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

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.

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