Title: The effectiveness of corporate governance mechanisms on fraud prevention and detection

Authors: Dheya A. Zaid; Faozi A. Almaqtari; Eissa A. Al-Homaidi; Waleed M. Alahdal

Addresses: Aligarh Muslim University, Aligarh, India ' Department of Accounting, Faculty of Business, Economics, and Social Development, University Malaysia Trengganu (UMT), Terengganu, Malaysia ' Faculty of Businesses, Al-Rowad University, Taiz, Yemen ' Department of Accounting, Faculty of Business, Economics and Social Development, Universiti Malaysia Terengganu, Malaysia

Abstract: This study investigates the impact of corporate governance on fraud prevention and detection of some selected companies in India. Seven bankrupt companies against 20 healthy companies were selected for this study over a period of five years. Descriptive statistics, independent sample t-test, and logistic regression were used to analyse the data of the present study. The results of the study reveal that there is a significant difference between bankrupt companies and health companies. Bankrupt companies had low board and audit committee effectiveness as compared to healthy companies. It is suggested that companies should comply with clause 49 of the listing agreement. The findings of study have high implications for policymakers, shareholders, and academicians. This study tries to fill a serious gap in prior studies of corporate governance. A practical contribution of this study is its emphasis on the role of corporate governance practices in fraud detection and prevention.

Keywords: board of directors; audit committee; fraud; bankrupt and healthy companies; India.

DOI: 10.1504/IJBEX.2023.134827

International Journal of Business Excellence, 2023 Vol.31 No.3, pp.412 - 427

Received: 24 Jul 2020
Accepted: 23 Nov 2020
Published online: 14 Nov 2023 *

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