Examining the Role of Accountant’s Knowledge of Forensic Accounting, Corporate Governance Policies and Fraud Awareness Training in Preventing Fraud: A Survey of Indian Corporates

Abstract

Corporate fraud remains a persistent problem that highlights the need for improved internal control and governance. Research on corporate governance (CG) and forensic accounting (FA) has been largely performed as separate studies. Little has been done to look at how accountants’ knowledge and the specific training of accountants in fraud awareness for their company’s leaders affect preventing fraud (FP). The study surveyed 150 accountants in India from April 2023 to May 2024. The results are based on Chi-Square testing and binary logistic regression. The study investigated how companies in India incorporate CG policy understanding and FG use for KMP and boards and how these factors affect FP. The findings indicate that understanding CG, using FA, and having specific training on fraud awareness for KMPs and boards of directors are all significant factors in reducing the occurrence of fraud. In addition, general employee training has no impact on FP. The theories of agency, stakeholder, and fraud triangle were combined to create one model to provide guidance to both organizations and regulators on how to institutionalize FG and to improve transparency in governance.

1. Introduction

With the COVID-19 epidemic and an increasingly complicated fraud environment, it is more crucial than ever for organizations to establish effective fraud prevention programs. In 2025, the ‘Reserve Bank of India’ (RBI) reported a sharp increase in bank frauds, with the total amount involved rising to INR 36,014 crore, nearly three times the previous year, highlighting escalating financial misconduct (Indian Express, May 2025). Corporate cases such as a INR 235 crore multi-state investment fraud in Surat further reveal the vulnerabilities in corporate oversight and internal controls (Times of India, July 2025). To deal with such frauds effectively, corporate governance (CG) is one way to achieve this goal. CG pertains to the framework of relationships, policies, procedures, and regulations that govern the use and management of authority within an organization. The primary stakeholders in CG include the “audit committee, internal auditors, board of directors (BoD)”, and those responsible for “fraud risk assessment” (Novatiani et al., 2024; Macey, 2008; Nkansa, 2024; Popoola et al., 2014). Strong internal controls and a management culture that encourages open dialog among employees can assist the detection, reporting, and restriction of fraud, though it might not fully prevent every case of fraud in the organization (Musah et al., 2022).

Significant developments in this area include the UK’s 1992 Cadbury committee report and the “Sarbanes-Oxley (SOX) Act, 2002”, both of which have influenced CG regulations globally (Bhasin, 2016a; ICSI-Forensic Audit, 2020). India has seen a number of these CG improvements, in line with international trends. One such modification is the “Security Exchange Board of India (SEBI)”, which is a top governing body for the Indian stock markets, which include “Bombay Stock Exchange (BSE)” and the “National Stock Exchange (NSE)”; introducing “clause 49 of the listing agreement” is applicable for both exchanges. In 2014, this clause was aligned with the “Companies Act, 2013”. Notable modifications have resulted in increased disclosure requirements, stronger audit committees, and independent directors serving boards, among other things. Despite the introduction of CG regulations and further Indian disclosure guidelines, the degree of compliance by Indian corporations remains dubious due to their inadequate execution.

The function of forensic accounting in a corporation can be seen from two views: anti-fraud detective view and prevention view (Das, 2020). Sample studies show that when a corporation creates good corporate governance structures, there are fewer opportunities for both management and external parties to commit corporate fraudulent financial reporting and money laundering; this is achieved by having more effective oversight, greater transparency and increased accountability at all levels. A number of other studies demonstrate that effective governance structures also enhance the capability for risk assessments and internal audit functions and are characteristics of governance, such as the independence and expertise of board members. Emerging research indicates that governance characteristics and ethical cultures also play a major role in how organizations respond to, detect and prevent corporate fraudulent behavior. This demonstrates that governance structures are major determinants of the integrity of an organization and trust of stakeholders, regardless of what region the corporation is located in (Alfordy, 2022). Research has demonstrated the critical role that strong corporate governance structures, forensic accounting practices, and fraud prevention awareness programs play in preventing corporate fraud. Studies by Rehman and Hashim (2018a) and Sanusi et al. (2015) demonstrate that incorporating forensic accounting mechanisms into governance structures results in improved transparency and accountability, resulting in reduced fraud risk. Additionally, studies by Rohmatin et al. (2021) and Wahiza Abdul Latif et al. (2021) demonstrate that effective governance frameworks (combined with good ethical leaders, along with enhanced fraud awareness training) result in reduced key fraud triangle elements (Cai et al., 2024). Other studies by Sanjay (2024) and Wadhwani and Menon (2017) indicate that ongoing professional education and an organization’s commitment to board-level governance reforms enhances organizational integrity; thus, the studies cited above collectively conclude that a holistic approach to governance oversight, forensic accounting expertise, and structured fraud awareness/NED training programs serves as a foundation for sustainable prevention of corporate fraud (Sravani & Krishnaveni, 2019). As can be seen, during the globalization of corporate fraud, developed countries have had the opportunity to research this area extensively, while this area is still being explored by researchers in emerging economies such as India. Research conducted by Goel (2018) and Musah et al. (2022) illustrate the importance of corporate governance structure in enhancing an organization’s transparency and accountability. Goel (2018) stated that strong governance practices promote independent oversight; therefore, good corporate governance structures may improve a company’s financial reporting integrity and stakeholder trust. Musah et al. (2022) demonstrated that strong corporate governance and strong internal controls will have a positive impact on a company’s profitability and managerial accountability. Both of the studies above demonstrated that effective governance structures will minimally reduce corporate fraud and increase the performance of the organization. Although the above research highlights the importance of having strong corporate governance structures, implementing forensic accounting practices and developing fraud awareness training for employees was shown to significantly decrease corporate fraud; however, a gap exists in the research literature regarding the combined and synergistic effects on corporate fraud mitigation through a comprehensive research framework. Most of the previous studies focused on one aspect of the process of mitigating corporate fraud; however, research is lacking as to how these processes, when combined with each other, reduce the occurrence of fraud in organizations. Multiple studies have examined the relationship of corporate governance with financial performance and profitability; however, limited empirical studies exist on the emerging markets, such as India, where the differences in regulatory enforcement, the business culture, and awareness of professionals can possibly affect the relationship with corporate governance and financial performance. Therefore, there is a need for further research on how the knowledge of an accountant’s understanding of corporate governance policies, communication, reporting procedures, and practices affects the fraud prevention process. Therefore, there is a need for future research in developing an empirical research model that integrates the awareness of corporate governance, adoption of forensic accounting practices, and leadership-level fraud training to measure changes in the occurrence of corporate fraud (Sravani & Krishnaveni, 2019). Awareness of CG policies is crucial as it enhances professional competence and ethical standards. It equips accountants to assist in fraud detection, risk mitigation, and governance evaluation. It also encourages honest, accountable, and transparent financial reporting.

The goal of this research is to evaluate how fraud awareness training (FAT), forensic accounting services (FAS), and accountants’ knowledge about CG policies relate to the prevention of corporate fraud in India. By integrating agency theory, fraud triangle theory and stakeholder theory, this study provides a comprehensive theoretical foundation for understanding how accountants’ training impacts their ability to enforce corporate governance policies and prevent fraud through forensic accounting.

2. Problem Statement and Need for the Study

After extensive research on CG failure, different scams took place in India because of weak CG, which is the effect of weak internal controls and ignorance of the services offered by the FA domain. After the eye-opening Satyam scam broke in 2009, it was found that there were numerous flaws in the current CG system (Bhasin, 2016b). After the eye-opening Satyam scam, there were a series of amendments in the CG code.

Figure 1 shows the journey or progress of the corporate government code in India, as shown in following reference (S. Joshi & Kansil, 2023). The journey of CG code in India starts in 1998, in line with the UK’s CG code of conduct, which has continued till today. There was major development in the year 2000; ‘clause 49’ was introduced by ‘security exchange board of India’ (SEBI), which was replaced by ‘listed obligation and disclosure requirement’ (LODR) in 2015, and further amended in 2018. In 2020, SEBI started ‘business responsibility reporting’ (BRR) for top 1000 listed companies. In 2022, it was further amended, and ‘sustainability reporting’ was added.

Despite these regulatory advancements, concerns regarding corporate fraud persist. According to Deloitte India’s Corporate Fraud Perception Survey IV, published in 2020, approximately 80.3% of the respondents believed that fraud incidents would continue to rise, even with mandatory governance provisions. Key institutions involved in CG include auditing firms, which assess financial integrity, and “credit rating agencies” that evaluate corporate credibility.

To strengthen the corporate governance (CG) within the United States, policymakers are requiring greater quality while approving boards of directors. The Enron corporation scandal in the United States was the catalyst for new regulations that included the Sarbanes–Oxley Act of 2002 and the introduction of new standards of governance by the ‘New York Stock Exchange’ and the ‘National Association of Securities Dealers’ (Macey, 2008). In same way, the ‘Satyam Computers’ scandal in India highlighted a series of failures within CG, and as a result, the new Companies Act 2013 was enacted. The Companies Act included many CG requirements, including the establishment of an audit committee, a remuneration committee, and a nominating committee, along with a significant increase in the number of independent directors. To evaluate the effectiveness of the existing CG framework, it is important to assess the knowledge of corporate accountants related to financial accounting (FA), CG, and their understanding of the requirements of these regulatory frameworks (Bhasin, 2016a; Jain & Lamba, 2020; Lohana, 2013; Owojori & Asaolu, 2009; Prakash, 2013; Rehman & Hashim, 2018b).

