Sepala, P. H. N. H.Herath, H. M. M. N.Munasinghe, M. A. T. K.2025-09-222022Sepala, P. H. N. H., Herath, H. M. M. N., & Munasinghe, M. A. T. K. (2022). Effect of Internal Audit on Fraud Management in the Financial Service Sector in Sri Lanka. International Journal of Accountancy, 2(2), 88-104.http://repository.kln.ac.lk/handle/123456789/30012This study aims to study the relationship between internal audits and fraud management. Accordingly, this study, examines the internal audit organizational status, internal audit capabilities, and the contribution of internal audit activities to the fraud management of financial services companies in the Sri Lankan context. The target population for this study was defined as the 80 currently traded financial service sectors firms in Sri Lanka and data collected from systemically important banks namely, Bank of Ceylon, Commercial Bank of Ceylon, Hatton National Bank, People's Bank, Sampath Bank, Seylan Bank and they hold 78 percent of the banking assets and get total of 235 responses were collected from a questionnaire survey. In terms of findings, the results show that internal audit competence, is important predictors of fraud management. Also highlighted is that each financial service sector's concern about internal audit and forensic accounting is a value-added function of an organization and gives more attention to that area in the modern era. Researchers hope that their findings will add to the existing body of work and help close a knowledge gap in regards to emerging countries. The results are important for internal audit managers, internal audit policymakers to empower internal audit function in their organization.Financial ServiceFraud ManagementInternal AuditInternal Audit CompetenceOrganizational StatusArticle