International Journal of Economics and Finance Vol. 1, Issue 3, 2013 http://www.ijsse.org ISSN 2307-6305 Page | 1 EFFECT OF BANK GROWTH ON OCCUPATIONAL FRAUD RISK IN COMMERCIAL BANKS IN KENYA David Ndungu Kiragu Jomo Kenyatta University of Agriculture and Technology Kenya. Kenneth Lawrence Wanjau Jomo Kenyatta University of Agriculture and Technology Kenya. Dr Mouni Gekara The East African University Kenya. Prof. Christopher Kanali Jomo Kenyatta University of Agriculture and Technology CITATION: Kiragu, D. N., Wanjau, K. L., Gekara, M., & Kanali, C. (2013). Effects of bank growth on occupational fraud risks in commercial banks in Kenya. International Journal of Social Sciences and Entrepreneurship ,1 (3), 469-480. ABSTRACT Globally statistics indicate that the banking industry has the highest occupational fraud incidence and that a typical organization looses at least 5% of its annual revenues to fraud. Applying this statistic to the Kenyan’s consolidated commercial banks revenue for the year 2011, the loss translates to approximately Kshs 13 Billion. Further statistics report that occupational fraud incidence is growing fastest in Africa as a continent and that Kenya has the highest fraud incidence in Africa. Commercial banks in Kenya have experienced a phenomenal growth in the last ten years. The study set to find if commercial banks growth has had an effect on occupational fraud in the commercial banks. 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; there is no relationship between bank growth and occupational fraud risk in commercial banks in Kenya. The findings from this study are the negative and not significant effect of bank growth on occupational fraud risk in commercial banks in Kenya. These results provide important insights on to management on the overall effect of customer base expansion and occupational fraud risk and further provide a pointer to the regulatory authorities as to what their efforts should be in deterring occupational frauds in Kenya. Key Words: Bank growth, Occupational Fraud Risk, Bivariate Regression Introduction Occupational fraud risk is a global problem and its frequency is highest in banks than any other industry globally (ACFE, 2010). Global fraud study report to the Nations, a publication of the Association of Certified Fraud Examiners (ACFE, 2010) on occupational fraud and abuse indicate that a typical organisation losses 5% of its annual revenue to Fraud. Applied to the consolidated Commercial Banks revenue for the year 2011, (CBK, 2011) the loss translates to