The Impact of Audit Committee Effectiveness on Fraud Prevention in Public Sector Entities: The Mediating Role of Risk Management Implementation

Fraud in public sector entities remains a critical challenge that undermines transparency, accountability, and public trust. This study examines the impact of audit committee effectiveness on fraud prevention, with risk management implementation serving as a mediating variable. Drawing upon agency theory and enterprise risk management perspectives, the research proposes that effective audit committees enhance fraud prevention both directly and indirectly through strengthened risk management practices. A quantitative research design was employed using survey data collected from public sector officials involved in audit and governance functions. The data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results indicate that audit committee effectiveness has a significant positive effect on fraud prevention and significantly influences risk management implementation. Furthermore, risk management implementation positively affects fraud prevention and partially mediates the relationship between audit committee effectiveness and fraud prevention. These findings highlight the importance of integrating governance oversight with structured risk management systems to reduce fraud risk in public institutions. The study contributes to the literature by providing empirical evidence of the mediating mechanism linking audit committee effectiveness and fraud prevention in the public sector. Practically, the results suggest that policymakers should strengthen audit committee capacity and institutionalize enterprise risk management frameworks to enhance accountability and minimize fraud occurrence.