Abstract:
Association of Certified Fraud Examiners report that a typical organization loses at least 5% its
annual revenue loss through occupational fraud. Further statistics indicate In a list of 22
industry categories, occupational fraud risk is highest in commercial banks than any other
industry globally. Occupational fraud risk is therefore a global problem. The problem is that
Kenya has the highest incidences of fraud is East Africa and that this vice continue to erode
investors and the overall financial intermediation role of commercial banks. In Kenya, fraud
contributes to 31.5% of the deterrents of global competitiveness. The study set to determine the
effect of bank size on occupational fraud risk in commercial banks in Kenya. A representative
sample of 30 banks out of the 43 commercial banks licensed by Central Bank of Kenya by June
30, 2012 was used in this study. Bivariate linear regression was used to test the null hypothesis;
fI-, there is no relationship between bank size and occupational fraud risk in commercial banks in
Kenya. The findings from this study are, a Cronbach's alpha of 0.97 for the stimulus variable, a
positive correlation of r=O.518 between bank size and occupational fraud risk. In addition the
study reports a significant 26.8% influence of bank size on occupational fraud risk in
commercial banks in Kenya. These results provide insights into the deterrent and management of
occupational frauds in Kenya and similar developing countries.