The Effect Of Forensic Auditing On Public Sector Fraud Prevention

Public sector organizations manage resources on behalf of citizens, which makes the integrity of government financial reporting a matter of public trust rather than a purely technical concern. This study examines the effect of forensic auditing on fraud prevention in the public sector, arguing that fraud in government settings is best understood as a governance failure that technical audit tools alone cannot fully resolve. Research Design and Methodology: The study adopts a qualitative, desk-based research design built on a systematic review of peer-reviewed literature, government audit reports, and professional fraud-examination guidance published mainly between 2015 and 2026. The review is anchored in Fraud Triangle Theory, Fraud Diamond Theory, and Agency Theory, which together provide a lens for understanding why fraud occurs in public institutions and why forensic auditing is positioned to interrupt it. Findings: The evidence shows that forensic auditing contributes to fraud prevention less through detection after the fact and more through its deterrent and structural effects: it signals a credible probability of detection, strengthens internal control design, and produces litigation-ready evidence that supports prosecution and asset recovery. Its effectiveness, however, is consistently constrained by weak legal backing for forensic findings, shortages of trained forensic examiners, limited independence of audit institutions, and political interference in the release or use of audit findings. Decisions: The study concludes that forensic auditing functions best as one component of a wider fraud-control architecture rather than as a stand-alone solution. Its preventive value depends on how well it is embedded in corporate governance, whistleblowing systems, procurement controls, and the legal and institutional independence of the bodies that conduct or receive forensic findings. Implications: For public financial management, the findings suggest that governments should institutionalize forensic auditing units within supreme audit institutions, invest in continuous forensic training for auditors and accountants, strengthen whistleblower protection, and ensure that forensic audit reports carry enforceable legal consequences. Doing so would shift forensic auditing from a reactive investigative tool toward a genuine preventive control.