Author(s): Husni Al-Shattarat, Basiem Al-Shattarat
This study investigates the regulatory environment’s effect in preventing and detecting financial fraud, as applied to commercial banks listed on the Amman Stock Exchange. Questions were designed to test this study’s dependent and independent variables from the perspective of internal audit departments and financial departments. The results indicate that there is a positive effect on the elements of the independent variables, such as integrity and ethical values, commitment to efficiency led philosophy, processes for managing and developing, organisational structure and board members, and audit committees effectiveness, all of which relate to the prevention and detection of financial fraud. However, the fourth element, which is to determine the delegation of authority and responsibilities, had an unfavourable effect on the variable to prevent fraud occurrence and detection. Thus, this study recommends focusing on the fourth element by adopting the segregation of duties to control Jordan’s financial fraud.