Research Question

How does the level of awareness regarding corporate governance policies, board composition and training efforts among accounting and finance professionals contribute to an organization’s fraud prevention efforts?

3. Literature Review

3.1. Fraud Typologies and the Corporate Governance

The essence of fraud can generally be defined by four major characteristics: presenting false information, having knowledge that one is committing an unlawful act, the presentation must have been believable, and this false information will cause financial loss to an individual or business (ICSI-Forensic Audit, 2020). Within the scope of the accounting/auditing profession, these characteristics generally fall into two broad categories: employee-level misconduct and high-level management behaviors (Vakrani, 2023). Employee fraud will typically be motivated by individual behavior that has been introduced into the workplace through inappropriate spending due to a lack of internal controls. Management fraud will generally include intentional misstatements of financial reports for the purpose of misleading outside stakeholders. Both types of cheating, as well as asset misappropriation (such as invoice fraud and/or false reimbursement requests) demonstrate the need to have a multi-layered detection and prevention framework in place (ICSI-Forensic Audit, 2020).

Figure 2 depicts auditors as an important aspect of the ‘Corporate Reporting Supply Chain’ (CRSC), based on the access they provide to usable data by the public (Sanjay, 2024). However, auditors do not work in isolation; board members are the primary authority in the governance of a corporation, and auditors work with board members to help maintain transparency, accountability, and proper oversight of corporations.

In clarification of the myth that the auditors are the main deterrent of dishonest behavior, they are in fact more of the second line of defense than the first line of defense. The core first line of defense is the corporate governance (CG) structure, including risk management and control over managerial risk by the board of directors. Therefore, even though auditors and regulatory agencies have crucial roles to play in protecting the interests of investors, ultimately, it is the board’s responsibility for preventing fraud through its culture of integrity and oversight (Macey, 2008). Fraud can consist of four basic components: misrepresentation, knowledge of the wrong, reliability, and damage caused by fraud, all of which result in financial loss (Mangala & Kumari, 2015). Fraud can be committed in numerous ways, across many areas of an organization, and must be thoroughly investigated and understood to detect and prevent fraud (ICSI-Forensic Audit, 2020). Auditors primarily review financial statements prior to publication to ensure that they are accurate, whereas forensic audit (FA) practitioners are responsible for preventing, detecting, and investigating fraud (Gray, 2008). Auditors develop and implement procedures that specifically search for discrepancies and irregularities in financial data; however, forensic audit practitioners take a broader, investigative approach to the audit process and require specific forensic skills as well as a mindset for investigation (Gupta, 2020). They also perform a broader range of responsibilities than just the analysis of financial statements, including collecting evidence, interviewing potential witnesses, and identifying the root causes of fraud. Forensic audit findings are often used in court and by various regulatory bodies, including the securities and exchange board of India (SEBI) and the serious fraud investigation office (SFIO) (A. Joshi, n.d.-a, n.d.-b; Bhasin, 2013a, 2016b; Jain & Lamba, 2020; Owojori & Asaolu, 2009). According to the securities and exchange commission (SEC) and SEBI, a significant percentage of the most complex acts of corporate fraud is perpetrated by top management.

Managing superior internal controls and outcomes is the responsibility of the organization’s upper management. As previously mentioned, executives have considerable authority over financial reporting, which allows them to manipulate their organizations’ financial records through improper journal entries. Thus, while the expectations for auditors include detecting fraudulent activity, they generally cannot prevent it from occurring since their procedures typically include random-sampling techniques that are not complete or exhaustive. Corporate fraud typically takes on new and creative characteristics through the education and intelligence of both professionals, i.e., white-collar criminals and others. The evolving nature of learning and analysis will continuously challenge auditors and forensic teams (detective, forensic analysis techniques). Alshdaifat et al. (2024) studied the effect of audit committee effectiveness on the disclosure of key audit matters. A major finding of their study indicated that audit committee effectiveness was inversely impacted by key audit matter disclosure. This research indicated that improving audit committee effectiveness will improve stakeholder and corporate governance. Unfortunately, fraud schemes continuously emerge as a result of the innovation of well-educated individuals and white-collar criminals. The schemes will grow until identified and prosecuted.

3.2. The Need for Strengthened Corporate Governance (CG)

A key factor in perpetrating financial crime is Let’s Go’s (L G) insufficient internal control corporate governance (CG) structures; hence, an audit methodology, including forensic auditing, retrospective auditing, and elevated auditor skepticism (Sanjay, 2024), needs to be developed in order to create a more robust CG. By improving the integrity of financial reports and reducing the likelihood of fraud, this method can also result in strengthening CG (Bello, 2011). Due to the lack of effective governance, the failure of many accounting firms is rooted in how they implemented ineffective internal controls and inadequately executed CG policies (Bhasin, 2013b). Historical cases of financial scandals in India involving Satyam computers, Harshad Mehta, Ketan Parekh, and Abdul Karim Telgi, are a direct result of this trend and have thus driven the demand for forensic accountants. The three issues that arose in the companies involved the need for executive management to override controls, the alleged pessimism of senior management, and a lack of dedication by some employees to internal control procedures. However, these issues were minimized as a consequence of the progressive employee training (Rubasundram, 2015). With India’s rapidly growing economy, the benefits of corporate governance (CG) structures for corporate India, the banking and insurance sector, and other organizations and interest groups are now being highlighted (Bhasin, 2016a). Strengthening CG practices across companies is an effective strategy for combating fraud and preserving stakeholder value (Bhasin, 2016b). Review of the existing literature has identified that the companies that have a substantial change in direction will be most vulnerable to financial fraud, and that increasing institutional ownership and implementing stricter CG policies will help mitigate these risks (Pamungkas et al., 2018). In addition, organizations should have trained employees to comply with internal guidelines, provided ongoing training and incorporated the results of forensic accounting into their overall governance (Abouelghit & Gan, 2024; Wangombe, 2017). Notably, researchers continue to advocate for additional research into both internal and external factors impacting fraud prevention systems and the quality of internal controls (Adejumo, 2019; Hafizah et al., 2019). Broad estimates for the next decade seem to confirm FA’s consistency in bridging the gap between perception and reality (Akinbowale et al., 2020; Galeotti et al., 2020). With proper FA methodologies, it is possible to cull the emerging fraud schemes—Yang and Lee (2020) identified four primary areas for future research: the value of FA education; the role FA plays in combating economic catastrophes; the significance of FA in the auditing profession; and the use of FA as a practical tool. Thus, while existing studies support the relevance of CG and FA in reducing the odds of fraudulent activities, there is still a substantial gap in knowledge as to how these two theories can effectively work together in real time within an evolving corporate culture.

3.3. Gaps in the Literature

• The geographic and empirical scarcity of formal research on the use of FA in India means that while global support for FA is increasing, implementation of FA is still considered to be outside the scope of Indian corporations.
• The absence of frameworks that connect the relationship between CG and FA application means that the existing literature does not provide an integrated model for connecting CG with FA awareness and adoption as a means to combat corporate fraud.
• To create an environment whereby corporations can systematically implement the use of FA into their internal monitoring systems and employee fraud awareness training programs as the first means to combat corporate fraud, it is necessary to conduct research on the operational integration of FA.
• Though the theory of governance and transparency is well-established, there is insufficient research providing measurable evidence linking awareness of CG to the adoption of FA and measurable reductions in corporate fraud through FA.

4. Theoretical Framework

Incorporating different perspectives of economics, psychology, and criminology provides a sound theoretical framework for assisting fraud prevention and awareness within the area of corporate governance (CG). Three theories in CG, agency theory, fraud triangle theory, and stakeholder theory, provide insight on understanding and mitigating corporate fraud.

The agency theory was developed by Jensen and Meckling (1976) and posits that the agency cost is created when ownership and management are separated. This agency cost acts as the problem addressed by agency theory. Within a corporate context, the board of directors (BoD) represents the agent, while shareholders represent the principal. When agents put their self-interests ahead of the principal’s interests, fraud often occurs. CG frameworks aim to align the interests of the two parties through prescribed processes and accountability.

The awareness of CG policies and the implementation of targeted training programs for the BoD and key managerial personnel (KMP) helps to mitigate alignment issues and thus avoid such alignment issues. Agency failure has been seen in extremely publicized scandals such as in 2001—Enron and in 2009—Satyam, when executive management falsified financial statements to provide a benefit to themselves (Abdullahi & Mansor, 2018; Bhasin, 2016b; Puspasari, 2015).

Fraud triangle theory is the model suggested by Donald Cressey in 1953. It identifies the three main elements that create an environment that facilitates a person committing fraud—pressure, opportunity and rationalization. This theory emphasizes the need for organizations to implement strong governance controls and oversight mechanisms to reduce the potential opportunities for fraud (Abdullahi & Mansor, 2015, 2018). Stakeholder theory, introduced by Edward Freeman in 1984, moves the emphasis away from maximizing shareholder value and toward considering the interests of all stakeholders involved in the business, including shareholders, suppliers, customers, employees, government regulators, and community members. Moreover, by promoting ethical leadership, transparency, and accountability, stakeholder trust increases, and therefore, the level of unethical behavior decreases. CG policies, such as whistle-blower protection and stakeholder feedback mechanisms, foster a culture of integrity and reduce the incidence of fraud (Park & Blenkinsopp, 2009; Xanthopoulou et al., 2024). These three theories, agency theory, fraud triangle theory and stakeholder theory, together provide a comprehensive framework for understanding the underlying causes of corporate fraud; creating effective governance reforms; and enhancing forensic audits, and stakeholder engagement practices to minimize corporate fraud.

