ABSTRACT

 The purpose of the study was to establish the relationship between internal control systems (!CS) and fraud prevention in financial institutions. Internal control systems (ICS) was analyzed based on its component which include; internal control and internal auditing. The Researcher set out to establish how internal control systems (ICS) could be used to control fraud in Internal Board of Revenue. The researcher set study objectives and hypotheses that assisted in establishing the relationship sort. The research was conducted using both quantitative and qualitative approaches using random sampling, ANOV A and Descriptive Research Designs. Data was collected using Questionnaires from the income tax department, planning department. other revenue department. A sample of 40 respondents from a population of 45 was used for this study. Data was analyzed using the Statistical Package for Social Scientists (SPSS) and conclusions were drawn from tables and figures derived from the Package. The study established a significant relationship between ICS and fraud prevention. The researcher recommends that board of internal revenue should ensure that effective internal control system is guaranteed, also directors of the board of internal revenue should constantly evaluate the internal control system in order to detect fraudulent practices which have the capacity of jeopardizing the future of the board. The study also recommends that Managers and Directors of board of intcrna! revenue should ensure recruitment of professionals in the field of tax computation and proper maintenance of open and closed account registers. Also, Managers and Directors of board of internal revenue should ensure strict control on the movement of ledger card and books of account.