This research aimed at examining the effectiveness of forensic auditing in investigating detectingrnand preventing fraud in the public enterprise of Ethiopia. Survey method was the principalrnstrategy adhered to in this research. Purposive sampling technique was employed to selectrnsamples from the total population of employees working on the Fraud auditing and investigativernfunctions. Primary and secondary data was collected through survey questionnaires and reviewrnof related materials. Descriptive statistics, Simple Linear Regression, Pearsonâ€™s ProductrnMoment Correlation, F-test and t-test are the main tools that were used to test, analyze andrninterpret the data and hypothesis. Statistical Product and Services Solution (SPSS), formerlyrnknown as statistical package for social science was the main instrument utilized. The reliabilityrnand validity tests are conducted before the hypothesis test. Result of the research showed thatrnthere is a significant relationship between the investigation, detection and prevention of fraudrnand effectiveness of forensic auditing in the public entities of Ethiopia. It can be concluded fromrnthe result of this study that investigation detection and prevention of fraud is significantlyrnaffected by effectiveness of forensic auditing. There is also significant and positive relationshiprnbetween the two variables. Therefore, the government and executives as well as the public atrnlarge need to do their at most effort to secure the effectiveness of forensic auditing.