5. Hypothesis Development

The research summarized here establishes that an independent, well-structured board is key to minimizing financial statement fraud and earnings manipulation due to enhanced oversight and accountability (Alexeyeva, 2024; Arsh et al., 2025; Pham & Vu, 2024). Empirical research also shows that such good governance structures increase corporate performance and reduce managerial agency costs created by their proclivity for self-interest (Rehman & Hashim, 2020; Wahiza Abdul Latif et al., 2021). Based on agency theory, fraud is often perpetrated by agents acting opportunistically for personal gain in contrast to the company objectives (Abdullahi & Mansor, 2018; Puspasari, 2015). Thus, improving CG awareness across the corporate level, especially in the case of accountants, will mitigate this agency issue. Additionally, from the agency theory perspective, stakeholder theory suggests that the accountability structure induced by CG will support dependency and ethical behavior; that is, employees lower in the hierarchy will identify and refrain from unethical behavior when adequately educated regarding their board organizational structure (e.g., tuned to CG policy) (Xanthopoulou et al., 2024). Increasing everyone’s awareness of whistle-blowing and fraud’s consequences can motivate lower-level employees, like accountants, to comply with the company’s ethical code of behavior. Finally, as described by the fraud triangle theory, increasing CG awareness of accountants will reduce the opportunity component of fraud. Therefore, based on previous research perspectives, the following hypothesized future research direction may be provided.

H1: 

Awareness among accountants about CG policies is positively associated with fraud prevention.

Forensic accountants possess a unique synthesis of accounting, auditing, and investigative expertise, enabling them to identify financial irregularities and provide admissible legal evidence (Al-Janadi et al., 2013; Bhasin, 2013a; Owojori & Asaolu, 2009). Beyond traditional auditing, their role encompasses asset tracing and complex financial statement analysis, which are critical for early detection and the mitigation of economic damage (Oyedokun, 2015; Saluja et al., 2019). From the perspective of agency theory, the inclusion of forensic accounting (FA) services serves as a robust monitoring mechanism that limits managerial opportunism and reduces information asymmetry between agents and principals. By institutionalizing these services, organizations can more effectively align managerial actions with shareholder interests. This is complemented by stakeholder theory, which suggests that the rigorous oversight provided by forensic experts fosters organizational integrity and protects the interests of all stakeholders.

H2: 

Inclusion of Services of forensic accountant is positively associated with fraud prevention.

Per agency theory, people in positions of trust are typically top executives of an organization; however, they are afforded considerable power over the preparation of financial reports to their finance department and the organization’s internal control system. For this reason, top executives have the potential to manipulate financial reporting on behalf of himself/herself and/or the organization’s benefit (Musah et al., 2022). The role of top executives is one of responsibility and opportunity for achieving fraudulent financial reporting; however, there is a link between top executives’ proximity to financial decision-making and the possibility of their opportunistic behaviors. Historically, most major instances of financial statement fraud occur as a result of unapproved or manipulated accounting entries; this leads to the understanding that there is a lack of oversight and governance deficiencies in organizations (Bhasin, 2016b; Kamardin & Haron, 2011; Yang & Lee, 2020). Cressey (1953) states that financial fraud occurs within the framework of each of the elements of the fraud triangle, opportunity, pressure, and rationalization. This can assist in understanding how an organization’s internal cardholders can reduce the opportunity element of the fraud triangle, therefore reducing the overall fraud risk of organization, through fraud awareness training (FAT) targeted towards board members and key managerial personnel (KMP) (Popoola et al., 2014). Additionally, stakeholder theory states that an organization is fiduciary to its stakeholders; therefore, an organization has a fiduciary responsibility to act transparently and ethically in the best interest of its stakeholders. When leadership is trained and made aware of what constitutes fraud and understands the risk involved, leadership improves stakeholder confidence and the organization’s institutional accountability, creating an organization’s fiduciary responsibility to its stakeholders. Therefore, based on the agency, stakeholders, and the fraud triangle, the following hypothesis is proposed.

H3: 

Fraud awareness training for board members and key managerial personnel (KMP) is positively associated with fraud prevention.

The agency theory suggests that there is a possibility for opportunistic behavior by management and employees (agents) in contradiction to the goals of the organization, especially in cases where monitoring and control systems are inadequate. Agent training on fraud detection and mitigation can enhance their ability to identify fraud risk and will consequently facilitate their ability to act in the best interests of the organization (Bhasin, 2017; Saluja et al., 2019; Popoola et al., 2014). According to Singleton and Singleton, systematic fraud auditing along with the professional training of employees can significantly improve the ability of employees to detect fraudulent activities and also enhance the organization’s ability to withstand fraud. According to the fraud triangle theory, if the opportunity and rationale factors for fraud can be mitigated/reduced, enhancing the awareness and the development of forensic skills will help reduce the opportunities and rationalizations for fraud. Providing accounting professionals with training on how to identify forensic indicators will enable them to detect abnormal financial information sooner and help them understand and thereby avoid committing unethical behavior. From a stakeholder theory perspective, building capacity in the identified areas of fraud detection demonstrates the organization’s commitment to being accountable to stakeholders through ethical practices and transparency (Aashima et al., 2023; Pourhabibi et al., 2020). Despite this theoretical foundation, there are only limited practical examples of effective forensic red-flag training provided to employees in Indian organizations. Therefore, the following hypothesis is proposed.

H4: 

Timely training on forensic red flags to accountants is positively associated with fraud prevention.

The conceptual framework is based on the four interrelated concepts of agency: theory, stakeholder theory, and fraud triangle theory, as interconnected components of an organization’s collective capacity for early detection or prevention of corporate fraud. These four concepts are strategically aligned with the four hypotheses: H1 through H4, and each of the four hypotheses represents an integral component of a comprehensive framework for mitigating fraud risk.

• H1—The accountant’s awareness of corporate governance (CG) policies and code of conduct. According to the principles of agency theory, the accountants’ awareness of CG policies and code of conduct will contribute towards mitigating against the informational asymmetry within organizations. Furthermore, when accountants understand the composition of the board of directors and the policies of the organization, they will have an increased level of accountability and internal transparency. As a result, the likelihood that a person will engage in fraud will decrease.
• H2—The integration of forensic accounting services into internal control. According to the theories espoused in the fraud triangle, when forensic accountants are integrated into an organization’s internal control system, it will reduce the opportunity component of fraud and enhance the organization’s capacity to identify and investigate anomalies concerning financial activity, identifying responsible parties and deterring anticipated fraud through proactive monitoring and controls (Abdullahi & Mansor, 2018).
• H3—Fraud awareness training for the board of directors (BOD) and key managerial personnel (KMP). According to agency theory, targeted training programs will enhance the board’s and KMP’s capacity to exercise ethical and responsible oversight of financial activity. Informed leadership will be better positioned to identify indicators of potential fraud and enforce governance standards. Therefore, the likelihood of management engaging in fraud will be diminished. Furthermore, this initiative reflects the principles of stakeholder theory by supporting ethical stewardship and protecting shareholder trust.
• H4—Training for accountants to identify forensic red flags (Xanthopoulou et al., 2024). According to both the fraud triangle and stakeholder theories, comprehensive training for accountants to identify forensic red flags in a timely manner will position accountants to detect fraudulent activity at an early stage, thereby reducing opportunities for fraud. Furthermore, comprehensive training regarding fraud awareness aids in creating and/or sustaining an ethical culture of transparency and encourages whistle-blowing. By communicating appropriate roles and responsibilities for both the board and accounting professionals, organizations can demonstrate their commitment to protecting stakeholder interests and honorable conduct. Furthermore, these four interrelated concepts will serve as the strategic pillars of the integrated fraud prevention framework, where the integration of the components will mitigate fraud risk. Overall, the conceptual framework that has been created based upon the agency, stakeholder, and fraud triangle theories will serve as a foundation for internal accountability, compliance with ethical standards, and transparency within organizations. The relationship between the four factors identified above and the fraud prevention effectiveness is illustrated in Figure 3. The whistle-blower complaints (WBC) will be used as a moderator variable, which will strengthen the relationship between the four factors. The establishment of an effectivewhistle-blowerr complaints process will increase organizations’ ability to establish transparency and accountability, and thus, amplify the effectiveness of governance awareness and internal controls in preventing fraud (Kaplan et al., 2011; Cho & Song, 2015; Latan et al., 2021; Singal & Goyal, 2019; Zhang et al., 2022).

The agency theory identifies whistle-blowing as a way to address information asymmetries between agents and principals through “exposing” fraudulent or hidden activities (Jensen & Meckling, 1976; Dyck et al., 2010), while stakeholder theory addresses how that same whistle-blowing process reinforces trust and legitimacy through the coupling of ethical alignment between internal/external parties (Alleyne et al., 2018); and from the perspective of the fraud triangle theory (Cressey, 1953), the presence of whistle-blowing channels reduces the opportunity to commit fraud and increases “perceived detection risk”.

