Abstract:
This study explores the role of corporate governance in mitigating financial fraud by examining
its key mechanisms, such as board size, internal audit committees, performance pressure, and
opportunities for fraud. The research adopts a comparative case study approach, analysing five
companies with documented fraud cases against their competitors with no fraud history.
Secondary data sources, including annual reports and fraud investigation documents,
utilized for quantitative and qualitative analysis.
were
The findings reveal that larger boards and independent audit committees significantly reduce
the risk of fraud by enhancing oversight and accountability. Conversely, excessive performance
pressure on management fosters unethical practices, while opportunities for fraud persist
with the presence of reputable external auditors, underscoring the need for robust internal
controls. Regression analysis indicates that 62.4% of fraud occurrences can be explained by
the studied governance variables, with statistically significant relationships affirming their
collective impact.
even
The study emphasizes the need for diverse and functional boards, resilient audit mechanisms,
and a focus on long-term sustainability over short-term gains. It highlights the limitations of
relying solely on external auditors and advocates for integrating internal and external audit
functions. By addressing governance gaps, organizations can strengthen their resilience to
fraud, foster transparency, and maintain stakeholder trust. Recommendations for policymakers
and corporate leaders include adopting ethical governance frameworks and prioritizing
sustainable business practices to mitigate fraud risks
