Abstract:
The purpose of the study was to establish the relationship between Control Activities and Fraud
Control in Financial Institutions (Banks and Microfinance Institutions). Control Activities
analyzed were Internal Checks and Segregation of Duties. The researchers set study objectives
and hypotheses that assisted in establishing the relationship that was required. The research
study was conducted using both quantitative and qualitative approaches. Stratified random
sampling was used and data was collected using Questionnaires from the managers and
supervisors, in various financial institutions of Meru town, Kenya. A sample of 84 respondents
from a population of 106 was used for this study. Data was analyzed through SPSS using Chi
square and Descriptive statistics. In analyzing the selected control activities it was found there
were enhanced internal checks that involved peer review and verifications of transactions to
reduce chances of forgery, also it was revealed that proper segregation of duties and job
rotation have been embraced to increase transparency. In conclusion Research study found
that there are continuous checks to ensure controls are working well. The study established a
significant relationship between control activities and fraud control.