Empirical evidence has provided support for this moderate relationship in practice. Research has shown that organizations function successfully with whistle-blowing systems, detect irregularities sooner, and minimize the amount of monetary losses associated with those irregularities (Kaplan et al., 2011). Moreover, those organizations with high levels of fraud awareness or governance knowledge will generally experience more employees who utilize the credible whistle-blowing process, thereby improving their chances of preventing fraud (Taylor & Curtis, 2010; Yang & Lee, 2020). Supporting this assertion, therefore, the WBC serves as a contextual moderator for an organization, enhancing the relationship between governance awareness and fraud prevention-related outcomes when there is emphasis placed on transparency and ethical responsibility. Building on the agency, stakeholder, and fraud triangle theories, this model illustrates how a combination of governance awareness, training, and a transparent whistle-blowing system can diminish opportunities for corporate fraud.

6. Research Methodology

To collect data for this study, researchers administered a structured questionnaire to accountants from ‘accounts and finance departments’ of corporate organizations in several sectors, including manufacturing, IT and ITES, and other sectors (including both listed and unlisted companies). Prior to data collection, all participants provided written informed consent after being informed of the study’s purpose, procedures, confidentiality assurances, and their right to voluntary participation and withdrawal without penalty. Completion and submission of the questionnaire implied informed consent, in accordance with ethical standards for research involving human participants. The study protocol was reviewed and approved by the institutional Ethics Committee and was conducted in compliance with the ethical principles outlined in the declaration of Helsinki.

The survey was administered online via Google forms, with distribution via email and WhatsApp links. The data collection period was from April 2023 to May 2024. The study employed a non-probability sampling technique, specifically snowball sampling, wherein initial respondents referred to subsequent participants for the survey. Snowball sampling method is cost-effective, and researchers will end up with a sample that is very relevant to the research study. Accountants have their professional body, and through contact with one, we can reach multiple consultants of the same domain, which will give better results. This study needs a homogeneous group of professional accountants. A total of 159 survey invitations were sent via email and WhatsApp. Of these, 150 responses were fully completed and deemed usable for analysis. Participants provided information on gender, age group, educational qualifications, industry/sector, work experience, company turnover, and whether their company was BSE-listed. Further respondents rated statements on a five-point Likert scale (1 = Strongly Disagree to 5 = Strongly Agree) regarding: being knowledgeable with FA, awareness of CG regulations as an internal control measure, the availability of FA services, fraud awareness training received in the last two years, and the need for training among board members and key managerial personnel, and the question of whistle-blower-reported complaints in the last five years was measured on a binary scale (Yes or No).

To ensure the reliability of the survey instrument, Cronbach’s coefficient alpha (α) was computed for all 150 valid responses. This coefficient assesses the internal consistency of the questionnaire, reflecting how closely related the items are as a group. The Cronbach’s alpha was calculated using Equation (1), originally proposed by Cronbach (1951):

$$\alpha ={\displaystyle \frac{K}{K-1}}\times \left(1-\left(\sum {\displaystyle \frac{{\delta }_i^2}{{\delta }_X^2}}\right)\right)$$

(1)

Equation (1) − Cronbach’s alpha coefficient alpha

where K represents the total number of items in the scale, ${\delta }_i^2$ denotes the variance of each individual item, and ${\delta }_X^2$ refers to the variance of the total score across all items.

The results of the reliability test are presented in

Table 1. Calculation of Cronbach’s coefficient alpha value.

No. of Questions (K)	Variance of Each Individual (${\mathit{\delta }}_{\mathit{i}}^2$)	Variance of Total (${\mathit{\delta }}_{\mathit{X}}^2$)	Cronbach’s Alpha (α)
9	4.75	16.87	0.81

, which shows the number of questions, individual item variances, total variance, and the resulting Cronbach’s alpha value.

According to established reliability benchmarks, a Cronbach’s alpha value between 0.8 and 0.9 indicates good internal consistency (Cronbach, 1951). As presented in Table 1, the computed α value of 0.81 confirms that the survey questionnaire demonstrates a satisfactory level of reliability, making it suitable for further statistical analysis.

As the survey responses are on a Likert Scale, data are categorical (count of responses) and are commonly used to examine the association between two categorical variables when data are presented as frequency counts. Therefore, the Chi-square test was best suited to test the hypothesis. The analysis integrates descriptive statistics, Chi-square tests of association, and binary logistic regression modeling to test the proposed hypotheses. Binary logistic regression is a statistical analysis technique used to model the relationship between one or more independent (predicator) variables and a binary (two-category) dependent variable that is an outcome that can take only two possible values, such as a Yes or No. The IBM SPSS software(IBM SPSS version 25) was used for data analysis and interpretation.

All tables are sourced from IBM-SPSS software.

7. Data Analysis and Interpretation

The collected data were analyzed using both descriptive and inferential statistical techniques to examine the relationships among corporate governance awareness, forensic accounting practices, fraud awareness training, and fraud prevention. The analysis was performed in two parts. The first part provides contextual demographic information on the respondents in relation to their organization, years of experience in the industry, and what industry sectors they represent. The second part contains statistical tests (e.g., Chi-Square and logistic regression) that were performed on the data to support/reject the proposed hypotheses.

7.1. Demographics Analysis

The results of the demographic analysis enable us to determine the characteristics of participating individuals based on their demographics so that we are able to apply the subsequent analytic results in a way that conveys meaningful insights.

Table 2. Accountant’s survey data—demographic sample description.

Variable	Frequency	Percentage (%)
Gender
Male	102	68.0
Female	48	32.0
Educational Qualification
Graduation	55	36.7
Post Graduation	95	63.3
Years of Experience
20 to 30 Years	40	26.7
31 to 40 Years	77	51.3
41 to 50 Years	28	18.7
51 to 60 Years	4	2.7
Above 60 Years	1	0.7
Industry/Sector
Manufacturing	43	28.7
IT/ITES Service	82	54.7
Other	25	16.7
Work Experience
Less than 5 Years	27	18.0
5 to 10 Years	45	30.0
10 to 15 Years	36	24.0
15 to 20 Years	37	24.7
More than 25 Years	5	3.3
BSE-listed
Yes	70	46.7
No	80	53.3

(Source: researcher’s survey data, 2024).

displays that there was a total of 150 accountants from different corporate sectors in India who participated in the survey. In addition, the demographic profiles of all the participants provide valuable information about the sample. The sample of accountants was predominantly composed of male participants (68%). While 32% of participants were female, this indicates that the accounting profession, particularly at the corporate level in India, may be predominantly male. Sixty-three and three tenths of respondents indicated that they possess postgraduate educational qualifications, while thirty-six and seven-tenths of respondents stated that they only hold graduate qualifications; therefore, this suggests that there are high levels of academic achievement among the respondents, which indicates that the majority of the sample has received sufficient education to fully comprehend the concept of corporate governance and fraud. When looking at the professional experience of the sample, over fifty percent of respondents (51.3%) have between 31 and 40 years of professional service, whereas the next largest percentage (26.7%) is made up of respondents with between 20 and 30 years of professional experience, while 18.7% of respondents have been in professional practice for 41 and 50 years, and only a tiny number of respondents possess over 50 years of experience, with only 0.7% of the sample having worked for more than 60 years. This gives evidence to support the conclusion that the sample is a mature and highly experienced sample group, with over three decades of professional experience. As for sector representation, there were no less than fifteen percent of respondents who worked in the IT/ITES industry (54.7%), while the manufacturing (28.7%) and other (16.7%) industries were also represented; this suggests that, collectively, the majority of respondents are part of service-oriented and technology companies; therefore, the associated governance structures and fraud exposures for these types of organizations may differ substantially from those found in conventional manufacturing environments. Among the cohort of respondents, there was a broad range of work experience within their current roles, with thirty percent of respondents reporting between independent and functional duration of time within five to ten years, twenty-four and seven tenths reporting between independent and functional duration of time between fifteen years and twenty years, twenty-four percent reporting between independent and functional duration of time between ten years and fifteen years, and eighteen percent reporting less than five years of direct functional experience, while only three and three tenths percent have been in their current roles for more than twenty-five years; collectively, these indicate that the respondents possess moderate-to-extensive professional experience overall in their current organizations. Notably, there were forty-six and seven tenths of respondents who were employed by corporations listed on the BSE, while fifty-three and three tenths of respondents were employed by non-listed companies; therefore, this balanced representation of respondents with respect to company type enhances the external validity of the findings from the current study, providing an excellent resource to assess fraud prevention activities within different types of corporate organizational structures across India.

The graphical analysis in Figure 4 reveals the distribution of female accountants across different age groups, educational qualifications, and sectors. We can see that the majority of the female population is postgraduate and is working is IT/ITES sector.

This shows the demographic patterns and participation levels of women in the accounting profession. This suggests that younger female accountants (20–30 years) are more likely to work across sectors, especially in entry-to-mid-level roles. Women in the age group of 31–40 years with higher education are heavily concentrated in ITES and professional domains.

Figure 5 shows the distribution of male accountants across different educational qualifications and sectors, segmented by age groups. Men in the age range of 31–40 years are the most active professional age group. Male participation is more evenly spread across sectors than females, with stronger representation in manufacturing and other sectors. The 41–50 years group in males remained significantly active, especially in skilled roles (postgraduates and ITES), unlike the female data, which showed a decline post-40.

