THE EFFECT OF INTERNAL CONTROL, INTERNAL AUDIT EFFECTIVENESS, AND RBIA ON FRAUD PREVENTION IN CONVENTIONAL BANKS LISTED ON THE IDX

Abstract

Fraud remains a major concern in the banking industry due to its potential to cause financial losses and undermine public trust. Therefore, effective governance mechanisms are required to strengthen fraud prevention. This study aims to examine the effect of internal control, internal audit effectiveness, and risk-based internal auditing on fraud prevention in conventional banks listed on the IDX during the 2020-2024 period. This study employs a quantitative approach using secondary data obtained from annual reports and applies purposive sampling to select the research sample. Data are analyzed using multiple linear regression analysis. The t-test results showed that internal audit effectiveness and RBIA had no significant effect on fraud prevention, whereas internal control had a significant effect on fraud prevention. A determination coefficient value (R2) of 11.6% indicates that fraud prevention can be explained by the independent variables. These findings emphasize the importance of integrated governance and monitoring mechanisms in strengthening organizational integrity and mitigating fraud risk in the banking sector.