Exploring the mediating effect of Sharia audit quality in the relationship between internal audit characteristics and fraud prevention

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Abstract

Fraud remains a critical concern in both for-profit and non-profit organizations, including zakat institutions that rely heavily on public trust and religious accountability. Most previous studies have examined internal audit competence or due professional care separately, but few have explored their combined influence, particularly when mediated by Sharia audit quality. This study examines the mediating role of Sharia audit quality in the relationship between internal audit characteristics, namely internal audit competence and due professional care, and fraud prevention within Indonesia’s National Zakat Board (Badan Amil Zakat Nasional, BAZNAS). We analysed survey data from 262 respondents across 131 BAZNAS units using partial least squares structural equation modelling (PLS-SEM). The findings show that both competence and due professional care significantly enhance fraud prevention, directly and indirectly, through Sharia audit quality, with due professional care emerging as the stronger determinant of audit quality. This paper advances previous research by demonstrating how Sharia audit quality mediates the relationship between internal audit characteristics and fraud prevention within zakat institutions. The study contributes to Islamic auditing literature by identifying Sharia audit quality as a key mechanism in strengthening anti-fraud efforts. Practically, the findings provide strategic implications for regulators and zakat institutions to enhance accountability, transparency, and public trust.

Keywords: Competence, Due Professional Care, Internal Audit Characteristic, Fraud Prevention, Sharia Audit Quality

Authors’ individual contribution: Conceptualization — W.Y.; Methodology — C.S.; Software — R.S.; Validation — W.Y.; Writing — Original Draft — L.Y.; Writing — Review & Editing — C.S.; Supervision — R.S.; Project Administration — L.Y.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: M42, L31, Z12

Received: 29.09.2025
Revised: 01.11.2025; 15.11.2025; 08.12.2025
Accepted: 16.12.2025
Published online: 19.12.2025

How to cite this paper: Yulianti, L., Yadiati, W., Sukmadilaga, C., & Soemantri, R. (2025). Exploring the mediating effect of Sharia audit quality in the relationship between internal audit characteristics and fraud prevention. Corporate Law & Governance Review, 7(4), 78–89. https://doi.org/10.22495/clgrv7i4p8