<![CDATA[Fraud risk remains a significant governance concern for Indonesian rural banks, whose compact structures, limited segregation of duties, and close interpersonal relationships can weaken conventional safeguards. This study examines whether organizational ethical culture and internal control improve fraud prevention and whether audit quality strengthens those relationships. A causal, cross-sectional survey was conducted among 85 employees from 22 participating rural banks in Denpasar, Bali, during March-April 2026. Respondents were selected purposively because they held managerial, finance, accounting, human-resource, operational, or internal-audit roles and had relevant exposure to external audit. The data were analyzed using partial least squares structural equation modeling. Organizational ethical culture (β = 0.310, p < 0.01) and internal control (β = 0.391, p < 0.01) positively affected fraud prevention. Audit quality also had a positive direct effect (beta = 0.242, p = 0.017). However, audit quality did not moderate the effect of ethical culture (β = -0.082, p > 0.05) or internal control (β = 0.055, p > 0.05). The model explained 81.5% of the variance in fraud prevention The absence of moderation reflects the nature of external audit itself. External audit provides assurance that financial statements comply with applicable accounting standards and are free from material misstatement. Because it is annual, retrospective, and evidence-based, audit quality contributes to fraud prevention directly—by raising detection risk and prompting correction—but is not embedded in daily operations and therefore does not strengthen how ethical culture and internal control work. Ethical culture and internal control, by contrast, are embedded in day-to-day banking activities and thus operate continuously as effective prevention mechanisms. Audit quality therefore serves as an additive, independent layer of assurance rather than a contingent amplifier.]]>
