When experience shapes control: The moderating role of employee tenure in COSO-Based fraud prevention

This research investigates the efficacy of the COSO-based internal control model for detecting and preventing fraud in banks working in Palestine and explores whether the relationship depends on employee tenure. The paper gathers survey data from 206 employees belonging to 11 commercial banks working in Palestine. The study utilizes Generalized Linear Models (GLM) and Generalized Structural Equation Modeling (GSEM). The five COSO components (control environment, risk assessment, oversight activities, information and communication, and monitoring) are considered as antecedents of fraud prevention and detection, with employee tenure (<5 years, 5–10 years, >10 years) used as a moderating variable. The five COSO internal control dimensions have a positive influence on fraud prevention and detection, with oversight activities clearly being the most significant. However, the moderation analysis shows that the power of COSO controls weakens with an organization’s employee tenure. Formal control mechanisms have greater impact and marginal effectiveness for less experienced employees relative to longer-tenured staff. This study is one of the more recent empirical, multi-model analyses about COSO performance in the banking industry in Palestine and introduces the effect of employee tenure as a conditioning variable in the internal control–fraud relationship.