The purpose of this study was to establish whether red flags matter in fraud detection by assessing their perceived influence on fraud detection in Savings and Credit Cooperative Societies (SACCOS) in Tanzania. This study employed a mixed-methods approach where quantitative data was collected from 210 SACCOS, and qualitative data was collected from 9 Key Informants. Data analysis was carried out using Partial Least Square – Structural Equation Modeling (PLS-SEM) and content analysis respectively. Findings indicate that both behavioral red flags (β = 0.606, p < 0.001) and operational red flags (β = 0.339, p < 0.001) had a significant influence on fraud detection in SACCOS. The two constructs contribute about 56% to fraud detection in SACCOS. The study concludes that red flags matter significantly in fraud detection in SACCOS, and can help as an early fraud detection mechanism. It is recommended that SACCOS Board members, managers, staff and members should be trained on how to identify and report fraud red flags to the relevant authorities.
Keywords: Fraud Detection, SACCOS, Tanzania, red flags
