Corporate Governance Failures in State‑Owned Enterprises: Evidence from the Aviation Sector

Abstract

Governance weaknesses persist in Country X's state-owned aviation enterprise despite the existence of strong statutory frameworks. This study aims to examine why these failures continue and how forensic accounting mechanisms can strengthen accountability. A qualitative case study approach was used, drawing on interviews with policymakers, auditors, and internal control personnel, triangulated with supreme audit reports and governance statutes. The findings indicate three persistence issues: selective enforcement of PFM-X and PEG-X statutes, centralized but weak oversight, and uneven internal controls—strong in payment authorization but weak in procurement, asset management, and record keeping. Political interference and limited digital traceability further widen the gap between law and practice. The study concludes that embedding forensic tools such as digital audit trails, trigger-based reviews, and continuous auditing can shift compliance from procedural formality to substantive enforcement, improving transparency and governance outcomes in SOEs.