The interplay of sociocultural determinants and internal audit activities in mitigating public sector fraud

Purpose – This study examines the effect of sociocultural factors (subjective norms, internalization, cultural tightness-looseness) on fraud mitigation (FRM). The study further ascertains the mediating role of internal audit activities (IAA) in the relationship between the sociocultural factors and FRM. Design/methodology/approach – The survey research method was employed, using questionnaires as the main data collection tool. To test the study’s hypotheses, 552 valid responses were obtained from the internal audit units of state-owned entities in Ghana. The partial least squares structural equation modelling technique was used for the inferential analysis. Findings – The results suggest that subjective norms, internalization and cultural tightness-looseness are relevant predictors of IAAs. The results also indicate that the tighter the organisational culture and content of induced behaviour of internal audit units, the greater the likelihood for organizations to perform activities that enhance fraud mitigation. Research limitations/implications – The study revealed that the internal auditors’ personal biases might have influenced the socio-cultural orientation of the internal audit units. As a result, future cross-sectional studies are needed to investigate the impact of cultural and social dimensions on fraud mitigation and the implementation of IAAs in the private sector. Originality/value – The findings provide empirical evidence highlighting the role of socio-cultural factors in promoting good corporate governance within the Ghanaian public sector environment. The results therefore offer some useful insights into the fraud and fraud mitigation discourse from the public sector perspective. To the best of the authors’ knowledge, this is one of the few papers that investigates the individual contribution of sociocultural issues and internal audit activities to fraud mitigation.