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Power of Forensic Accounting Practices in the Detection of Frauds in Sri Lanka: The Moderating Role of Internal Control System
Journal of Business and Technology 10(1): 153–171 · 2026
https://doi.org/10.4038/jbt.v10i1.189
Abstract
There is a propensity of growing financial frauds and to uncover such frauds, the attention grown towards the forensic accounting concepts. Thus, this study examines the impact of forensic accounting practices on fraud detection in Sri Lanka with the moderating effect of the internal control system. Investigative and litigation practices were analyzed as independent variables, with fraud detection as the dependent variable and the internal control system as the moderator. The study utilized quantitative method, gathering data from 384 auditors through an online survey using simple random sampling technique. Hypotheses were evaluated using structural equation modeling (SEM) with partial least squares (PLS). Key findings indicate that investigative and litigation practices significantly impact fraud detection. Further, the internal control system moderates these relationships, enhancing fraud detection outcomes. This study underscores the relevance of forensic accounting in protecting organizational assets, stakeholder interests, and reputation. Moreover, this study expands the theoretical knowledge regarding investigative and litigation practices along with their importance. It further calls for government measures to train undergraduates and professionals in forensic accounting to elevate its practical application and effectiveness.
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