Financial Corruption and the Role of E-Government

Corruption distorts the legitimacy and public trust in government institutions, which weakens the rule of law, impairs public financing, discourages domestic and foreign trade, slows down economic progress, and raises poverty. The aim of the study is to investigate the impact of transparency, accountability, and audit institutions on financial corruption in the public sector of Balochistan, and, most importantly, e-government is integrated as a moderating variable. In Balochistan, the public sector is active and contributes to almost every sphere of social life. However, this sector is facing huge challenges of corruption in various departments, which could threaten its sustainability and socio-economic development. In such situations, the public sector needs to implement appropriate strategies such as transparency and accountability to enhance organizational efficiency and effectiveness, which help fight against corruption. Audit quality also becomes central to curbing financial corruption in the public sector. These institutions create an atmosphere of transparency and accountability that essentially contributes to detecting and significantly preventing financial corruption. Applying principal-agent theory helps to better understand the relationship between government (as agent) and citizens (as principals). This study applies a quantitative research approach to collect data from respondents. The data were collected from respondents working in the public sector as finance and accounting managers through a survey questionnaire. The results suggest that accountability and audit quality significantly affect financial corruption. In addition, the findings substantiate that audit quality is the strongest determinant in fighting corruption. Furthermore, e-government moderates the relationship between audit quality and financial corruption.