<![CDATA[This study aims to examine the effect of internal control and digital literacy on digital fraud prevention in Small and Medium Enterprises (SMEs). Digitalization requires SMEs to utilize digital technology in operational activities, marketing, transaction recording, digital payments, and financial data management. However, the use of digital technology also increases the risk of digital fraud, such as electronic transaction manipulation, misuse of system access, falsification of payment evidence, and theft of business data. Internal control is an important factor in establishing adequate supervision, authorization, segregation of duties, documentation, and monitoring systems to ensure that business activities are carried out accountably. In addition, digital literacy is also required so that SME actors are able to understand, use, evaluate, and secure digital technology appropriately in business activities. This study employs a quantitative approach using a survey method involving 56 respondents who are SME managers. The research data were analyzed using multiple linear regression or Structural Equation Modeling–Partial Least Squares (SEM-PLS) to test the effect of each independent variable on digital fraud prevention. The findings reveal that internal control and digital literacy each have a positive effect on digital fraud prevention. This study also confirms that the better the implementation of internal control and the higher the level of digital literacy, the stronger the resilience of SMEs in preventing potential digital fraud.]]>
