Effect of internal audit, internal control, and audit quality on fraud prevention: Evidence from the public sector in Indonesia

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Fraud prevention entails developing and implementing risk management strategies, particularly regarding fraud, and establishing internal controls and transparent corporate governance practices to eliminate fraudulent activities. This study aims to examine the effect of internal auditors, internal control, and audit quality on preventing fraud at the Inspectorate of North Sumatra Province, Indonesia. The sample included 61 government internal auditors of the Inspectorate of North Sumatra Province, Indonesia. The data collection process was carried out by administering questionnaires using Google Forms. Additionally, this investigation assessed the constructs under scrutiny using a five-point Likert and the partial least square (PLS) approach. The results showed that internal audit has a positive and significant effect on fraud prevention (p < 0.05), internal control has a positive and significant effect on fraud prevention (p < 0.05), and audit quality has no effect on fraud prevention at the Inspectorate of North Sumatra Province, Indonesia (p > 0.05). The Inspectorate of North Sumatra Province, Indonesia, should conduct internal audits, implement an internal control system, and pay attention to the quality of audits to make them more effective as a basis for quality decision-making and fraud minimization.

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    • Figure 1. Research model
    • Table 1. Factor loadings
    • Table 2. Average variance extracted
    • Table 3. Discriminant validity
    • Table 4. Composite reliability and Cronbach’s alpha
    • Table 5. R-square
    • Table 6. F-square
    • Table 7. Path coefficients
    • Conceptualization
      Henny Zurika Lubis, Maya Sari
    • Data curation
      Henny Zurika Lubis, Maya Sari, Andi Auliya Ramadhany, Debbi Chyntia Ovami, Istiqomah Rahmayati Brutu
    • Formal Analysis
      Henny Zurika Lubis, Maya Sari
    • Investigation
      Henny Zurika Lubis, Maya Sari, Istiqomah Rahmayati Brutu
    • Methodology
      Henny Zurika Lubis, Maya Sari, Andi Auliya Ramadhany
    • Project administration
      Henny Zurika Lubis, Andi Auliya Ramadhany, Debbi Chyntia Ovami, Istiqomah Rahmayati Brutu
    • Supervision
      Henny Zurika Lubis, Maya Sari, Andi Auliya Ramadhany
    • Visualization
      Henny Zurika Lubis, Andi Auliya Ramadhany, Istiqomah Rahmayati Brutu
    • Writing – original draft
      Henny Zurika Lubis, Andi Auliya Ramadhany, Istiqomah Rahmayati Brutu
    • Writing – review & editing
      Henny Zurika Lubis, Maya Sari, Debbi Chyntia Ovami, Istiqomah Rahmayati Brutu
    • Software
      Maya Sari, Debbi Chyntia Ovami
    • Validation
      Maya Sari, Debbi Chyntia Ovami
    • Resources
      Istiqomah Rahmayati Brutu