Abstract:
This study was motivated by the need to raise the awareness among SMEs about internal fraud, the psychology behind every fraud and finally how to prevent and detect the fraud through internal controls. Since there are minimal studies conducted on the roles of internal control in fraud prevention and detection among Zimbabwean small and medium enterprises, this research was aimed at raising the awareness from management level of the SMEs and add more knowledge on the existing literatures on the internal control of SMEs. The major theories which were used in this study were the Fraud Triangle theory and the Fraud diamond theory. Literature was consulted from various authors such as Länsiluoto et al. (2022) who noted that, effective internal control decreases the risk of asset loss and promotes reasonable assurance of an entity achieving its financial reporting objectives. The study adopted pragmatism philosophy which employed descriptive research design, mixed research strategy which incorporates both quantitative and qualitative data collection methods. The sample was comprised of 52 management, employees and owners from SMEs in retail, wholesale, transport, carpentry, manufacturing, and other sectors operating in Masvingo Central Business District. Stratified random and cluster sampling techniques were used to collect data from the sample through questionnaire surveys and interviews. Data was analysed thematically and quantitatively through decretive and inferential statistics. Major findings revealed that, risk assessment has a positive impact on fraud prevention and detection, there is a strong and positive relationship between risk assessment and fraud prevention and detection. Findings further revealed that, risk assessment has a positive impact on fraud prevention and detection and it was revealed that there is a strong positive relationship between information and communication and fraud prevention and detection.Therefore based on the findings it is concluded that, assessment of risk helps in identification and analysis of relevant risks facing the business and helps the management to form a basis of the risks facing the business to be managed, segregation of duties minimizes the occurrence of fraud and misconduct in the SMEs and helps to prevent fraud or theft because it requires two people to collude in order to hide a transaction. The research recommends that, All SMEs that have no internal control system should engage an expert and install it and SMEs that have a weak internal control system should strengthen the system as a way of mitigating fraud happening.
