The Impact of Internal Control on Fraud Prevention and Detection in Commercial Banks Operating in Palestine رسالة ماجستير

Abstract

This study aimed to investigate the impact of the internal control system on fraud prevention and detection in commercial banks operating in Palestine from the perspective of their employees. The study relied on a descriptive analytical approach, whereby primary data was collected using a questionnaire prepared for this purpose. Sample responses were analyzed using SPSS. The study population included all employees in commercial banks in Palestine, totaling approximately (5,655) male and female employees distributed across (11) commercial banks. The sample size was (250) male and female employees, selected using a simple random sample method. (206) valid questionnaires were returned for analysis, representing an appropriate response rate. The results showed that the internal control system in commercial banks enjoys a high level of effectiveness in preventing and detecting fraud. Control activities ranked first in terms of effectiveness, followed by the control environment, then information and communications. Fraud prevention and detection aspects ranked fourth, followed by risk assessment, and follow-up ranked last with a relatively lower average. The results also showed a statistically significant relationship between the effectiveness of the internal control system in its various dimensions (control environment, risk assessment, control activities, information and communications, and monitoring) and its ability to prevent and detect fraud. These results underscore the importance of enhancing the effectiveness of internal control in all its aspects, which contributes to strengthening efforts aimed at combating banking fraud and achieving a safer and more reliable financial environment. The results also showed a significant impact of the dimensions of internal control on reducing and detecting fraud, indicating that improving these dimensions positively reflects on banks' ability to confront fraudulent practices. Based on these results, the researcher recommends several recommendations, including: 1. Banks should adopt the latest technologies, provide continuous training to employees, and periodically update policies and procedures to effectively address the changing and increasing threats in the banking environment. 2. Enhancing the control environment is advised to ensure effective governance, and improving information and communication channels to facilitate timely decision-making and fraud detection. 3. Banks should prioritize the implementation of operations and procedures to ensure reliable execution of management directives