Study of the effect of internal control weaknesses on fraudulent financial reporting risk with considering the moderating role of CEO characteristics

Internal controls play a vital role in prevention of fraud. Internal controls reduce the opportunities for committing fraud. According to information symmetry theory, internal control disclosure the solution is to examine the role of management accountability. To investigate the subject, based on the probit regression model the data related to the variables is analyzed the period from 2013 to 2019. The results showed that there is a significant relationship between the internal controls weakness in financial reporting and the detection of fraud in future. It was also found that the continuity of internal control weakness has a significant positive impact on the relationship between internal control weakness in financial reporting and fraud detection in the future. Finally, there was no empirical evidence on the effect of management characteristics on the relationship between internal control weakness in financial reporting and future fraud detection.