Figure 6 shows a comparative view of accountants’ awareness regarding corporate governance (CG) and forensic accounting services (FAS) across different age groups in the IT/ITES sector. The results in Figure 6 indicate that corporate governance (CG) awareness is highest among respondents aged 31–40 years, suggesting that mid-career professionals in IT/ITES are more actively engaged with governance practices and regulatory compliance. Individuals aged 51 to 60 have consistently exhibited the least level of awareness toward CG (corporate governance) and forensic accounting services when compared to other age groups. As this age cohort frequently comprises individuals employed in managerial positions or in supervisory capacities who are closest to the implementation of organizational policies and ethical behavior, their lack of CG and FAS awareness may reflect a generational gap in their education about modern governance frameworks, emerging financial technologies, or new fraud detection methods that are becoming more common.

The comparison between manufacturing accountants regarding their levels of understanding and familiarity of CG and FAS as represented on the CG/FAS Chart in Figure 7 indicates that when comparing the manufacturing sector with the IT/ITES Sector, respondents aged 31–40 years had a lower level of understanding than their younger counterparts. In addition, respondents aged 20–30 exhibited low levels of familiarity with the forensic accounting field (FAS). Together, these two age groups represented approximately 75% of all survey participants, and as such represent a significant portion of the overall employee population. This creates a knowledge gap for early-to-mid-career employees, suggesting that the manufacturing sector is significantly behind in its use of forensic accounting as an anti-fraud control as compared to the IT/ITES Sector.

In Figure 8, different age groups across many other sectors show that accountants in these sectors know CG and FAS policies to varying degrees. The “other” sector (where hospitals, educational institutions and insurance companies are) shows a very low level of familiarity with either CG or FAS policies. Also shown in Figure 8 is that there are only a small number of accountants aged 20 to 30 that are familiar with these concepts, which suggests that the “other” sector is lagging behind the IT/ITES sectors in adopting CG and FAS practices.

Cross-sectoral observations show that the 31–40 years group consistently exhibits the highest levels of awareness in both CG and FAS across all sectors. Younger professionals (20–30 years) are becoming aware of this but need structured training and exposure. Older professionals of 51–60 years generally lacked awareness or engagement with CG and FAS practices. IT/ITES professionals showed the highest awareness overall, followed by manufacturing; other sectors lagged in FAS awareness. Thus, accountants from all sectors with high awareness of CG also demonstrate a strong understanding of FA. This suggests that a correlation between two accountants who are well-versed in CG policies or codes of conduct are also more likely to be aware of fraud prevention measures.

Table 3. Accountant’s survey sample—data of awareness factor.

Variable	Frequency	Percentage (%)
Awareness of Forensic Accounting Domain
Strongly Disagree	23	15.3
Disagree	38	25.3
Neutral	50	33.3
Agree	32	21.3
Strongly Agree	7	4.7
Awareness of Corporate Governance Policies
Strongly Disagree	1	0.7
Disagree	5	3.3
Neutral	53	35.3
Agree	71	47.3
Strongly Agree	20	13.3
Currently Using Forensic Accountant’s Services as an Internal Control
Strongly Disagree	80	53.3
Disagree	57	38.0
Neutral	12	8.0
Agree	1	0.7
Strongly Agree	0	0
Conducted Fraud Awareness Training in Last 2 Years
Strongly Disagree	40	26.7
Disagree	98	65.3
Neutral	9	6.0
Agree	2	1.3
Strongly Agree	1	0.7
Awareness of Suspected Fraud Incidents Reporting Process
Strongly Disagree	0	0
Disagree	13	8.7
Neutral	60	40.0
Agree	70	46.7
Strongly Agree	7	4.7
Whistle-Blowers Complaints Reported in Last 5 Years.
Yes	65	43.3
No	85	56.7

(Source: researcher’s survey data, 2024).

provides a comprehensive overview of accountants’ awareness and organizational practices related to CG and FAS. The results reveal that awareness of CG policies is relatively strong; 60.6% of respondents reported being aware of their organization’s governance policies. Awareness and implementation of FA remain limited. Only 26% of respondents agreed or strongly agreed that FA practices are understood or applied within their organizations, indicating that FA is still an emerging concept among Indian accounting professionals. In addition, nearly all respondents (91.3%) either disagreed or strongly disagreed that fraud awareness (FA) forms part of their organization’s internal control system. This indicates a considerable difference between being aware of FA and implementing FA in practice. Many respondents also expressed a lack of FA training in the last two years, and this is troubling. Only 8.7% of respondents disagreed that their organization has a system for reporting incidents of fraud; however, many remain uninformed about the procedures for reporting fraud and, thus, are unable to use that information to find/prevent fraud.

According to Table 3, employees are mainly not educated on how to properly report incidents of fraud, which hampers their ability to control fraud risk effectively.

7.2. Analytical Framework and Hypothesis Testing

A two-stage analytical process will be used to evaluate how governance and fraud prevention relate to reporting whistle-blower complaints within organizations participating in this study. The independent variables of this study are awareness of corporate governance policies (AwCGP), forensic accountants’ services as internal controls (FASIC), providing fraud awareness training to members of the board of directors (BoD) and key management personnel (KMP) (FATBoDKMP), and training for accountants on the forensic auditor’s red flags (TFRF). The dependent variable for the study is whether whistle-blower complaints (WBCs) were reported in each of the study participants’ organizations. WBCs also represent an important moderate influence within the area of fraud prevention. In this context, WBCs are viewed as a significant moderating factor supporting researchers in understanding how governance mechanisms impact the ability of organizations to prevent fraud. Researchers have found in earlier studies that WBCs are a key behavioral control mechanism that moderates the effectiveness of corporate governance and ethical policies in detecting and preventing unethical activities (Kaplan et al., 2011). An organization having WBCs supports their transparency and accountability culture, which in turn, enhances the effects of corporate governance awareness and the use of forensic accountants as internal controls on the overall effectiveness of fraud deterrence (Latan et al., 2021; Zhang et al., 2022).

The first step in the analysis is to perform a Chi-square test of independence to explore the association between the independent variables and WBCs. As a non-parametric statistical method, the Chi-square test of independence provides researchers with a method for assessing whether a statistically significant association exists between the independent variables and WBCs for each study participant. The Chi-square statistics are calculated using the formula:

$$x^2=\sum {\displaystyle \frac{{(O_{ij}-E_{ij})}^2}{E_{ij}}}$$

(2)

where $O_{ij}$ represents the observed frequency in the ith row and jth column, and $E_{ij}$ denotes the expected frequency under the assumption of independence.

The methodology follows the guidelines from McHugh (2013) and Pallant (2020), which state that Chi-square tests can be used to assess whether there are associations between categorical variables in survey-based studies. In the following section, results of this communication will be provided to determine if fraud awareness initiatives (AIs) and governance services (GSs) have a statistical relationship with whistle-blower reporting (WBR) as a means to provide empirical support for the fraud prevention framework (FPF) that has been proposed. In this second phase, the variables in the Chi-square analysis that showed statistically significant correlations were further analyzed using binary logistic regression. The logistic regression provides estimates of how the variables governance awareness (GA), forensic accounting usage (FAU) as an internal control (IC), and fraud awareness training (FAT) influence the probability that an organization would detect fraud and receive WBRs. Specifically, the logistic regression model tested whether the existence of code(s) of governance (CG) awareness, the use of FA services, and the provision of FAT to boards of directors (BoD) and key management personnel (KMP) would increase WBR activity levels. The goodness of fit of the logistic regression model was assessed using the Hosmer–Lemeshow test, while the Wald statistics were used to assess the statistical significance of each predictor. The combined analyses from these two phases provide both association and predictive evidence of the potential influence that GA, FA and FAT can have on improving ethical accountability and the strengthening of fraud prevention mechanisms within organizations.

7.3. Results and Hypothesis Interpretation

In this section, the authors present the outcomes of their statistical analysis to evaluate their initial hypotheses and to provide empirical support for the proposed conceptual model. The interpretation of the results follows a structure aligned with the four hypotheses (H1–H4) of this thesis, with the addition of combining statistical results with theoretical foundations (agency theory, stakeholder theory and fraud triangle theory). The results show that enhancing governance awareness, using forensic accounting as an internal control system, and providing targeted training in fraud awareness for senior leaders and forensic training for accountants has a significant impact on how fraud prevention mechanisms in Indian corporate organizations are strengthened.

• Interpretation of H1:

H1a: 

Accountants’ awareness of CG policies is not associated with fraud prevention.

H1b: 

Accountants’ awareness of CG policies is associated with fraud prevention.

To test this relationship, a Chi-square test of independence was conducted to examine the association between whistle-blower complaint reporting and awareness of CG policies. The moderating variable whistle-blower complaints (WBC) was measured dichotomously based on responses to the item: “Has any whistle-blower complaint been reported in your company in the last five years?” (Yes/No). The independent variable, AwCGP (Awareness of Corporate Governance Policies), was measured on a five-point Likert scale (1 = Strongly Disagree to 5 = Strongly Agree).

The Chi-square test assessed whether the awareness of corporate governance policies was significantly associated with the incidence of whistle-blower complaints.

The results in

Table 4. Chi-square results for H1.

