The impact of internal controls and corporate governance on forensic accounting effectiveness in Saudi Arabian oil and gas companies: a quantitative analysis using panel data regression

الملخص

This study investigates the determinants of forensic accounting effectiveness in Saudi Arabian oil and gas companies, examining the impact of internal control systems, corporate governance mechanisms, and organizational characteristics on fraud detection and prevention capabilities. Using panel data from seven publicly listed oil and gas companies on Tadawul (Saudi Stock Exchange) covering the period 2018-2023 (42 firm-year observations), this research employs multiple regression analysis, fixed effects models, and comprehensive robustness checks to establish causal relationships.

The dependent variable, forensic accounting effectiveness, is measured through a composite index incorporating fraud detection rates, audit quality scores, internal control assessment ratings, and regulatory compliance metrics. Independent variables include internal control quality, board independence, audit committee effectiveness, CEO duality, company size, and profitability. The empirical results from ordinary least squares (OLS) regression reveal that internal control quality (β = 0.427, t = 4.83, p < 0.01), board independence (β = 0.318, t = 3.92, p < 0.01), and audit committee effectiveness (β = 0.294, t = 2.76, p < 0.05) significantly and positively influence forensic accounting effectiveness.

The model explains approximately 78.6% of the variance in forensic accounting effectiveness (R² = 0.786, Adjusted R² = 0.762, F-statistic = 32.47, p < 0.001), demonstrating strong explanatory power. Fixed effects regression controlling for company-specific heterogeneity confirms these relationships (R² = 0.813, F = 28.92, p < 0.001). Diagnostic tests confirm model validity: the Durbin-Watson statistic (2.087) indicates no significant autocorrelation, variance inflation factors (VIF < 3.5) show acceptable multicollinearity levels, and the Breusch-Pagan test validates homoscedasticity assumptions (χ² = 12.43, p = 0.257).

The study contributes theoretically by integrating agency theory, institutional theory, and the fraud triangle framework to explain forensic accounting effectiveness in emerging markets. Practical implications suggest that Saudi oil and gas companies should prioritize strengthening internal controls (effect size: 0.427), enhancing board independence (effect size: 0.318), and establishing specialized forensic accounting units to improve fraud prevention capabilities. Policy recommendations include mandatory forensic accounting certifications for internal auditors and strengthened regulatory oversight by the Capital Market Authority.