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Risk management, top management support, internal audit activities and fraud mitigation

Waled Younes E. Alazzabi (Department of Accounting, University Putra Malaysia, Serdang, Malaysia)
Hasri Mustafa (Department of Accounting, University Putra Malaysia, Serdang, Malaysia)
Ahmed Ibrahim Karage (Department of Strategic Management, Putra Business School, Serdang, Malaysia)

Journal of Financial Crime

ISSN: 1359-0790

Article publication date: 24 January 2020

Issue publication date: 2 February 2023

2262

Abstract

Purpose

This paper aims to examine the effect of top management support (TMS) and risk management (RM) on the internal audit activities (IAA) and fraud mitigation (FM) in the Libyan banking sector.

Design/methodology/approach

The data is collected using a survey questionnaire of 16 commercial banks in Libya and analysed using a structural equation modeling.

Findings

The study shows positive and significant relationships between RM and employees’ FM and TMS and employees’ FM. The study also demonstrates a significant mediating effect on the relationship between RM, TMS and FM.

Research limitations/implications

The study is conducted in the Libyan banking sector. Further research is needed in other contexts and sectors to understand the contribution of the RM and TMS on FM, including the impact of technology and internal audit characteristics in terms of experience, education and professional certificates on FM.

Originality/value

The study is the first attempt to explore FM in an emerging economy, particularly Libya, by introducing IAA as a mediator. The study provides implications for regulators and top management in the banking sector.

Keywords

Acknowledgements

An earlier version of this paper was presented as a sundry paper at the National Seminar on Digitalisation, Sustainability and Globalisation (10th Faculty of Economics and Management Seminar, UPM) on 16 July 2019 at Universiti Putra Malaysia. The authors thank the conference reviewer for suggesting improvements. Any errors nevertheless remain the authors’ own responsibility.

Citation

Alazzabi, W.Y.E., Mustafa, H. and Karage, A.I. (2023), "Risk management, top management support, internal audit activities and fraud mitigation", Journal of Financial Crime, Vol. 30 No. 2, pp. 569-582. https://doi.org/10.1108/JFC-11-2019-0147

Publisher

:

Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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