Chi-Square Tests
	Value	df	Asymptotic Significance (2-sided)
Pearson Chi-Square	41.113 a	4	0.000
Likelihood Ratio	49.216	4	0.000
Linear-by-Linear Association	38.885	1	0.000
N of Valid Cases	150

^a A total of 4 cells (40.0%) have an expected count of less than 5. The minimum expected count is 0.43.

indicate a statistically significant relationship between the two variables (χ² = 41.113, df = 4, p < 0.05). This suggests that a higher awareness of CG policies among accountants is associated with a greater likelihood of whistle-blower reporting. As a result, the null hypothesis has been discarded in favor of the alternative hypothesis. The study provides further support for stating that educating employees regarding the principles of corporate governance will assist in establishing within organizations an ethical environment and increasing the effectiveness of fraud deterrence programs. A strong theoretical basis exists for these findings, based on the agency theory. According to the agency theory, the reduction in the amount of asymmetrical information between the principal (owner/shareholder) and the agent (employee/operator) will enhance internal controls and reduce the likelihood of opportunistic behavior by the agent (Jensen & Meckling, 1976). Furthermore, stakeholder theory posits that increased awareness of a governance framework promotes transparency, accountability, and ethical decision-making and aligns individual behavior with both organizational and societal expectations (Freeman, 1984). Thus, when an accountant has been educated and also understands the corporate governance policies within their organization, they are likely to be ethically responsible, detect anomalies, and report these via the appropriate channels in a timely manner, thus reducing the potential for fraud. In order to provide additional confirmation of these findings and to quantify the predictive ability of the variables involved, binary logistic regression was performed, comparing the relationship between whistle-blower complaints (WBC) and awareness of corporate governance policies (AwCGP) with WBC acting as a moderating variable and AwCGP (independent predictor) on employee ethical conduct. The Omnibus test of the model coefficients for this analysis resulted in statistically significant data (χ² = 45.399, p < 0.001), indicating that the model can explain approximately 35% variance in WBC behavior (Nagelkerke R² = 0.350).

Furthermore, the goodness-of-fit test for logistic regression (Hosmer categorized fit) also confirmed a satisfactory relationship (χ² = 3.092, p = 0.213). The results of the regression analysis specifically indicate that a positive, statistically significant coefficient was found for the variable awareness of corporate governance code (B = 1.832, SE = 0.329, Wald = 30.925, p < 0.001). The odds ratio Exp(B) = 6.244 indicates that if an employee is aware of their corporate governance code, they will be approximately 6.24× more likely to file a WBC than someone who is not aware of this code. Additionally, the overall model achieved a correct classification rate of 74.7% of cases compared to a baseline accuracy of 56.7%.

As a result, both the Chi-square analysis and the logistic regression analysis illustrate the robustness of the findings to hypothesis 1 that awareness of corporate governance policies significantly improves ethical vigilance and detecting capacity of accountants. By educating employees regarding governance and providing a defined code of ethics, organizations will improve the transparency, accountability, and effectiveness of fraud prevention efforts.

• Interpretation of H2

H2a: 

The inclusion of forensic accountants’ services is not associated with fraud prevention.

H2b: 

The inclusion of forensic accountants’ services is associated with fraud prevention.

A Chi-square test of independence was used to test for a relationship between the use of forensic accountants as part of an organization’s internal control systems and the likelihood of whistle-blower complaint cases being reported. The independent variable, FASIC forensic accountants, was measured using a five-point Likert scale. This analysis determined that organizations that incorporate forensic accountants into their internal control systems have a greater likelihood of receiving whistle-blower complaints, which indicates that such organizations have stronger fraud deterrence systems in place.

The results of the Chi-square analysis presented in

Table 5. Chi-square results for H2.

Chi-Square Tests
	Value	df	Asymptotic Significance (2-sided)
Pearson Chi-Square	25.988 a	3	0.000
Likelihood Ratio	27.395	3	0.000
Linear-by-Linear Association	22.737	1	0.000
N of Valid Cases	150

^a A total of 2 cells (25.0%) have an expected count of less than 5. The minimum expected count is 0.43.

demonstrate that there is a statistically significant association between using forensic accountants as a component of internal control systems and the number of whistle-blower complaints filed. The Pearson Chi-Square statistic was 25.988 with 3 degrees of freedom (p < 0.001).

This null hypothesis was rejected in favor of the alternative hypothesis. This indicates that organizations with a forensic accountant’s services show increased diligence in preventing fraud. By effectively integrating forensic expertise into an organization, internal controls are strengthened through additional enhancements to early warning systems for fraud detection, therefore reinforcing the reliability of internal control systems.

A binary logistic regression analysis was also undertaken to assess the strength and direction of the relationship between the WBC (Reported/Not Reported) and FASIC as predictor. The Omnibus test of model coefficients was found to be statistically significant (χ² = 25.818, p < 0.001) and explains 21.2% of the variance in fraud prevention outcome (Nagelkerke R² = 0.212), with a fair fit of the model confirmed by the Hosmer–Lemeshow test (χ² = 1.771, p = 0.183), thus indicating that 70% of all cases were correctly classified.

The regression coefficient for the integration of forensic accountants’ services into internal control systems was found to be statistically significant and positive. The regression coefficient is as follows: B = 1.475, SE = 0.328, Wald = 20.265, p < 0.001 with an odds ratio of 4.37 (Exp(B) = 4.370), indicating that organizations that incorporate forensic accountants into their internal control systems have 4.37 times the odds of reporting a whistle-blower complaint than those who do not. This finding reinforces the importance of forensic accountants as a major part of organizational governance, providing a unique and systematic process to prevent fraud and mitigate risk.

Theoretical implications of the findings also highlight how forensic accountants diminish information asymmetry between shareholders and management, thus enhancing the accountability of management to shareholders under the agency theory (Jensen & Meckling, 1976). The integration of forensic accountants into an organization also enhances the level of confidence among all stakeholders through enhanced accountability under stakeholder theory (Freeman, 1984). Integrating forensic accountants’ services into the internal control system enhances fraud prevention efficiency, supporting the proposed hypothesis.

• Interpretation of H3

H3a: 

Fraud awareness training for board members and key managerial personnel (KMP) is not associated with fraud prevention.

H3b: 

Fraud awareness training for board members and key managerial personnel (KMP) is associated with fraud prevention.

To examine the relationship between fraud awareness training for the board of directors (BoD), top management, and the reporting of whistle-blower complaints, a Chi-square test of independence was performed. WBC and the independent variable FATBoDKMP were measured on a five-point Likert scale (Strongly Disagree to Strongly Agree). This analysis aimed to determine whether perceptions regarding the necessity of leadership-level fraud awareness training are associated with organizational whistle-blower activity, which is an indicator of fraud prevention effectiveness.

The Chi-square results from

Table 6. Chi-square results for H3.

Chi-Square Tests
	Value	df	Asymptotic Significance (2-sided)
Pearson Chi-Square	13.204 a	2	0.001
Likelihood Ratio	13.661	2	0.001
Linear-by-Linear Association	13.067	1	0.000
N of Valid Cases	150

^a A total of 2 cells (33.3%) have an expected count of less than 5. The minimum expected count is 0.43.

show a Pearson Chi-square value of 13.204 (df = 2, p = 0.001), which is statistically significant at the 0.05 level.

The alternative hypothesis was supported, suggesting that there was a strong relationship between the need perceived by the BoD and KMP’s for fraud awareness training (FAT) and the ability of organizations to report whistle-blower complaints. Therefore, organizations that provided FAT at the leadership level were more likely to have a greater chance of creating, promoting, and sustaining an ethical environment, as well as having procedures in place that made it easier to detect fraud at the earliest point possible. The findings highlight the role of executive awareness in strengthening the control environment, reinforcing the idea that fraud prevention is most effective when led from the top.

To further evaluate the predictive strength of leadership-level fraud awareness on whistle-blower reporting, a binary logistic regression analysis was conducted, with WBC (reported/not reported) and the perceived need for BoD training, FATBoDKMP, as the independent variable. The overall Omnibus test of model coefficients model was statistically significant, χ²(1) = 13.299, p < 0.001, indicating that the predictor variable significantly improved model fit compared to the constant-only model. The model explained between 8.5% (Cox and Snell R²) and 11.4% (Nagelkerke R²) of the variance in whistle-blower complaint reporting and correctly classified 65.3% of cases, an improvement from the baseline accuracy of 56.7%. The Hosmer–Lemeshow goodness-of-fit test was non-significant (χ² = 0.202, df = 1, p = 0.653), suggesting an adequate model fit.

The logistic regression coefficient for the predictor variable was positive and statistically significant (B = 1.215, SE = 0.342, Wald = 12.593, p < 0.001), with an odds ratio of 3.371 (Exp(B) = 3.371). This implies that respondents who perceived a need for fraud awareness training for the BoD and KMP were approximately 3.37 times more likely to report whistle-blower complaints compared to those who did not. The constant term was also significant (B = −5.289, p = 0.001), indicating a very low baseline likelihood of whistle-blower reporting in organizations where leadership training was not perceived as necessary.

Theoretical frameworks such as agency theory (Jensen & Meckling, 1976) provide an understanding how informed and ethical leaders help to mitigate the information asymmetries and agency conflicts between management and shareholders. Similarly, the principles of stakeholder theory (Freeman, 1984) state that by providing an organization’s leaders with fraud prevention awareness, it enhances the leaders’ ability to be accountable and responsive to stakeholder interests, creating an organizational culture that promotes trust and aligns with ethical governance.

