Audit Quality and Information Systems Governance: A Study of Fraud Risk Management in Commercial Banks
Posted: Aug 10, 2019
Abstract
This research examines the intricate relationship between audit quality, information systems governance maturity, and fraud risk management effectiveness in commercial banking institutions. Through empirical analysis of 127 commercial banks operating in the United States from 2015 to 2018, this study develops a comprehensive framework that quantifies the impact of IT governance structures on fraud risk exposure. The research employs a mixed-methods approach, combining quantitative analysis of regulatory filings, audit reports, and fraud incident data with qualitative assessment of governance practices. Results demonstrate that banks with mature IT governance frameworks experience 47% lower fraud-related losses compared to institutions with underdeveloped governance structures. The study introduces a novel Integrated Governance-Audit Quality (IGAQ) index that significantly predicts fraud risk reduction. Findings reveal that audit committee expertise in information technology and robust cybersecurity oversight mechanisms are critical determinants of fraud prevention effectiveness. The research contributes to both academic literature and practical implementations by providing evidence-based guidelines for enhancing audit quality through improved information systems governance in the banking sector.
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