The Influence of Internal Control System on Fraud Prevention with Organizational Culture as a Moderating Variable

This study aims to examine how strongly Organizational Culture influences the Internal Control System (ICS) in fraud prevention in manufacturing companies in Gresik. A quantitative approach was used with primary data collected through questionnaires distributed to employees involved in financial and operational governance, resulting in 275 valid respondents. The data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) with SmartPLS 4. The results show that ICS has a positive and significant effect on fraud prevention (β = 0.463; p < 0.001), Organizational Culture has a positive and significant effect on fraud prevention (β = 0.311; p < 0.001), and Organizational Culture strengthens the effect of ICS on fraud prevention (β = 0.405; p < 0.001), thus acting as a quasi-moderator. The model explains 36.8% of the variance in fraud prevention (R² = 0.368) with moderate predictive relevance (Q² = 0.195). The discussion indicates that ICS works more effectively when supported by a culture of integrity, so fraud prevention cannot rely on formal procedures alone. The novelty lies in positioning Organizational Culture as a determinant of how strong ICS is, rather than merely an independent variable, and in the setting of manufacturing companies in Gresik.