish effective internal controls which are crucial in preventing fraud. “Understanding accounting principles and auditing standards is key in putting internal controls like understanding the duties of segregation of duties helping organisations to design processes that minimise opportunities for fraudulent activities”.

Overall, this means interviewers agree that knowledge of accounting principles and auditing standards contributes to your ability to prevent and detect fraud. This has been supported in a literature review by Maresch (2020), that strong analytical and problem-solving skills enable internal auditors to identify anomalies and Mouamer (2020), argues that the increasing complexity of business operations and the emergence of new technologies can challenge even the most skilled auditors.

As a result, auditor competence is essential, it must be complemented by a comprehensive approach that includes strong internal controls, effective risk management practices, and a robust ethical framework.

Hypothesis Testing

H1: There is a statistically significant positive correlation between experience and auditors’ ability to prevent and detect fraud.

H2: There is a statistically significant positive relationship between ethics and auditors’ ability to prevent and detect fraud.

 H3: There is a statistically significant positive relationship between professional scepticism and auditors’ ability to prevent and detect fraud.

H4: There is a statistically significant positive correlation between competency and auditors’ ability to prevent and detect fraud.

Regression Analysis

In hypothesis testing, the main objective is to determine the auditor’s ability to prevent and detect fraud through multiple regression. Multiple regression uses correlation to predict the values of variables.

Table 4.11: Model summary

Table 4.15 below illustrates the model summary for the multiple regression analysis.

Model Summary

Model	R	R Square	Adjusted R Square	Std. Error of the Estimate
1	.710a	.504	.510	.52114

Predictors: (Constant), Competency, Professional Scepticism, Experience, Ethics

According to table 4.15, R represents the correlation coefficient between the predicted values and actual values (Alsaqr,2021). In this case, R is 0,710, which indicates a strong positive relationship between the predictors (competency, professional skepticism, experience and ethics) and the outcome (auditors’ ability to prevent and detect fraud). R Squares represents the proportion of variance in the outcome that is explained by predictors (Karch,2020). Here, R Square is 0,504, meaning that 50.4% of the variation in the outcome can be accounted for by the predictors. This means that the other (100%-50.4%) 49.6% is accounted for by variables which are not part of this study.  The difference between adjusted R square and R is small (0.02) this indicate that the model best fit. The findings from the research indicate that a combination of competency, professional skepticism, experience, and ethics has significantly impact on internal auditors’ ability to prevent and detect fraud. This has been supported by (Alsaqr, 2021; Karch, 2020) that these attributes, when present in internal auditors can enhance their ability to identify vulnerabilities, assess risks, and implement effective controls and possessing a questioning mindset and strong ethical principles, internal auditors can uncover irregularities and protect organisational interests. This has been supported according to the literature review of this research by Bauer, (2020) saying that the ability of internal auditors to prevent and detect fraud is significantly enhanced by their key attributes. However, it’s important to recognize that other factors, such as organizational culture and the complexity of fraud schemes, also influence the effectiveness of fraud prevention and detection efforts. According to Ginanjar, (2023), cognitive biases, sophisticated fraud schemes, weak organizational cultures, resource constraints, and management interference can limit their effectiveness. As a result of this, it can be concluded that presence of key attributes is valuable in preventing and detecting fraud but does not guarantee it. Table 4.12 :- ANOVA^a Table 4.15 below illustrates the model summary for the multiple regression analysis. ANOVA^a

Model		Sum of Squares	df	Mean Square	F	Sig.
1	Regression	.976	4	.244	.898	.000b
	Residual	13.308	49	.272
	Total	14.284	53

a. Dependent Variable: Auditors Ability

In this analysis, the P value is less than 0.05 (P<0.000) and this indicates that R and R² between predictors and auditors’ ability to prevent and detect fraud variables is statistically significant. This indicates that the overall regression model is statistically significant. At least one of the independent variables is significantly related to the dependent variable.

The F-test result was .898 at 0.000 significance thus implying that the probability of results by chance is less than 0.0005.

The results suggest that the combined effect of competency, professional scepticism, experience, and ethics has a statistically significant impact on auditors’ ability. This has been supported in the literature review of this chapter that experience, professional scepticism, competency, ethics and competency can influence the internal auditor’s ability to prevent and detect fraud according to Kim et al (2020); Susanto et al (2021); Umri (2022), & Maresch (2020) respectively. This also has been supported by Kassem (2021), that internal auditors are impactful in preventing and detecting fraud.

