The purpose of this thesis is to develop an understanding about internal fraud and corruption problem in Turkish construction industry. During the research, the reasons behind the internal fraud and corruption problem, types of internal fraud and prevention methods for internal fraud and corruption were investigated and various recommendations were developed. Moreover, fraud risk awareness questionnaire was implemented to understand the likelihood occurrence of internal fraud types in construction sector and proactive and reactive measures against these problems. Moreover, types of fraud incidences experienced by Turkish construction companies were also investigated with the questionnaire. The questionnaire reached to 89 respondents and, recommendations to prevent internal fraud and corruption problem were developed by detailed statistical analyses.