Published Paper Details:

Fraud in the financial activities causes tremendous losses to the business world and creates morale problems in the workplace. These losses are serious problems to organizations that need to be managed, controlled and monitored in order to rely on financial statements for making best business decision making. Hence, this study examined the role of financial audit in detecting and preventing fraud with reference to insurance firms in Ethiopia. To achieve the objective of this study, the researcher employed quantitative research approach with explanatory research design. The primary data was collected through self-administrated questionnaire from respondents selected using Simple random a Sampling technique in all 17 insurance firms in Ethiopia. Then, the multiple linear regression model result showed that out of five explanatory variables incorporated in the model, four variables like professional experience, training, certification of auditors and audit fee has positive and statistically significant influence on fraud detection and prevention. On other hand, one remaining variables which is objectivity and independence has positive and statistically insignificant effect on fraud detection and prevention of insurance firms in Ethiopia. Based on findings, the researcher forwarded possible recommendations to insurance firms in Ethiopia to improve professional experience, training, certification of auditors and audit fee more than current status since one unit increase in the variables leads to sound fraud detection and prevention.