However, even if all internal auditors’ attributes are available, auditors might not prevent and detect fraud effectively as resources available to internal auditors might make it difficult for internal auditors to identify and respond to sophisticated fraud attempts effectively ((Iskandar, 2022). This has been supported by Rahmawati (2020) that management representations could be falsely represented.

Due to this, it can be concluded that internal auditors’ attributes are effective in preventing and detecting fraud though there are some factors which can compromise them.

Table 4.13: Coefficients

Coefficientsa
Model		Unstandardized Coefficients		Standardized Coefficients	t	Sig.
		B	Std. Error	Beta
1	(Constant)	4.224	1.309		3.227	.000
	Experience	.280	.161	.251	1.735	.000
	Ethics	.115	.234	.071	.490	.000
	Professional Skepticism	.137	.161	.117	.847	.000
	Competency	.112	.253	.011	.117	.000
a. Dependent Variable: Auditors Ability

This table presents the results of a regression analysis, where the goal is to predict the “Auditor’s Ability to prevent and detect fraud” based on several independent variables: Experience, Ethics, Professional Scepticism, and Competency. According to Nieminen (2022), unstandardized Coefficients (B) are the raw coefficients that indicate the change in the dependent variable (auditor ability) for a one-unit increase in the independent variable, holding other variables constant. Standardized Coefficients (Beta) are coefficients standardized to have a mean of 0 and a standard deviation of 1, making them comparable across different variables (Ben-Shachar, 2020). They indicate the relative importance of each independent variable in predicting the dependent variable. T is the t-statistic, which measures the significance of each independent variable’s coefficient. A higher t-value indicates a more significant relationship. Sig, it’s the p-value, which represents the probability of observing a coefficient as extreme as the one calculated, assuming the null hypothesis (that the independent variable does not affect the dependent variable) is true. A lower p-value suggests that the independent variable is more likely to have a significant effect (Aga2024).

Therefore, the results show that one unit change in experience, ethics, professional scepticism and competency can lead to an increase in the ability to prevent and detect fraud. This has been supported by Alsaqr (2021), that a unit increase in experience, ethics, professional scepticism, and competency can lead to an increase in auditors’ ability to prevent and detect fraud. However, the relationship between these attributes and fraud detection is not always straightforward Knechel (2019). This has been supported in a literature review by Wahidahwati (2022), that there are other factors which need to be considered in preventing and detecting fraud.

H1: There is a statistically significant positive correlation between experience and auditors’ ability to prevent and detect fraud.

According to the table above, the significant value independent variable of the auditor’s ability to prevent and detect fraud (p-value < 0.05). This means that experience has a significant positive effect on the auditor’s ability to prevent and detect fraud. A beta value of 0.280 means that every unit increase in experience is associated with an increase in the auditor’s ability to prevent and detect fraud by 28%, even when controlling for other variables. Therefore, H1 is supported.  This has also been supported by La Ode et al (2020); Sulistyowati et al (2015) & Rahmawati (2020), that experience is needed for internal auditors to be efficient and effective in preventing and detecting fraud in business organisations and this also follows the literature review of this research.

H2: There is a statistically significant positive relationship between ethics and auditors’ ability to prevent and detect fraud.

 Ethics is also a significant predictor (p-value < 0.05). A beta value of .115 means that for every unit increase in ethics, the auditor’s ability to prevent and detect fraud increases by 12%. Therefore, H2 is supported. These results have been confirmed by DeZoort (2018); Sahla (2023) & Halbouni (2015) ’s findings where it was discovered that if ethics is implemented, auditors’ ability to prevent and detect fraud will be improved and this has been supported by Karsenti et al (2020), in chapter 2 that ethics is essential in preventing and detecting fraud.

H3: There is a statistically significant positive correlation between professional scepticism and auditors’ ability to prevent and detect fraud.

Professional Scepticism is another significant predictor (p-value < 0.05).  A beta value of .137 means that a one-unit increase in Professional Scepticism is associated with an increase in the auditor’s ability to prevent and detect fraud. Therefore, H3 is supported. The results confirm Agustina (2021); Pretnar (2014) & Noch (2022), where it was discovered that professional scepticism impacts auditor’s ability to prevent and detect fraud and this is in line with Hardies et al (2021), that professional scepticism helps in detecting fraud and errors.

