The Role of Internal Control Systems and Good Corporate Governance in Fraud Prevention Efforts: A Literature Review

Rahmah Yulianti; Maryam; Cut Hamdiah; Mahdi; Khairuna

doi:10.56225/finbe.v3i1.325

Authors

Rahmah Yulianti Department of Accounting, Faculty of Economics, Universitas Serambi Mekkah, Lueng Bata, 23245 Kota Banda Aceh, Aceh, Indonesia
Maryam Department of Accounting, Faculty of Economics, Universitas Serambi Mekkah, Lueng Bata, 23245 Kota Banda Aceh, Aceh, Indonesia
Cut Hamdiah Department of Accounting, Faculty of Economics, Universitas Serambi Mekkah, Lueng Bata, 23245 Kota Banda Aceh, Aceh, Indonesia
Mahdi Department of Accounting, Faculty of Economics, Universitas Serambi Mekkah, Lueng Bata, 23245 Kota Banda Aceh, Aceh, Indonesia
Khairuna Department of Accounting, Faculty of Economics, Universitas Serambi Mekkah, Lueng Bata, 23245 Kota Banda Aceh, Aceh, Indonesia

DOI:

https://doi.org/10.56225/finbe.v3i1.325

Keywords:

Internal Control System, Good Corporate Governance, Fraud, A Literature Review

Abstract

The act of fraud is an unethical act, it has a negative impact not only on individuals, organization and environment. This study analyses the role of internal control systems and good corporate governance in fraud prevention efforts. There are three main factors called the fraud triangle that motivate someone to commit fraud. Internal audit functions to assist management in detecting and preventing fraud that occurs in an organization in implementing good corporate governance. This is due to the absence of a good corporate governance mechanism. The role of internal auditors in detection and prevention efforts has a fairly strong role. And the role of internal auditors also has a very important role in good corporate governance. Literature studies from previous research and other related sources such as books, articles, and news are the methods used in this research. The method used in this research is literature review. The research conducted shows the results that a planned and structured internal control system can detect fraud. In addition, good corporate governance that is implemented by instilling good values will form a healthy company and avoid fraud. The internal control system has an important role in fraud prevention because with a system that is measurable and in accordance with the needs of the company, it will be easy to detect and prevent fraud. Easily detect and prevent fraud. GCG implementation can prevent fraud by implementing the GCG principles. An evaluation of the internal control system and GCG that is implemented needs to be done to increase the reliability of the system. This research is limited to the concepts of internal control system, good corporate governance, fraud, and articles on this topic.

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