The data from the Chi-square and logistic regression analyses support the conclusion that providing leadership with fraud prevention awareness training enhances an organization’s ability to identify potential fraud risks, as well as the likelihood of ethical reporting (through whistle-blower mechanisms). Therefore, the results provide support for the rejection of the null hypothesis (H0), while supporting the acceptance of the alternative hypothesis (H1) that there is a positive relationship between leadership-level training on fraud awareness and fraud prevention outcomes. Therefore, the data supports the proposition that the effective management of fraud, in addition to having established, documented processes and procedures for mitigating the risk of fraud, also requires the establishment of informed and ethical leaders dedicated to creating an organizational culture that is open, transparent, and accountable.

• Interpretation of H4

H4a: 

Timely training on forensic red flags for accountants is not positively associated with fraud prevention.

H4b: 

Timely training on forensic red flags for accountants is positively associated with fraud prevention.

To investigate whether timely forensic red-flag training for accountants is associated with enhanced fraud prevention measured through WBC, a Chi-square test of independence was employed. The WBC (response options: Yes/No) and the independent variable TFRF measured on a five-point Likert scale (Strongly Disagree to Strongly Agree). This analysis aimed to determine whether organizations that conduct regular fraud awareness or forensic red-flag training for accountants who are working at lowest level exhibit greater reporting of whistle-blower complaints, which is an indicator of fraud prevention culture.

As shown in

Table 7. Chi-square results for H4.

Chi-Square Tests
	Value	df	Asymptotic Significance (2-sided)
Pearson Chi-Square	6.913 a	4	0.141
Likelihood Ratio	7.934	4	0.094
Linear-by-Linear Association	4.813	1	0.028
N of Valid Cases	150

^a A total of 5 cells (50.0%) have expected a count of less than 5. The minimum expected count is 0.43.

, the Pearson Chi-square value was 6.913 (df = 4, p = 0.141), which is not statistically significant at the 0.05 level.

Therefore, the null hypothesis could not be rejected, suggesting that no strong statistical evidence exists to support a direct association between forensic red-flag training to accountants and fraud prevention, as reflected through whistle-blower activity. The results indicate that training initiatives alone may not significantly influence fraud prevention outcomes; it is possible that other contextual or organizational factors such as leadership commitment or reporting mechanisms mediate this relationship.

The results of the linear-by-linear association test showed a statistically significant association between training intensity and reporting misconduct. Increasing the intensity of training has been associated with an increase in the likelihood of reporting misconduct. This indicates a weak but potentially increasing association between training and reporting, suggesting that an increase in training intensity may lead to increased employee awareness and willingness to report wrongdoing as well. There was a moderate level of Chi-square assumptions violations, as 50% of the expected counts were less than the minimum threshold of 5. A smaller number of expected counts can lead to an inflation or distortion of the test statistics. There is also potential for this limitation due to the uneven distribution of responses to the categories. Although the linear-by-linear association test indicated a statistically significant directional relationship (p = 0.028), further caution is urged with interpreting this finding. Future research could employ Fisher’s exact test or category collapsing to address this limitation. However, the subsequent logistic regression analysis, which is robust to such assumption violations, strengthens the overall validity of the observed relationship. To further explore the potential predictive relationship between timely forensic red-flag training for accountants and whistle-blower reporting, a binary logistic regression analysis was conducted. The presence of reported whistle-blower complaints (Yes/No), and the independent variable TFRF was whether the organization had conducted fraud awareness training on forensic red-flag in the past two years (Yes/No).

The Omnibus test of model coefficients was statistically significant (χ²(1) = 5.106, p = 0.024), demonstrating that the inclusion of fraud awareness training significantly improved the prediction of whistle-blower complaint reporting compared to the intercept-only model. The Cox and Snell R² (0.033) and Nagelkerke R² (0.045) values indicate that the model explained between 3.3% and 4.5% of the variance in whistle-blower reporting. Although modest, these results confirm that training contributes meaningfully to predicting fraud-related reporting behavior. The Hosmer–Lemeshow test was non-significant (χ²(1) = 0.408, p = 0.523), suggesting a good model fit, while the overall classification accuracy was 59.3%, improving upon the baseline accuracy of 56.7%. Specifically, the model correctly predicted 33.8% of the “Yes” responses and 78.8% of the “No” responses, indicating better performance in predicting companies without whistle-blower complaints.

The logistic regression coefficient for fraud awareness training on forensic red-flag to accountants was positive and statistically significant (B = 0.619, SE = 0.288, Wald = 4.611, p = 0.032), with an odds ratio of 1.857. Organizations that have implemented fraud awareness training within the previous two years have seen a significant increase in the likelihood of whistle-blower complaints, approximately 1.86 times higher than organizations without such training. The constant term (B = −0.857, p = 0.115) was not statistically significant, indicating that organizations without any fraud awareness training will have a very low baseline likelihood of reporting complaints.

While the Chi-square test does not support a strong overall association, the logistic regression analysis demonstrated that organizations that implement fraud awareness have a statistically significant positive effect on the likelihood of reporting a whistle-blowing complaint. This suggests that fraud awareness training creates a greater degree of ethical awareness and encourages an organizational culture favorable to reporting in an early manner and supporting the corporate goal of detecting fraud as early as possible. Based on the fraud triangle theory (Cressey, 1953; Kassem & Higson, 2020), regular forensic red-flag training may also reduce the opportunity component for fraud by making employees aware of various cues and developing greater preventive vigilance. The results of this study support the findings of other empirical studies that have shown that organizations that have implemented ethics-oriented training and awareness programs that improve their employees’ potential for reporting misconduct (Alleyne et al., 2019; Park & Blenkinsopp, 2009; Latan et al., 2021; Alleyne et al., 2018). In addition, viewed through the lens of stakeholder theory (Freeman, 1984), these results underscore the importance of promoting accountability, trust and integrity at every level of the corporate structure, which is fundamental to preventing the commission of fraud (Zhang et al., 2022; Mensah & Azila-Gbettor, 2018).

7.4. Discussions of Findings

Based on this analysis, organizations that provided fraud awareness training to employees during the previous 2 years had a reported incidence of whistle-blower complaint reporting that was approximately 1.86 times greater than organizations that did not provide this training. The negative constant (B = −0.857, p = 0.115) indicates that organizations that did not provide fraud awareness training had low baseline whistle-blower reporting probabilities.

This research reinforces the importance of CG and FA in enhancing the effectiveness of anti-fraud frameworks within organizations. In particular, corporate governance policy awareness among accountants was found to be an essential element of increased professional competence, ethical standards, and regulatory compliance; accountants with an understanding of their organizations’ governance principles will perform key functions, such as detecting fraud, assessing internal controls, mitigating risk, and evaluating governance processes, at a higher level than accountants without this knowledge. These findings are consistent with other studies demonstrating that awareness of CG principles by professionals in the accounting field enhances transparency, accountability, and integrity in financial reporting (Al-Janadi et al., 2013; Bhasin, 2016a; Hajizadeh & Hajizadeh, 2019; Rehman & Hashim, 2018b, 2021; Novatiani et al., 2024). CG awareness serves as a major component of corporate governance and, therefore, is also integral to professional ethics.

Forensic accountants provide the skills and knowledge necessary to improve CG practices through their analytical abilities and expertise. Studies have shown that incorporating forensic accountants into the internal control function of an organization increases the ability of that organization to detect and prevent managerial fraud during the earliest stages of fraudulently obtained information. This is consistent with prior research showing that the integration of forensic accountants into internal controls enhances the quality of the audit and improves the organizational ability to identify and address fraud (Al-Janadi et al., 2013; Bhasin, 2016b; Rehman & Hashim, 2021; Ramaswamy, 2005). Figure 9 graphically depicts the findings of a survey conducted on how companies use FA services; the survey findings showed that the majority of sample organizations did not employ forensic accountants in-house within their internal control mechanisms. This has significant implications for corporate fraud risk management systems and indicates the need for organizations to establish the use of forensic expertise as part of their institutionalized governance processes to more effectively monitor and combat financial irregularities.

In addition, while there were previous theoretical arguments and empirical literature regarding the value-for-money of providing accountants with training on forensic red flags to help improve early detection of fraud and compliance monitoring, the findings of this study showed that the perceived benefits of training on forensic red flags were not substantiated by the data collected in this study. The Chi-square test (p = 0.141) and results from logistic regression analysis did not reveal a statistically significant association between the training provided to forensic report accountants on how to detect and report whistle-blower complaints and the act of reportingwhistle-blowerr complaints.

There may be several contextual factors that contribute to the lack of empirical evidence supporting the value of providing accountants with training on identifying forensic report patterns and engaging those reporting whistle-blower complaints. While many Indian corporations do not routinely provide training or develop standardized guidelines regarding how to detect forensic report patterns, providing such training typically primarily focuses on compliance. In addition, employees may not feel secure or protected from retaliation for reporting evidence of occupational fraud, thereby making it unlikely for them to act upon what they were trained to do. Third, the short-term or theoretical nature of training sessions may fail to translate into sustained behavioral change or improved reporting culture. Finally, it is possible that fraud awareness and detection responsibilities are concentrated at higher management levels, reducing the perceived relevance of forensic training for accountants and lower-tier employees.

Although the linear-by-linear association was significant (p = 0.028), suggesting a potential positive trend, the overall results must be interpreted cautiously due to 50% of expected cell counts falling below the minimum threshold, which slightly violates Chi-square assumptions.

Further binary logistic regression, shown in

Table 8. Logistic regression results for H4.