H4: There is a statistically significant positive relationship between competency and auditors’ ability to prevent and detect fraud.

Competency is a significant predictor (p-value < 0.05). A beta value of .112 means that a one-unit increase in competency is associated with an increase in the auditor’s ability to prevent and detect fraud. Therefore, H4 is supported. This has been confirmed by Mui et al (2018) & Noch et al (2022,) that competency is required for auditors to prevent and detect fraud effectively and it’s in agreement with Long et al (2020), in the literature review that competency can help in preventing and detecting fraud in business organisations.

Hypothesis testing summary table

Hypothesis	Decision
There is a statistically significant positive correlation between experience and auditors’ ability to prevent and detect fraud.	Supported
H2: There is a statistically significant positive relationship between ethics and auditors’ ability to prevent and detect fraud.	Supported
H3: There is a statistically significant positive correlation between professional scepticism and auditors’ ability to prevent and detect fraud.	Supported
H4: There is a statistically significant positive relationship between competency and auditors’ ability to prevent and detect fraud.	Supported

 Chapter Summary

Chapter 4 concludes the data analysis section, which involved using descriptive statistics, graphs, charts, and tables to examine key issues like repines rates and demographics. The findings were interpreted given the research objectives and existing literature. Additionally, multiple regression analysis was employed to test hypotheses. Chapter 5 will delve into the study’s conclusions and their implications.

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

Introduction

This chapter summarizes the research and presents conclusions, implications, and recommendations based on the findings from Chapter 4 on the auditor’s ability to prevent and detect fraud in business organisations. It also discusses the study’s contributions to existing knowledge and suggests areas for future research. The summary includes the research objectives and key findings from the analysis. The conclusions are drawn from the research findings to provide a clear understanding of the topic. The recommendations, derived from the findings, offer practical and theoretical suggestions for action.

Summary of research findings

1. The study found that male respondents significantly outnumbered female respondents, with a response rate of 61.1% compared to 38.9% for women.
2. The majority of SMEs in Mutare Showground are owned and operated by young individuals aged 21-30 years, accounting for 37% of the respondents.
3. Most of the research participants were from the Food and Beverage Services (F&BS) and Manufacturing sectors, each accounting for 25.9% of the respondents.
4. A significant proportion of SMEs in Mutare Showground are relatively less experienced, with 40.7% of respondents having been in business for 2-5 years.
5. Individuals with Diplomas constitute the largest group of employees in Mutare Showground SMEs, accounting for 50% of the respondents.
6. Internal auditors in SMEs in Mutare Showground cannot prevent and detect fraud efficiently and effectively as proven by a mean of 3.023.
7. Experience is directly correlated to auditors’ ability to prevent and detect fraud as demonstrated by a beta value of (0.280; p-value < 0.050).
8. There is a direct relationship between ethics and auditors’ ability to prevent and detect fraud proven by (0.115; p-value < 0.05).
9. There is a direct relationship between professional scepticism and the auditor’s ability to prevent and detect fraud as shown by (0.137; p-value < 0.05).
10. Auditors’ competency is significantly correlated to auditors’ ability to prevent and detect fraud as demonstrated by (0.112; p-value < 0.05).

Conclusions

Objective 1: To determine how auditors’ experience influences the auditor’s ability to prevent and detect fraud.

Regarding the research findings, this study concludes that experience is positively correlated and a significant relationship exists between it and auditors’ ability to prevent and detect fraud. Therefore this means that internal auditors with experience can effectively prevent and detect fraud in business organisations. This means that the higher the experience, the better internal auditors can prevent and detect fraud in the business.

Objective 2: To determine the extent to which auditors’ ethics influence the auditor’s ability to prevent and detect fraud.

The research findings of this study concluded that auditors’ ethics influence auditors’ ability to prevent and detect fraud positively and significantly. This means that the higher the ethics auditors are, the more they can prevent and detect fraud.

Objective 3: To establish the effect of professional scepticism on the auditor’s ability to prevent and detect fraud.

This study also concludes that the effect of professional scepticism is directly correlated with auditors’ ability to prevent and detect fraud. This means that auditors’ ability to prevent and detect fraud is highly backed up with professional scepticism as it enables internal auditors to question transactions that seem valid.

Objective 4: To determine the extent to which auditors’ competency influences the auditor’s ability to prevent and detect fraud.

