Abstract

Objectives: This study examines the impact of internal control systems on fraud prevention in Saudi Arabia's banking sector, with particular emphasis on the five COSO internal control components and the mediating role of cybersecurity integration. Methods: The study adopted a quantitative explanatory research design. Data were collected through a structured questionnaire distributed to employees working in risk management, compliance, internal auditing, and IT security functions in Saudi commercial banks. A total of 312 valid responses were analyzed using SPSS 28.0 and SmartPLS Descriptive statistics, correlation analysis, multiple regression analysis, and structural equation modeling (SEM) were employed to test the proposed hypotheses. Results: The findings reveal that all internal control components have statistically significant positive effects on fraud prevention within Saudi banks. Risk assessment, control activities, and monitoring activities demonstrate the strongest predictive effects in minimizing fraudulent activities. The results also show a partial mediating effect of cybersecurity integration, indicating that digital monitoring systems and cybersecurity practices enhance the effectiveness of traditional internal control mechanisms in reducing fraud risk. Conclusions: The study concludes that effective internal control systems play a critical role in strengthening fraud prevention practices in the Saudi banking sector. The findings offer practical implications for bank management, internal auditors, compliance officers, and regulatory authorities, including the Saudi Central Bank (SAMA), by supporting improved governance practices, stronger internal controls, and reduced fraud risks within Saudi banks.