Impact of Forensic Accounting and Corporate Governance on Internal Controls Effectiveness: Moderating Role of Auditor Characteristics

This study investigates the factors enhancing the effectiveness of internal control systems within organizations, recognized as essential mechanisms for risk management and achieving organizational goals. It specifically examines two critical determinants: forensic accounting, which targets the investigation of financial misconduct, and corporate governance, the framework governing organizational oversight, in strengthening internal control effectiveness. This research adopts a descriptive-correlational design, utilizing structural equation modeling (SEM). The study population consists of all internal and external auditors in Iran, with a sample of 200 participants selected via convenience sampling. Data were collected using a tailored questionnaire derived from existing literature, and the conceptual model was evaluated through partial least squares structural equation modeling (PLS-SEM) implemented in SmartPLS software. Findings reveal that both forensic accounting and corporate governance exert a positive influence on internal control quality, with forensic accounting demonstrating a more substantial impact. Additionally, auditor characteristics—such as experience and expertise—significantly moderate the relationship between forensic accounting and internal control effectiveness, though this moderating effect does not extend to corporate governance. These results underscore the need to prioritize forensic accounting alongside robust corporate governance to enhance internal control systems.