Based on the research findings, this study concludes that auditors’ competency is positively correlated to auditors’ ability to prevent and detect fraud. This means that there exists a direct relationship between auditors’ competency and auditors’ ability to prevent and detect fraud, with each one of them increasing as the other one increases.

Theoretical recommendations

This study has contributed to world knowledge as it comes up with a model for the auditor’s ability to prevent and detect fraud. The study provides valuable insights into the effectiveness of internal audit functions and their potential to validate theories like agency theory, fraud triangle, and red flag theory. Agency theory suggests that conflicts of interest may arise between principals (owners) and agents (managers). Internal auditors, as agents of the principal (the board of directors), can mitigate these conflicts by experienced auditors who are better equipped to identify and assess risks, including those arising from agency problems. A sceptical approach helps auditors question assumptions, challenge management assertions, and critically evaluate evidence, reducing the likelihood of being misled by self-serving behaviour.

The fraud triangle posits that fraud occurs when three elements converge pressure, opportunity, and rationalization. Internal auditors can influence these elements by ethics auditors as it enables internal to succumb to pressure which could lead to the compromise of standards. Competency can help internal auditors to identify and assess opportunities for fraud, such as weaknesses in internal controls or access to sensitive information and a sceptical mindset helps auditors question unusual transactions, inconsistencies, and red flags that may indicate fraudulent behaviour.

There is also red flag theory which suggests that certain indicators or warning signs can signal potential fraud. Internal auditors can effectively utilize red flag theory by using experience more likely to recognize red flags, such as unusual patterns, inconsistencies, or changes in behaviour. A sceptical approach encourages auditors to investigate red flags and gather corroborating evidence. Competency can assist auditors can assessing the significance of red flags and determining whether further investigation is warranted.

This study is unique in that it employs internal auditors’ attributes as a control variable. Focusing on internal auditors’ attributes shows the uniqueness of the study as previous studies just focused more on the roles of internal auditors in preventing and detecting fraud. However, besides looking at auditors’ attributes only other factors have to be considered such as external factors, strong corporate culture and advanced technology resolutions. This means that red flags can be effectively identified through experience, professional skepticism, competency and ethics

Practical recommendations

The following are the practical and policy implications of the study

Recruitment and Selection

Fraud risks and scandals are increasing day by day so there is a need to develop rigorous recruitment and selection processes to identify candidates with strong ethical values, professional scepticism, and relevant technical skills. Hiring experienced auditors who possess a deep understanding of the organization’s operations and industry-specific risks must be prioritized.

Continuous Professional Development

Fraud tactics are increasing in this dynamic world. It means that there is a need to invest in ongoing training and development programs to enhance auditors’ knowledge, skills, and abilities. There is also a need to provide opportunities for auditors to acquire new skills and certifications, such as Certified Fraud Examiner (CFE) or Certified Internal Auditor (CIA).

Ethical Culture

Mostly accountants are being caught in fraud scandals.  Due to this, there is a need to foster a strong ethical culture within the organization, emphasizing honesty, integrity, and accountability. Ethics training for all employees must be provided, including internal auditors, to reinforce ethical principles and encourage ethical behaviour. Clear policies and procedures must be provided also to ensure the independence and objectivity of the internal audit function and implement measures to prevent conflicts of interest and undue influence from management.

Limitations of the research

The research relied on a structured questionnaire with closed-ended questions. While this approach streamlined data collection and analysis, it restricted respondents’ ability to express nuanced opinions on auditors’ ability to prevent and detect fraud. They were confined to the provided options, limiting the depth of their responses. Additionally, the study’s focus on a specific subset of SMEs in Mutare Showground prevents generalizing the findings to SMEs in Zimbabwe and other countries.

Future Research Implications

The following future study implications given the discussed limitations

Future research should employ both structured and unstructured questions to gain a more comprehensive understanding of the impact internal auditors have in preventing and detecting fraud in business organisations. This combination allows respondents to express themselves more freely, potentially revealing valuable insights into commercial-customer loyalty, as suggested by Low (2019).

Chapter Summary

This chapter summarizes the study’s findings, practical applications, and limitations. It highlights how the research contributes to the prevention and detection of fraud in business organisations. Additionally, it identifies areas for future research to further explore internal auditors’ ability to prevent and detect fraud in businesses. The study concludes that there is a positive correlation between auditor’s attributes and their ability to prevent and detect fraud.

