Main Article Content
Abstract
Fraudulent practices challenge the banking industry, especially in emerging markets. This study examines the determinants of fraud disclosure by analyzing managerial ownership, internal audit, financial distress, and whistleblowing systems in Indonesian banks (IDX) from 2019 to 2023. Using 155 firm-year observations from 31 banks, we applied the Fixed Effect Model (FEM). Results reveal that managerial ownership, internal audit, and financial distress do not significantly affect fraud disclosure. Conversely, the whistleblowing system shows a significant negative association, indicating its preventive function in reducing fraud incidence and lowering disclosure frequency. Findings prove that whistleblowing system is a vital governance tool for mitigating information asymmetry. The study contributes to agency theory by emphasizing preventive governance mechanisms for transparency and accountability in emerging economies.