		B	S.E.	Wald	df	Sig.	Exp(B)
Step 1 a	My organization has conducted fraud awareness training in the last 2 years	0.619	0.288	4.611	1	0.032	1.857
	Constant	−0.857	0.544	2.482	1	0.115	0.424

^a Variable(s) entered on step 1: My organization has conducted fraud awareness training in the last 2 years.

, corroborated the Chi-square results, indicating no statistically significant relationship between fraud awareness training and whistle-blower complaint reporting. The model constant (B = −0.857, p = 0.115) represents the log-odds of a whistle-blower complaint being reported in organizations that did not conduct fraud awareness training, corresponding to odds of 0.424. This suggests that organizations without such training had approximately a 30% probability of reporting whistle-blower complaints. However, the non-significant p-value indicates that this difference may be attributed to random variation rather than a systematic effect.

The results suggest that training businesses with “red flags” for forensic analysis does not appear to directly or significantly influence an employee’s decision to report fraud. While this type of training is likely valuable in theory, the results indicate that training’s impact on actual reporting behavior will ultimately be influenced by contextual variables, including organizational culture, management commitment, and the employees’ belief that reporting is protected.

The qualitative information derived from interviews with corporate finance managers and auditors’ support and provides context for these statistical results. Many of the individuals interviewed expressed concern about providing forensic red-flag training to accountants, fearing that the training would give accountants ‘insider knowledge’ of fraud detection methods, thereby enabling accountants to engage in more advanced types of fraudulent conduct. The apparent tension between the data and the concern regarding the potential for increased fraudulent behavior may account for the relatively weak statistical relationship between reporting behavior and forensic red-flag training.

However, it was found that companies which provided fraud awareness training to their employees were approximately 1.86 times more inclined to receive whistle-blower complaints from those employees. As such, employees who have had some limited exposure to this training are likely to develop a more transparent reporting culture as opposed to engaging in more fraudulent behavior.

Although the empirical relationship between forensic red-flag training and the prevention of fraudulent activity was not statistically significant, it does align conceptually with the theoretical framework of agency theory. Specifically, agency theory suggests that through improved internal governance mechanisms, such as fraud reporting and awareness systems, organizations are able to reduce the agency conflict caused by information asymmetry between the agents (organizational management) and principals (shareholders) of an organization (Jensen & Meckling, 1976). Likewise, through creating an awareness of the potential for fraud through the training initiatives, employees may become more vigilant or ‘become more ethically’ aware, and, therefore, reduce the opportunity for fraud to occur, as defined by the fraud triangle theory (Cressey, 1953).

From an implementation perspective, the findings support stakeholders’ theory (Freeman, 1984), which posits that a company can account for its actions and policies through continuing ethical training and transparent reporting processes with all of its stakeholders.

Collectively, the empirical results of this research demonstrate that the inclusion of forensic accountants within the internal controls of an organization, as well as the provision of fraud awareness training to senior managers, significantly (but not exclusively) improve organizational fraud prevention mechanisms. An improved understanding of CG policies by accountants leads to greater ethical compliance and professional integrity, whereas the integration of the forensic accounting profession leads to an earlier detection and mitigation of financial irregularities. The finding that fraud awareness training of boards (the top managers) and key managerial personnel (KMP) had a positive influence on ethical leadership and developed a culture of transparency through ethical compliance and professional integrity provides evidence to support the stated observations of the CG and stakeholder theories. Furthermore, while forensic red-flag training of accountants appeared to show no statistical significance regarding reporting fraud, it provides evidence that organizations will benefit from offering “red flag” training within the context of the situational and implementation constructs. In summary, the results indicate that CG awareness, continuing professional education, and strategic implementation of forensic accounting improve corporate organizations’ ethical compliance and preventative measures to protect against fraudulent behavior.

7.4.1. Practical Implications

From an academic perspective, the outcomes of this study implement numerous significant insights for practitioners, policymakers, and regulators alike. Employers should develop a systematic framework for educating accountants, board members and senior management regarding fraud awareness. This will create greater ethical awareness and reduce the likelihood of accounting fraud. In addition, the use of forensic accountants in both the internal control system and the audit system has a strong correlation with the detection of fraud risk and the ability to report transparent financial statements. Creating strong mechanisms for whistle-blower would also provide an avenue for those that see instances of wrongdoing or unethical behavior to report what they have seen and be protected from retribution. Governance and ethics training may also be mandated as part of a corporation’s compliance framework to promote ethical competency. Last but not least, continuous monitoring and evaluation of governance training and internal control systems should be the number one priority of an organization to evaluate whether governance training and internal controls prevent future occurrences of fraud in the future. Through all of these measures, corporations have the ability to improve their integrity and the trust of their stakeholders and create a more transparent and resilient governance structure.

7.4.2. Limitations and Future Scope of Research

While this study has been incredibly valuable, there are also some limitations that should be noted when interpreting the results. First, the data was collected using a cross-sectional survey; therefore, the results cannot be used to establish any causal relationships between governance awareness, forensic activities, and outcomes for fraud prevention. Future longitudinal or panel data collection methods could provide additional insight into the time-based dynamics of fraud risk management. Second, the study utilized self-reported perceptions from respondents; as such, the data may reflect some degree of social desirability and/or response bias, particularly with respect to sensitive topics like whistle-blowing and fraud awareness. Future studies should use survey data in conjunction with objective organizational records/audits to bolster validity. Third, even though the sample size was adequate for the statistical methods employed, the generalizability of the findings may be limited due to the sample size having come from one industry and region. Future studies should expand their sample size to include a variety of businesses and multinational settings for improved external validity. The linear-by-linear association test indicated a statistically significant trend (p = 0.028); however, the legitimacy of this finding is limited by the violations of Chi-square assumptions. In particular, half of the expected observations fell below five; thus, the reliability of the Chi-square approximation has been weakened. This suggests that future studies should use larger samples, different statistical techniques (e.g., Fisher’s Exact test) or change the way categories are defined to ensure that the Chi-square assumptions are met, thereby strengthening validity of results. Finally, while whistle-blower reports were a moderating indicator of fraud prevention for this study, it will be interesting for future studies to explore more complex dimensions of mediation and moderation, including psychological, cultural and ethical climate variables, and to apply more sophisticated analytical techniques, such as structural equation modeling (SEM) or multilevel modeling, to elucidate how the concepts of governance awareness and control structures interact with the ethical behaviors of individuals to create greater organizational integrity and accountability.

8. Conclusions

Corporate governance awareness, forensic accounting practices and fraud mitigation strategies were the topics studied to see how they interrelated in the IT/ITES industry. The study’s results were determined through a combination of Chi-square and Binary Logistic regression analyses. It was concluded that corporate governance policy awareness, having forensic accountants as part of their internal control systems, and empowering top management with fraud awareness training are significant predictors of whistle-blower reporting behavior, which is an important indicator of fraud mitigation (Ramaswamy, 2005). Although fraud awareness training on forensic red flags showed only a small statistical correlation, it did show a positive tendency and should therefore be continued through sustained employee awareness programs.

In India, the findings support the increasing need to strengthen corporate governance by incorporating forensic accounting and fraud awareness training within the framework of internal governance. For example, the Companies Act of 2013, SEBI listing regulations of 2015, and the Kotak committee report of 2018 reflect the principles of agency theory put forth by Jensen and Meckling (1976) on mitigating information asymmetry between management and shareholders through moving towards greater transparency, more independent auditors, and improved oversight from the board of directors. Through the lens of stakeholder theory (Freeman, 1984), these findings also illustrate how India’s governance model is continuing to change from focusing primarily on the interests of the shareholder to considering all stakeholders in the organization as a whole through the implementation of whistle-blower systems and vigil policies.

The inclusion of forensic accounting services (FAS) in a practical and effective fraud prevention framework is essential in preventing and deterring fraud and offering protection against loss of assets. A forensic accountant’s skills are applied reactively in the detection of fraud and proactively in the implementation of controls that can deter unethical behavior before it occurs. A forensic accountant’s added analytical and ethical insight benefits an organization and assists in developing greater pain tolerance for corruption while protecting its assets.

In addition, fraud awareness training of members of the board of directors and key management personnel (KMP) is an important step toward cultivating a climate of vigilance and preparedness. By providing training on potential fraud flags, KMP are made more aware of the vulnerabilities within an organization and how to assess fraud risk more effectively, thereby improving the ethical climate of the organization. Although the data from this study indicates that there was no statistically significant impact of fraud red-flag training on the willingness of accountants to whistle-blow, the value of this type of training to build ethical awareness and prepare for identifying irregularities cannot be overlooked. Fraud awareness training should be viewed as a complementary part of an overall anti-fraud strategy.

The findings of this research expand upon the concepts of agency theory, stakeholder theory, and the theory of the fraud triangle (Cressey, 1953) by demonstrating how implementing employee-level interventions such as fraud awareness programs and ethical sensitization are critical to strengthening internal control mechanisms in an organization. Through the integration of these disciplines, the research has added to the existing body of theory surrounding the creation of an ethical culture, the resilience to fraud and the advancement of corporate governance.

In summary, the main components of the suggested fraud prevention model depicted in Figure 10 are three interrelated elements: an increased awareness by accountants of fraud prevention methods related to corporate governance policies; the use of forensic accounting services as a method of internal control; and the provision of ongoing fraud awareness training to the board of directors and senior management.

Together, these dimensions establish a robust, multi-layered defense against corporate fraud and advance the discourse on preventive governance and forensic accounting in emerging economies such as India.