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APPENDICES

Research Project Questionnaire

 Research Topic: Investigating the role of internal auditors in preventing and detecting fraud in business organizations: A case study of SMEs in Mutare Showground.

Section A: Preliminary Research Questions               Please indicate your gender.

Female	Male

Please indicate the range of age in which you are in.

Below 20	21 -30	31 – 40	41 – 50	51 – 60

Which field are you in?

Food and beverage selling	Manufacturing	Service provision	Sporting	Farming

How many years have you been in the field?

Less than 1 year	2– 5 years	6– 9 years	More than 9 years

Please indicate your highest level of qualification

Ordinary level	Advanced level	Certificate	Diploma	Degree	Master

Other (specify)…………………………

Key: 1-Strongly Disagree. 2- Disagree. 3-Neutral. 4-Agree. 5-Stronly Agree

Section B: Experience

	1	2	3	4	5
EX1: Sufficient experience necessary for conducting an audit role?
EX2: Experience with auditing standards is essential for an auditor’s work?
EX3: Experience in various industries is beneficial for an auditor.
EX4: The ability to identify potential red flags is crucial for an auditor and it needs experience?
EX5: Experience in consistency in applying auditing standards and procedures is important for an auditor?
EX6: Adequate training is necessary for an auditor to gain experience and perform their duties effectively?
EX7: Sufficient experience is necessary for preventing and detecting fraud?

 Section C: Ethics

		1	2	3	4	5
(i)	Is it crucial for auditors maintain high level of integrity and objectivity in their work?
(ii)	Is avoiding a situation that could compromise independence or create conflict of interest necessary?
(iii)	Are high ethical standards essential within the auditing profession?
(iv)	Should auditors strictly adhere to ethical guidelines provided by their profession
(v)	Is it important for auditors to maintain the confidentiality of client information at all times?
(vi)	Should auditors compromise their principles under pressure?
(vii)	Are auditors required to be aware of the Code of Ethics for Professional Accountants?
(viii)	Is ethical behavior essential for auditors to perform their duties effectively?

Section D: Professional Skepticis

	1	2	3	4	5
PS1: Auditors should approach audits with a questioning mind and be critical of the information provided?
PS2: Auditors are expected to be sceptical of management explanations and justifications that seem unreasonable?
PS3: Auditors should proactively identify and investigate unusual transactions or discrepancies?
PS4: Auditors need to challenge management assumptions if they appear unsupported by evidence?
PS5: Auditors should document their audit procedures and reasoning concisely?
PS6: Auditors should critically evaluate the evidence gathered before forming a conclusion?
PS7: professional scepticism is essential for ensuring audit quality?

Section D: Competency

		1	2	3	4	5
(i)	Do auditors need to possess the necessary technical knowledge and understanding of accounting principles to perform a thorough audit?
(ii)	Are auditors expected to be confident in their ability to apply auditing standards and procedures consistently?
(ii)	Should auditors regularly attend training and development programs to enhance their skills?
(iv)	Is proficiency in using auditing software essential for auditors?
(vi`)	Are strong analytical skills necessary for auditors to identify discrepancies?
(vii)	Are auditors expected to be confident in their ability to assess ability to assess internal controls?
(viii)	Do auditors need a thorough understanding of accounting principles and auditing standards
(ix)	Are auditors expected to be confident in their ability to identify potential risks during an audit?

Section E: Auditors Ability To Detect Fraud

		1	2	3	4	5
(i)	Has the rate of fraud decreased significantly in recent years
(ii)	Have the organization been successful in detecting financial malpractices?
(iii)	Are internal efforts to combat fraud proving effective?
(iv)	Have employees played a significant role in detecting fraud?

You can add other general or specific information regarding the above subject that you feel has been insufficiently addressed or needs further clarification. ………………………………………………………………………………………………… …………………………………………………………………………………………

 Thank you

APPENDIX 2

1. Do you think experience is necessary and effectiveness in identifying fraud.?
2. Does your experience as an internal auditor influence your ability to identify and prevent potential risks?
3. Is maintaining objectivity, independence and integrity important in preventing and detecting fraud
4. How do you approach a situation where the suspect of fraud involves relatives, friends and superiors?
5. Do you think professional scepticism is important in preventing and detecting fraud?
6. In your experience, does a lack of professional scepticism affect auditors’ ability to detect and prevent fraud?
7. Do you think knowledge of accounting principles and auditing standards contributes to your ability to prevent and detect?