Organizational Corruption Prevention, Internal Audit, and Sustainable Corporate Governance: Evidence from Omani Public Listed Companies

Ali Rehman

Abstract

Purpose of the study: The purpose of this study is to analyze the impact of fraud risk assessment (FRA) and internal audit activity (IA) on sustainable corporate governance within Omani publicly listed companies in the context of the Fraud triangle, Institutional theory, and Agency theory. This study also explores whether or not IA plays a mediation role between FRA and SCG. For this study, FRA and IA is the independent variable, and SCG is the dependent variable. IA in this study is also presented as a mediator variable. FRA is the internal control necessary to mitigate fraud risk, IA is the control activity available within the organization, and SCG is the governance mechanism for the organization.


Methodology: Descriptive cross-sectional survey design is utilized. The web-based application collects data, and Partial Least Square – Structural Equation Modelling tool (PLS-SEM) is applied for data analysis.


Main Findings: The result implies that IA has a significant direct relationship with SCG and mediates the relationship between FRA and SCG; however, FRA does not have a significant relationship with SCG.


Research limitations/ implications: This study is conducted in the Omani market and only for publicly listed companies. Future research can be extended to other Gulf countries and utilise private companies' data. This study is helpful for the regulators and policymakers who can amend the codes and policies and develop related frameworks.


Novelty/ Originality of this study: To the best of the researcher's knowledge, only a few studies have been conducted that link the FRA to IA and SCG. This research contributes to the existing body of knowledge. It can be used to amend corporate governance codes and organisational governance policies by introducing SCG clauses/regulations and requiring FRA in governance management policies.

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References

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Authors

Ali Rehman
ccp9147@yahoo.com (Primary Contact)
Author Biography

Ali Rehman, Internal Audit Department, A’Sharqiyah University, Ibra, Oman

Ali Rehman, Ph.D. is the Director of Internal Audit at A'Sharqiyah University. His research interests include internal audit, fraud, corporate governance, sustainable corporate governance, and environmental, social, and governance issues. He holds a PhD in Risk and Corporate Governance from Universiti Sains Malaysia. He also holds the FCMA, CGMA, CIA, and CRMA certifications.
Rehman, A. (2022). Organizational Corruption Prevention, Internal Audit, and Sustainable Corporate Governance: Evidence from Omani Public Listed Companies. International Journal of Social Sciences and Economic Review, 4(2), 10–22. https://doi.org/10.36923/ijsser.v4i2.159

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