THE IMPACT OF INTERNAL AUDIT, INTERNAL CONTROL, AND CORPORATE GOVERNANCE ON FRAUD PREVENTION IN PRIVATE CONVENTIONAL BANKS ON THE INDONESIAN STOCK EXCHANGE

Abstract

The high number of fraud cases in the banking sector shows the need for an effective supervision and governance system. This study aims to evaluate the influence of internal audit, internal control, and corporate governance in an effort to prevent fraud in conventional private banks listed on the Indonesia Stock Exchange during the period 2020 to 2024. This research uses quantitative methods and secondary data in the form of company’s annual reports. The sample consisted of 40 companies selected using purposive sampling techniques. The type of analysis used is multiple linear regression. The research result indicate that internal audits exert a positive and significant impact on fraud prevention. On the other hand, internal control and corporate governance do not show a significant influence. Simultaneously, these three variables have a significant impact on fraud prevention. A determination coefficient value (R²) of 0.263 showed that 26.3% of fraud prevention variations were explained by these three variables, while the rest were influenced by other factors outside the model. This study recommends that the banking sector strengthen the internal audit function as a key step in fraud prevention, as well as improve the company's control and governance system more effectively.