Abstract
Fraud constitutes a significant challenge within the small business sector, often stemming from personal, group, or organizational incentives. Recent economic instability has likely exacerbated the occurrence of fraud among businesses. This study investigates the prevalence of fraud within the private sector of Mogadishu, Somalia, with the aim of identifying key risk factors and exploring potential mitigation strategies. The primary data was collected from 93 respondents using a questionnaire and analyzed using SPSS software. The majority of respondents, 75% men, aged 31-40, and educated, agreed that fraud is unethical and can damage an organization's reputation, with 67.8% expressing it as a major concern, while 93.3% agreeing it's unethical. Additionally, 88.8% believed fraud severely harms an organization's reputation. Further, factors contributing to fraud include personal and institutional pressures, improper management, unsuitable documentation, unclear responsibilities, and abuse of power. Fraud significantly impacts SMEs, affecting profitability, growth, and business credibility, emphasizing the need for improved accountability. The study recommends robust anti-fraud legislation, clear penalties, whistleblower protection, improved governance, and a regulatory body. It also emphasizes public awareness campaigns, internal controls, and improved management practices. Technology can help identify suspicious patterns and secure communication channels to protect sensitive information while fostering a culture of integrity and ethical behavior.