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Strengthening Corporate Fraud Detection through Forensic Accounting and Whistleblowing: The Moderating Role of Regulatory Enforcement

Author

Listed:
  • Syahiza Arsad

    (Faculty of Accountancy, Universiti Teknologi MARA Cawangan Kedah, Kampus Sungai Petani, Merbok, Kedah, Malaysia)

  • Wan Nailah Abdullah

    (Faculty of Accountancy, Universiti Teknologi MARA Cawangan Kedah, Kampus Sungai Petani, Merbok, Kedah, Malaysia)

  • Norasmila Awang

    (Faculty of Accountancy, Universiti Teknologi MARA Cawangan Kedah, Kampus Sungai Petani, Merbok, Kedah, Malaysia)

  • Sahubar Ibrahim Ismail Gani

    (Seksyen Regulatori Penerbitan, Bahagian Penguatkuasaan dan Kawalan, Kementerian Dalam Negeri, Wilayah Persekutuan Putrajaya, Malaysia)

Abstract

Corporate fraud continues to erode stakeholder trust, distort financial markets, and inflict severe economic damage despite advancements in auditing and governance frameworks. While forensic accounting and whistleblowing are critical for proactive fraud detection, their effectiveness hinges on audit committee independence and regulatory enforcement strength. This conceptual paper aims to examine how forensic accounting practices and whistleblowing mechanisms, supported by audit committee independence, enhance corporate fraud detection effectiveness, and how this relationship is moderated by the strength of regulatory enforcement. Using a narrative review of Scopus-indexed literature (2010–2024), this study synthesizes insights on how regulatory enforcement moderates the fraud detection impact of forensic accounting and whistleblowing, enabled by audit committee independence. The study identified key themes and theoretical insights that highlight how forensic techniques, protected reporting channels, and independent oversight function as complementary fraud detection mechanisms whose efficacy is amplified under strong regulatory regimes. The findings suggest that while forensic accounting and whistleblowing are potent on their own, their impact on fraud detection is significantly strengthened when audit committees are independent and when regulatory bodies actively monitor, investigate, and penalize misconduct. The study contributes theoretically by integrating agency theory, institutional theory, and the fraud triangle to develop a framework explaining the conditional effectiveness of internal controls. Practically, it offers actionable insights for regulators, corporate boards, and compliance officers to design synergistic fraud detection systems aligned with external enforcement realities. Limitations include reliance on conceptual synthesis without empirical testing, prompting the need for future cross-national and longitudinal studies to validate the proposed model.

Suggested Citation

  • Syahiza Arsad & Wan Nailah Abdullah & Norasmila Awang & Sahubar Ibrahim Ismail Gani, 2025. "Strengthening Corporate Fraud Detection through Forensic Accounting and Whistleblowing: The Moderating Role of Regulatory Enforcement," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(9), pages 6843-6853, September.
    • Handle: RePEc:bcp:journl:v:9:y:2025:issue-9:p:6843-6853
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    References listed on IDEAS

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